Return of unpaid debts is appropriate

Despite the fact that the judges have been repeatedly expressing the contrary, the municipal tax administration continues to require its taxpayers to correct the Industry and Commerce Tax (the "ICA") return as a requirement for a refund of such tax, when their return and payment were due to an error, either as a result of the inclusion of income higher than the actual income or as a consequence of such income coming from an activity that does not fit in the tax generating event.

In sound legal logic, the scenario raised should give rise to the application of the institution provided for by Art. 313 of the Civil Code, according to which, "if the person who by mistake has made a payment, proves that he did not owe it, has the right to repeat what was paid (...)", and that there is translation to tax law, in article 850 of the National Tax Statute, whose content refers that "the [tax administration] shall timely return to the taxpayers, the excess payments or what is not due, that they have made for tax and customs obligations, whatever the concept of payment, (...)".

According to what we have referred, before the refund requests presented by the taxpayers based on the payment of what is not due, the administration has been demanding the correction of the tax return in which the tax paid was included as a condition to accede to the request.

Regarding such requirement, the Council of State, through a decision of February 25, 2016 with Dr. Jorge Octavio Ramírez as the reporting counselor, stated the following: "The Chamber considers that the tax regulations have established the figure of the payment of what is not due in favor of the taxpayers and for this it has indicated the rules of its proceeding, without providing as a prerequisite and indispensable requirement the correction of the private return (...)".

In the same sense, the Administrative Court of Antioquia pronounced in a decision of May 2, 2014, with Dr. Álvaro Cruz Riaño as judge rapporteur, stating that: "(...) In none of its texts it is established as a requirement to proceed with the refund for payment of what is not due, that necessarily and as a sine qua non requirement the correction of the return has been requested within the legal term, (...)".

Consequently, it is clear that the refund of the payment of what is not due and the correction of the private tax return are different legal institutions, which serve different functions, are subject to different expiration terms and, in no way, can the proceeding of the former be subordinated to the attempt of the latter, as the administration has been demanding.