The Constitutional Court and State Council are constantly stating that if a sanctioning tax law is passed that benefits the taxpayer, it will be possible to apply this law. In the case of a sanctioning law that offers a tax benefit, the Tax Reform presented a change to the sanction for inaccuracy established in article 647 of the tax code. This set a more favorable fine for the taxpayer without implying a lack of awareness of the non-retroactivity principle regarding taxes nor violating article 338 of the Constitution.
Previous legislation set forth a sanction for inaccuracy equivalent to 160% of the difference between the amount owed and the amount in favor. This is judged on a case by case basis and determined in the official settlement and declared by the taxpayer or responsible party. In Law 1819 from 2016, this article was modified setting the sanction for inaccuracy at 100% of the difference between the amount owed and the amount in favor. This is still judged on a case by case basis and determined in the official settlement and declared by the taxpayer, retained agent or responsible party. As a result, the new sanction set forth by the legislature is much better for the taxpayer, since the percentage of the sanction decreased dramatically.
In recent jurisprudence from the State Council, the regulation of the sanction for inaccuracy modified by Law 1819 from 2016 has been interpreted through the lens of the principle of tax benefit. This is understood to mean that by being a law that is more beneficial to the sanctioned taxpayer, it should be enforced without taking into consideration whether it was passed after the events or acts that are being sanctioned. The aforementioned interpretation is justified in article 640 of the tax code. The relevance of the law of favorability is acknowledged in the rules for sanctioned taxes.
So, it is not arbitrary that the sanction for inaccuracy be reduced because it is beneficial to the taxpayer. Whereas this relates to an authorization that should always be applied according to the principles and constitutional guarantees of equity and justice.
In addition, in order to enforce the law about sanctions that is beneficial to the taxpayer, we need to face the phenomenon of looking back at the law and not the non-retrospective nature of said law. The beneficial fiscal treatment would only come from legal situations not already established.
There is no violation of the non-retrospective principle in tax matters and other principles that govern this issue. On the contrary, this would value taxpayer rights that come up considering the confidence in the tax administration.
Finally, this abides by tax law, seeking to achieve social justice and a healthy balance between the public administration and the citizens. This occurs by means of penalizing tax legislation here in Colombia cemented over the base of the principle of tax favorability.
Author: Juliana Merchán