The new General Law of Alternative Dispute Resolution Mechanisms
(the Law) recently became effective, which will allow companies and
individuals to negotiate with tax and administrative authorities
through alternative dispute resolution (ADR) to resolve disputes
that arise between them, before, during, and even after the
processing of any lawsuit before the Federal Court of
Administrative Justice (the "Administrative
Court").
This opens the option to request ADR during administrative
proceedings before the tax and administrative authorities to
resolve their differences and avoid filing lawsuits with the
Administrative Court.
Likewise, the Law allows that once an administrative trial has been
initiated, both the individuals and the authorities may request ADR
before the Administrative Court in order to achieve a speedy
settlement and avoid a lengthy trial and even negotiate the
execution of the ruling.
To implement ADR, the Law orders the Administrative Court to create
the Public Centers of Alternative Dispute Resolution Mechanisms in
Administrative Justice to conduct ADR.
The subject matters that do not qualify to be resolved through ADR
are:
1. Agrarian;
2. Administrative liabilities;
3. Foreign trade;
4. Public programs;
5. Labor disputes in which the Government is the employer;
6. Administrative lawsuits initiated by the administrative and tax
authorities (juicios de lesividad); and
7. Those in which the public order and rights of third parties are
violated.
It is important to note that these ADRs may be initiated in
connection with administrative proceedings and trials that occur
after the Law is enacted and do not apply to proceedings or trials
initiated prior to the Law. Finally, for the proper application of
the Law, the Legislature will have to amend several laws
establishing the terms and conditions related to the use of
administrative and tax ADR.
In relation to this Law, there are open questions regarding the way
in which administrative and tax ADR will coexist with existing ADR
mechanisms, for example, the mediation the Tax Ombudsman (PRODECON)
can carry out or, those that are contemplated in the Double
Taxation Avoidance Treaties or, the way in which the stay order of
the Administrative Enforcement Procedures (i.e. seizures) would
operate during the processing of new ADR or the obligation to
provide, or not, guarantees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
