Tax Penalties, Inspection Documentation, and Administrative Review

Tax Compliance and Enforcement Procedures

1. Tax Violations and Penalties

Tax infringements are acts or omissions that are classified and penalized as such in the law.

1.1 Types of Offenses

1. Mild Offenses:
   • When the base of the penalty does not exceed $3,000, whether or not concealment exists.
   • When the base of the penalty exceeds $3,000 and there is no concealment.

   Punishment: Proportional monetary fine of 50%.

2. Serious Offenses:
   • When the base of the penalty exceeds $3,000 and concealment exists.
   • Whatever the base amount of the penalty, when false or falsified invoices or documents have been used.

   Punishment: Proportional monetary fine of 50% to 100% of the amount lacking payment.

3. Very Serious Offenses:
   • When fraudulent means have been used.

   Punishment: Proportional monetary fine from 100% to 150%.

2. Documentation of Tax Inspections

The inspection process utilizes specific documents to record actions and findings:

• Communications: These are the documents through which the Administration notifies the taxpayer.
• Reports: Tax inspection reports shall be issued, ex officio or at the request of others, which is necessary for the application of taxes.
• Proceedings: These are the documents that serve to record facts. Proceedings may not contain proposals for tax assessments.
• Minutes: Document where the inspection results are recorded, summarizing the action taken and proposing the stabilization or correction of the required fiscal situation.

3. Administrative Review Procedures

3.1 Special Procedures for Review

These procedures address the review of administrative acts outside the standard appeal process.

Declaration of Nullity and Voidness

The Minister of Finance is responsible for the declaration of nullity and voidness in the following cases:

• Which adversely affects the rights and freedoms subject to constitutional protection.
• Have an impossible content.
• Made or given irrespective of the legal proceedings.

Note: Acts declared invalid and void are immediately ineffective.

Declaration of Harmfulness of Acts

The power to declare an act harmful (detrimental to the public interest, allowing revocation) rests with the Minister of Finance. The deadline for adopting the declaration of harmfulness is four years from the notification of the measure sought to be declared damaging.

Correction of Errors

The agency that issued the act or the resolution of the claim can correct material or factual errors.

3.2 The Administrative Appeal

The organ that dictated the act has the option to reconsider the decision upon appeal.