Conclusive Agreements. Effective Solution for Tax Audits

Conclusive Agreements. Effective Solution for Tax Audits

Author: Emilio García-Vargas ([email protected])

The Conclusive agreement procedure is an alternative method to approach disputes in Tax matters. Its purpose is to solve the differences between the tax authority and the taxpayers without using the traditional defense methods such as the Administrative appeal and the Nullity claim.

The Taxpayer Ombudsman (“PRODECON” per its Spanish acronym) is in charge of overseeing the Conclusive Agreement procedure, acting as a negotiator, which helps taxpayers challenge the assessments made by the tax authorities during the audits executed.

As the applicable provisions set forth, the conclusive agreement procedure must be requested before the tax credit against it is determined during the tax audit.

In view of the above, PRODECON stated that between 2014 and 2017 they received more than 7,300 requests, in which more than 50% were fully settled and nearly two out of three reached a total or partial agreement.

As you see, this procedure is an effective method for tax dispute settlements. Besides allowing the 100% fine elimination the first time it is requested, the costs of using further review methods once the tax credit is determined are eliminated (as it can be the guarantee of the tax credit,  and legal fees, among others).

Our tax area in Sánchez Devanny promotes this sort of procedure due to the positive results we have obtained in favor of our clients.

We have represented different companies in the Automotive, Energy Industry, Metal, Logistics, Services, and other industries. In most of the cases we obtained successful results and we managed to conclude these procedures in approximately one year without any amount paid or by formalizing their tax situation, paying considerably smaller amounts of money to those initially determined by the tax authorities. As an example, below please find the results obtained in several procedures filed:

APROXIMATE OBSERVED AMOUNT (SAT) (MXN) APPROXIMATE PAYMENT AFTER CONCLUSIVE AGREEMENT (MXN)
$420,000,000.00 $450,000.00
$800,000,000.00 $0
$1,000,000,000.00 $150.00
$300,000,000.00 $0
$35,000,000.00 $3,500,000.00

Bearing in mind the benefits that these procedures provide to taxpayers in Mexico, it is important for companies to consider this procedure as a mechanism to solve disputes that may arise with the tax authorities, with which Sánchez Devanny has a deal of experience.

Contact
José Angel Eseverri
[email protected]

Ricardo León
[email protected]

Guillermo Villaseñor
[email protected]

Abel Mejía
[email protected]

Mariana Eguiarte
[email protected]

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