TAX and PRIVATE MEDIATION. Alternative of “certain date” in private documents June 10, 2020
Currently, due to the substantial increase of the tax audits, desk audits, electronic tax audits, etc., that thousands of taxpayers are being subjected in Mexico through the Tax Administration Service, it is extremely important the Jurisprudence 2a./J. 161/2019 (10a.), issued by the Second Chamber of the Mexican Supreme Court of Justice published under the heading: PRIVATE DOCUMENTS MUST COMPLY WITH THE REQUIREMENT OF “CERTAIN DATE” IN CASE OF TAX AUDITS IN ORDER TO VERIFY THE TAX OBLIGATIONS FULFILLMENT BY THE TAXPAYER.
This Jurisprudence establishes that for tax purposes the “certain date” is an enforceable requirement of private documents that are submitted before the tax authorities as a result of the tax audits, desk audits, electronic tax audits, etc., so any private document will acquire a “certain date” when it is registered in the Public Property Registries (PPR), it is shown before a Notary Public or upon the death of any of the signatories; however, the tax legislation by itself does not expressly establish this requirement, otherwise it would grant full probative value to such document.
The Jurisprudence completely loses sight that for many years the civil and commercial legislation have contemplated the concept of “certain date” for those cases in which there is an incompatibility of rights between the Parties, with the purpose of proving who has a better right over the other. In addition, it is false that a private document has full probative value, like agreements and contracts, since the civil procedural legislation applicable for tax matters, establishes that when a private document is refuted, the veracity of its content must be demonstrated through other evidence
However, although the deficiencies of such legal precedent are evident, it is mandatory for all Courts in Mexico in accordance with article 217 of the Amparo Law.
This Jurisprudence warns options that are late, burdensome, and even sometimes obtuse, such as registrations in the PPR or notarization, so that a private document, i.e. an agreement or contract acquire “certain date” for tax purposes.
Despite the above, there are modern and timely alternatives that provide the characteristic of “certain date” to any agreement or contract that is intended to be concluded, such as the Agreements concluded before a Certified Private Mediator, who has “public faith” (publica fides) in terms of the provisions set forth by the Alternative Justice Law of the Superior Court of Justice of Mexico City.
Consequently, by entering into an Agreement before a Certified Private Mediator, in addition to provide it a “certain date” to the corresponding private document for tax purposes, it would reinforce essential aspects that the tax authorities invariably question in their audits, such as the materiality of the operations, regardless of several legal benefits that the Private Mediation figure provides in an operation, which does not happen with the registrations in the PPR or notarization.
If you have any questions regarding the foregoing, please do not hesitate to contact us.
Mexico City, June 10, 2020