Termination of discussions with Dian and Ugpp

As expected, Law 1943 of 2018 "Whereby financing rules are issued for the reestablishment of the balance of the general budget and other provisions are enacted" (Financing Law), included in its articles some mechanisms that allow taxpayers to conciliate or terminate by mutual agreement, The taxpayers may obtain discounts on the payment of interest and penalties, either at the administrative or judicial stage, by settling disputes settled with the National Tax and Customs Directorate (Dian) in tax, customs and exchange matters, and with the Pension and Parafiscal Management Unit (Ugpp) in matters within its competence.

Thus, taxpayers, withholding agents, persons responsible for national taxes, customs and exchange regime users whose discussions with the Dian are in judicial venue, may, in accordance with the provisions of Article 100 of Law 1943 of 2018, terminate the processes by conciliation in the following terms:

In addition to the above, the following requirements must be complied with:

1. that the lawsuit has been filed before the entry into force of the Financing Law, that is, before December 28, 2018.

2. That the claim has been admitted before the filing of the conciliation request before the Dian.

3. That there is no final judicial sentence or decision that puts an end to the respective judicial process.

4. Attach proof of payment of the obligations subject to conciliation in accordance with what has been previously established in the chart.

5. Provide proof of payment of the private liquidation of the tax subject to conciliation corresponding to the taxable year 2018, if applicable.

6. That the conciliation request be filed before the Dian until September 30, 2019.

7. The term to sign the conciliation act shall be until October 31, 2019.

8.The minutes must be submitted to the judge for approval within 10 working days of its execution. The judgment or order approving the conciliation shall be enforceable and shall become res judicata.

On the other hand, if the discussion initiated with the Dian is in an administrative venue, Article 101 of Law 1943 of 2018 provides that the procedure may be terminated by mutual agreement, submitting the request until October 31, 2019, in the following terms:

It should be noted that the filing of the request for termination by mutual agreement per se does not suspend the administrative proceedings whose termination is sought. Notwithstanding the foregoing, the execution of the act approving the termination by mutual agreement will leave without effect the acts that have been issued after the act being transacted and will lend executive merit in accordance with the provisions of articles 828 and 829 of the Tax Statute.

It is emphasized that the termination by mutual agreement may be requested in the event that at the date of publication of the Financing Law or after it, a claim for nullity and reestablishment of the right against the official assessment, the resolution imposing a penalty or the resolution deciding the reconsideration appeal against such acts has been filed or is filed, provided that such claim has not been admitted. The interested party must accredit the requirements referred to in the above table, until October 31, 2019, and, in addition, must file a request for withdrawal of the claim before the competent judge.

It is important to highlight that the above-mentioned provisions contemplate that the contentious-administrative conciliation and the termination by mutual agreement of the administrative processes in the above terms, will be applied to the discussions with the Ugpp. In this sense, penalties and interests may be conciliated or settled, except for those interests caused in the determination of the contributions of the General Pension System, the payment of which must be accredited for the benefit to be granted. Such request shall be submitted to the Conciliation and Judicial Defense Committee of the entity.

Likewise, the territorial entities and the regional autonomous corporations are empowered to conciliate or terminate by mutual agreement the administrative contentious proceedings and the tax administrative proceedings under their jurisdiction. Naturally, the territorial entities must regulate the adoption of these rules so that taxpayers may avail themselves of such benefits in the corresponding discussions.

On this point, it is important to point out that in the past, the Honorable Constitutional Court has studied charges of unconstitutionality on rules similar to those analyzed in this document and has determined the constitutionality of the articles that provide for the termination by conciliation of contentious-administrative proceedings in tax matters, considering that such provisions do not violate the principles of tax equality and equity and that they do not constitute amnesties, but a mechanism for the optimization of the collection of taxes and duties subject to judicial controversy [1]. A different situation has occurred, for example, in what previous tax reforms (Law 1819 of 2016 and Law 1739 of 2014) called "special payment condition", by virtue of which, taxpayers who had been imposed penalties in tax matters, who were in arrears with their obligations prior to 2014 and 2012, could pay their main obligation and obtain benefits in the payment of interest and penalties. These cases were understood by the Court as amnesties in tax matters, constitutionally proscribed and directly violating tax equity [2], sufficient reasons to be declared as unconstitutional.

As a result of such experience, the Financing Law regulated the contentious-administrative conciliation, but did not incorporate special payment condition rules.

On the other hand, the Financing Law provides for the application of the principle of favorability by the Dian, in matters of penalties in the collection stage, and the reduction of penalties for late delivery of information to the Ugpp, which will be analyzed in a later column.

In view of the above, taxpayers, withholding agents, persons responsible for national or territorial taxes, customs users and users of the exchange regime and contributors, have within their reach a valuable tool that allows them to end their judicial proceedings and administrative discussions with the referred discounts and, the Dian, the territorial entities and the Ugpp in turn, have an effective collection mechanism that also results in the decongestion of the judicial offices and the officials of such entities.

[1] Constitutional Court. Presiding Judge: Gloria Stella Ortiz. Decision C-060 of 2018. Case D-11985. June 7, 2018.

[2] Ibidem and Constitutional Court. Magistrada Ponente: Myriam Ávila Roldán. Decision C-743 of 2015. Case D-10838.  December 2, 2015.