Relevant Case Law

Chamber considers taxable income from the sale of vehicles

RES: 000146-F-S1-2008

First Division of the Supreme Court. San Jose at ten hours twenty minutes from the twenty-second day of February two thousand and eight

Process special tax to adopt the interpretation that capital gains generated by the forced sale of the fleet of rented cars are not taxable.

1. The appellant claims to break 81 of the canon law of the Constitutional Court because of a pending motion that the Board responds that the purpose of lite and the question of unconstitutionality alleged in the complaint are different and contradictory.

2. The appellant said that there was a breach of paragraph 155 of the Code of Civil Procedure because the judges failed to rule on the request of a point in the statement of claim, the Board’s view that “… for instance if the judges referred to what noted in that section of the application,
called “REPLACEMENT OF LEGAL MANDATE FOR BUSINESS IN THE LEASE OF VEHICLES”, where, in essence, alleges that the resources generated by the sales-ready by law-the fleet of rental vehicles used in its all are used to replace, so if the concept of “capital gains”, is interpreted in the way that makes the tax authorities, the conservation of the source
generating income in the business of leasing of vehicles for tourism, would be impossible or too burdensome, because it imposes a tax burden on a mechanism for replacement of assets which, by law, is required, limiting the capacity to generate income taxable in the future. Therefore, if intended by the tax is to tax the resources that the plaintiffs obtained from the sale of used vehicles, which are the resources needed to acquire the new fleet would be taxing, no new wealth, but resources needed to maintain a through the renewal of assets, the source of income. Ie, capital gains derived from the sale of vehicles with incentive tour, having to invest in the purchase of a new fleet to be regarded as a deductible expense. On this point, in consideration of the judgment IX, entitled “SYSTEM AND BENEFITS OF TAX INCENTIVES FOR PARTICIPANTS IN THE COMPANY OF ITS CONDITION TOURISM COMPANY DEDICATED TO THE RENTAL OF VEHICLES FOR TOURISM, where relevant, states:” … It is undisputed in the case that the company eventually signed a contract with the state tourism, which is precisely described, deductions and exemptions that were granted, and the conditions for their enjoyment, including the change of fleet every three years and cancellation of taxes based on their value to the transfer date as the record in the books, as appropriated in the third clause of the contract. In light of this, is that, for not doing so established the legal regulations governing the matter, nor for having agreed in the contract signed between the tourism stakeholders and the ICT is not possible to understand as part of tax incentives granted non-taxation of capital gains derived from sales of the vehicles involved in the tourist rental for tourism, because contrary to what was argued by the gestionante, in law (and regulations that are developing) and The contract expressly states that any transfer of assets to those persons (natural or legal) that are not subject to this system of incentives, should cancel all relevant taxes and surcharges, including, obviously, for the income tax, that repeats are not exceptions, whose amount is determined according to the percentage of depreciation having been specially set to a fixed term (three years) into law, the regulation specifies. It is nothing to this discussion if this charge is not empty or the contents of tax incentives and exemptions provided in the Law of Incentives for Tourism Development, number 6990, because it exceeds the jurisdiction of this Court, to reside in a must-be, who is more proper to be within the Legislature, as it involves an extension of the content of the law, so that it prevents the interpreter of the law (now Tax Court and judicial review) recognition, as they are not expressly provided for in law. “Also, paragraph X, entitled” the assumptions underlying income tax “as relevant, states:” … So, regardless of title arising from the disposal, which in this case, the distinction may be trying to do the gestionante as to whether it is in compliance with a statutory mandate or the free exercise of commercial activity, such as economICS and management of the company itself is subject to income tax the gain realized from the sale of assets subject to depreciation, as is disposed at a price above the value recorded in the books. It should be noted that the mechanism for depreciation of assets in order to deduce tributariopermite the taxpayer’s income tax cost of purchasing goods that are required to generate income, which, according to the rates determined by the regulations for each fiscal period suggests that cost. It should be emphasized that in the case of vehicles for hire are at a special rate of depreciation that it was determined by the legislature, specifically in Article 7 of Law No. 6990, which in all cases was set within a period of three years, regardless obsolecencia or a deterioration of each car in particular. In other cases, as noted by the plaintiff company, this percentage is set by the Administration, either through a course-regulation backed by the constitutional jurisprudence in ruling 4844-99 that number was itself subject to the Administration because it is a matter entirely technical reason why it does not violate the principle of legal reserve in the tax area, or with a particular authorization, that is what is known as an accelerated depreciation, given that it breaks the range of percentages established in the general regulations. Thus, the sale of such goods and the increase in the wealth it generates should be considered as part of business income, because of its ligamen of business because it is true that the change of the vehicle fleet is one direct consequence of the activity engaged these companies (car rental) in addition to these assets were purchased with an exemption of fifty per cent in fees and surcharges to their importation or local purchase, the sale of which originates in fulfilling the legal requirement for renewal every three years. Moreover, it is indisputable that these assets (vehicles) are producing tangible income, which is subject to the payment of income tax, according to the regulations governing this tax, in the absence of an exemption provided for in rule legal for this type of business (rental of vehicles for tourism). According to the above, it is clear that in all cases the proceeds received upon sale of vehicle rental to meet the legal obligation of the change in flotilla, will always be taken into account for the tax return on income, either for taxation or deduction, the first course when it is credited as a loss (as provided in paragraph g) of Article 8 of the Act in a comment), which occurs if the sale is made at a price below the value recorded in the books, and the second case, when it is accredited by the taxpayer at the time of filing the statement of income tax as investment cost, according to the rules of accounting, either to cover fifty percent of the taxes and rates of import or local purchase for the replacement of fleet vehicles, or any other input required by the company to generate income, as expected subparagraph a) of the same Article 8, of course it is obvious that you are residing in the operational management of the company. Is true that these enterprises have established a tax legally mandated exemption of fifty per cent on all taxes and charges on import or local purchase of vehicles for rental purposes of tourism and foreign nationals, responding to an incentive policy in the tourism sector in our country, why can not extend this benefit to try to give them a profit at the expense of the incentive because it would involve pervención of Figure exonerated. Finally, in light of the foregoing it is evident that in the event that motivates this process is unrelated to the discussion whether this increase in the wealth or utility is the product of a habitual or occasional, or if it is compliance with a statutory mandate or the free exercise of an act of trade or commerce, because it is not an element in the taxable under article first and third paragraph of paragraph f) of Article 8 of Law 7092. “(The emphasis supplied). Based on the above mentioned, is rigorously rejected this reproach addressed to the ruling. ”

TFA-510-P-2006-P. First Chamber. FISCAL ADMINISTRATIVE TRIBUNAL. San Jose, at nine hours thirty minutes from the sixteenth day of November two thousand and six .- ***************************** **********

Meet the Court of an appeal brought by Mrs SEÑORA XXX, identity card number, file No. 8647, against the decision No. DT-09-RV-0147-4, issued by the Tax Administration Southern Region, the fifteen hours of the twentieth of December two thousand and four .- *************************************** *************

RESULTS:

1) That the audit process undertaken by the taxpayer NEGOCITO THE LADY XXX SA ., Identified the following adjustments: Increase in income tax for the period of fiscal 1999 with respect to the statement of ¢ 47,044,169.00, and an appreciation of ¢ 370.794.97 as the balance in favor of the General Tax Sales for the months spanning October 1998 to September 1999. Because the company did not submit audited use of review and appeal against the decision determinative No. DT-09-0143-RV-4, issued at 09:00 am on December 22, 2004, and was reported in the address as noted by the legal representative for such purposes, the December 24, 2004, adjustments were quoted firm. However, because the company’s term of appointment, which was about 99 years from November 13, 1998, was shortened to five years, the legal life of society feneció on November 13, 2003, as agreement of the partners and directors of it. Also, according to court consultation and Small Claims Contravencional Perez Zeledon, he noted that the income is not recorded in any process of liquidation on behalf of Mrs XXX NEGOCITO SA, which caused the South Zone Revenue of as set out in Guideline No. 22-2003 of the Directorate General of Taxation, dated June 24, 2003, Articles 16 and 21, paragraph b) of the Code of Tax Procedures and Standards, and Article 210 Commercial Code, applicable to members and notify the secretary of the company as liable, the charges mentioned above and some ****** .-

2) 08 November 2004, the South Zone Revenue notified as liable to SEÑORA XXX, partner, legal representative and chairman of the tax obligations of Mrs XXX NEGOCITO SA ., Shipments of office No. 2752000003557 and 2752000003532, corresponding to adjustments in the income tax period in fiscal 1999 and the tax on sales for the months covering October 1998 to September 1999 respectively, which were challenged. (Folios 57 to 96) .- ************************************

3) That, by specific resolution DT-09-0147-RV-4, issued by the Tax Administration Southern Region, at 15:00 am on December 22, 2004, was declared invalid without the complaint alleged and filed in against the transfer of charges Nos. 2752000003557 and 2752000003532, determining by SEÑORA XXX, as the liability in relation to NEGOCITO LADY OF XXX SA . An increase of ¢ 47,044,169.00 (forty seven million forty-four thousand one hundred and sixty-nine cents without colons) in income tax for the period fiscal 1999 and a net decrease of ¢ 370,794.97 (three hundred seventy and ninety-four thousand seven hundred and ninety seven colons cents) for a general tax on sales for the months from October 1998 to September 1999. (Folios 109 and 110) .- ****************************************** **********

4) That the Revenue considered as the basis for its resolution, the following: Nulidad-motivation-by-first noted that management, not the claimant is right because in the first instance, the liability to the plaintiff mentioned, correspond to adjustments in income and taxes on sales of the fiscal 1999 period, during which Mrs XXX SEÑORA served as partner and member of the Board (legal representative and chairman), so that it evades the liability for that period, even if it ceased to be a shareholder as of July 30, 2002, nor when the company completed its term social. Furthermore, in relation to amending the structure of a society, as regards the participation of social capital, to take effect against third parties, it must meet certain requirements, including, first published in a newspaper extract official and also register with the Mercantile Registry of the Public Registry in accordance with the provisions of Article 19 and 235 of the Commercial Code and Article 22 of the Regulations of the Law on Registration of Documents in the Public Registry, which consists in cars. Also, this Administration also indicated that the act does not display any lack of requirements such as administrative act, because the transfers were motivated to tell officials that he was liable on adjustments to the company appointment; served Mrs xxx period in fiscal 1999 as a shareholder and member of the Board, which was noted in the movements mentioned. In addition, as part of the motivation for the movement of charges, he quoted Article 22 b) of the Code of Tax Procedures and Standards, which found that the partners and / or shareholders are liable to tax by certain tax debts and liquidated companies. Finally, the Tax Administration indicated that the certification public about the nature and ownership of the shares, and public certification of the period of social NEGOCITO of Mrs XXX SA . Do not constitute appropriate evidence to rebut the solidarity that is charged to her, especially since the alleged non-equity status from July 30, 2002, is not adequately demonstrated. (Folios 105 to 109) .- ****

5) That the January 19, 2005, she brought the lawsuit except Consortium Passive Necessary and nullity of the resolution area and, with the resources of revocation appeal allowance against the resolution-09-DT-RV 0147-4 above, stating the reasons for his disagreement. (Folios 115 to 125) .- ****************************************** *******************

6) The November 18, 2005, the Tax Administration Southern Area, gave the AU-resolution 09-RV-0202-5, except for denying litis consortium Passive Necessary and nullity alleged. It also said no action for the revocation raised, and by being right, gave way to appeal to the Court for Administrative Prosecutor gave notice to the appellant appears to be in defense of their rights. (Folios 160 to 168) .- **********

7) To date 14 December 2005, the appellant granted the site in response, submitted in writing to appear to expand the allegations set forth in the appeal. (Folios 173 to 179) .- *******************************

What procedures are in observing the requirements of law, Y – ****
CONSIDERING:

I. – That the above in the appeal against the decision determinative No. DT-09-RV-0147-4, and the writing appeared to be extracted the following claims: 1 – Exception Necessary litis consortium and Passive considered invalid, as the date of carrying out the transfer of charges, that act was violent and out of the right of defense of the subscription, every time you had to do under the criteria specified by the Administrative Tribunal Prosecutor. It also indicates absolute nullity of the resolution, not to go to the Tax Authority to consider the evidence offered and rejected. 2 – Exception prescription. 3 – Violation of the principle of legality and legal certainty that the “result” of the resolution stated that no tax liability against NEGOCITO THE LADY XXX SA . Has not been firmly committed. Furthermore, regarding the “considering”, not the Administration is right to point out that the signed, held throughout the legal life of the company cited the quality of shareholder, to see evidence in the folios of 35 to 48. The gestionante added that the tax authorities know how to transfer the shares, which may be by endorsement, and must be registered in the trade register, and the formalities to which the resolution is of a reform of laws which took place at the time. That given the wording of Article 22 b) of the Code of Rules and Procedures Tax is to be a succession inter vivos or liability for debts of others, and not a case of liability, because the latter applies if the company is liquidated. The appellant argues that the society of Mrs XXX NEGOCITO SA ., Died at the legal life November 13, 2003, however the tax authorities, knowing this issue and decided to simulate a notification of a non-existent, implying an improper action. He further claims that had not been proved its status as a partner. (Folios 115-125, 172-179) .- *****************************
II .- That the foregoing arguments were analyzed by the tax authorities in the various resolutions contained in the file, who felt, as the basis for the decision appealed, objecting that carries no right to their objections, by the following considerations: specific resolution No. DT-09-RV-0147-4, said, “(…) the motivation (…) in the period as a partner and member of the Board was in effect and therefore he can not escape the a responsibility that the legislation establishes as a partner and member of Board of Directors of a corporation on the decisions and outcomes of the events management and operations of the company as such, will not be accepted as valid to say the claimant or proof offered thereon (notarization folio 92) days from July 30, 2002 ceased to be a shareholder and the company ended at death (a certified copy of the protocol Minutes of the Extraordinary General Meeting of Shareholders which fell within of the company of Mrs XXX NEGOCITO SA., page 93) your responsibility as a member of the Board and therefore has died liability on the company in question, although that fact will be taken as valid after the period in question and there is no legal excuse of responsibility at a time past. In the second instance it is important to remind the claimant that the changes in the structure of society in the involvement of social capital to take effect towards third parties must first extract published in the official newspaper and must also register with the Mercantile Registry of Public Register in accordance with the provisions of Article 19 and 235 of the Commercial Code and Article 22 of the Regulations of the Law on Registration of Documents in the Public Register, which is not in the record providing evidence that the interested has complied with this procedure. (…) For when consent is implied that the period of fiscal reference she served as both a shareholder and member of the Board of that company as the plaintiff in the transportation office quoted mentions that the legislation classifies as is liable in a forceful motivating the act (…). As you can see the office plaintiffs in strict accordance with the principles of legality, legal reserve and due process in a reasoned manner and forceful act that led to report shipments of appointment by the claimant as liable solidarity by certain differences in the income tax and sales tax period of 1999 (01 October 1998 to 30 September 1999) of the taxpayer NEGOCITO of Mrs. SA XXX . (…) So the literal interpretation of the legislation in question is clear and while there is no binding case law should be applied in strict accordance with the principle of legality and law reserves therefore I concluded that the partners are shareholders liable to taxes by certain tax debts and liquidated companies. (…) Regarding the evidence, no sound evidence to rebut the solidarity that is charged to her, especially since the alleged non-equity status from July 30, 2002, is not properly established, (… ) III. ABOUT THE FUND: From the facts mentioned by the tax authorities: Is the claimant believes that the facts exist and are not objecting to the giving or should, firstly because it served as an administrator or as part of society and in second Instead of the above. With this, the claimant made no objections to the merits, in reason, in principle the transfer of charges, it will be confirmed in its entirety. (…) “. For its part, the resolution AU-09-RV-0202-5, the Revenue said: “(…) A. INVALIDITY: (…) 1) It is right to the appellant, since the resolution is that this administration gave them the proof offered, just read the statement in Recital III, last paragraph (page 109), and no the appellant to submit additional elemntos to guide the resolution to reject the resolution on that occasion, the resolution is confirmed. 2) Regarding the Transfer of charges was reported in late, we understand that refers to the transfer of charges that he was notified to him in solidarity as it was reported when the company was already dead investigation of legal life, it that’s not the appellant is right, when in the file determined in the investigation that resolution, which was communicated to her as liable under the tax law, (…) In summary, relation to the arguments offered to support the analysis nullity plea, it informed the taxpayer that they are not suitable to sustain a revocation, provided that if the institute invalidity born to life is legal prerequisite to there is a state of helplessness to run, which shows the appellant has not happened in the process that is ventilated, the opposite is seen in cars at all times she has been able to exercise their right to defense, (…). B. Litis CONSORCIO LIABILITIE NECESSARY. On these arguments offered, the Administration believes that it is not suitable to prove that litis Consortium declaring Passive needed, therefore, for lack of arguments to support the request, it must be rejected. (…) In connection with the case law in which solidarity can, (…) on which the Administration believes are not applicable to the case under study (…). C. RAPE the principle of legal certainty: (…) So while there is no binding case law to the contrary, should be applied in strict accordance with the principle of legality and legal reserve therefore I concluded that the partners are jointly liable to shareholders the taxes by certain tax debts and liquidated companies. (…) “. (Folios 105-109, 163-168) .- ************************************** *******

III .- That the Court as a supervisory body of law, avocado is the study and analysis of the entire administrative record compiled by a quo, and the file relating to NEGOCITO of Mrs. SA XXX . And before ruling on the appellant’s arguments for greater understanding, will set out an account of the background that originated the present case. First, as writing numbers 22-3, ladies and XXX SEÑORA Adriana Rivera ceciliana constitute the society of Mrs XXX NEGOCITO SA ., Which was recorded in the Volume 1140, Folio 166 and seat 207 “of the Directorate of Legal Persons of the Public Registry, as of November 13, 1998, see pages 35 to 47 of the dossier. This report stated that Mrs XXX SEÑORA be appointed as “President” of this society, taking in charge of judicial and extrajudicial representation of the same, with powers of general agent for an unlimited amount. According to second-Communication Performance Audit No. 1971000044526 “, notified on 17 January 2001, he reported to the legal representative of the society of Mrs XXX NEGOCITO SA ., Mrs ceciliana Rivera, on the commencement of a performance audit, the fiscal 1999 period, during which the appellant acted as company representative for appointment (see worksheets 333, 334 and 335, file No. 8917 of NEGOCITO of Mrs XXX SA.). Third-After making the actions and control procedures, as well as several interviews to the legal representative of the company mentioned (see worksheets Nos. 336, 339, 340, 342, 343, file No. 8917 of the Lady of NEGOCITO XXX SA.), the South Zone Revenue by means of Act No. 5451000092806, notified on 04 March 2002 (see Worksheet No. 3 on file No. 8917 of Mrs XXX NEGOCITO SA.) informed SEÑORA to XXX, as the representative of the company quoted the results of performance audit. Fourth-That as the company did not agree on certain practices to income tax in the fiscal 1999 period and the general tax on sales for the period October 1998 to September 1999, the tax authorities, proceeded to notify the legal representative of Mrs XXX NEGOCITO SA ., SEÑORA XXX on April 18, 2002, according to records visible on the pages 20 and 28 of the record 8917, shipments of charges Nos. 2751000036337 and 2751000036346, respectively, to exercise their right to defense. Fifth-, Mr XXX, as the legal representative of the company, the tour June 10, 2002, lodged a challenge against shipments of specified charges, attached to the same certification of legal status in the quality of representation is of Ms. Rivera ceciliana (see folio 57 file No. 8917). Sixth-That according to certification by a notary public (Folio 92 SEÑORA record No. XXX of 8647) ceciliana Mrs. Rivera, is no longer a member of the society of Mrs XXX NEGOCITO SA ., From July 31, 2002. Seventh-That in Extraordinary General Meeting of members held on July 31, 2002, with the assistance of all partners of Mrs XXX NEGOCITO SA ., Agree to the clause first, shorten the term of its legal life of five years, completing it on November 13, 2003, which was in writing protocolized No. 186-27, dated 06 August 2002, as shown in folio 93 of file No. 8647. Eighth-That due to the above, the South Zone Revenue advised Mrs SEÑORA XXX, 08 November 2004, as severally, transfer charges Nos. 2752000003557 and 2752000003532, corresponding to the determinations of the income tax period of fiscal 1999 on sales from October 1998 to September 1999, which is made up of Mrs XXX NEGOCITO SA . (see pages 57 to 85 records of 8647 SEÑORA XXX). Exposed above the background, the Board concluded that without a doubt, during fiscal 1999, according to the documents and actions of the audit, Ms. SEÑORA XXX, acted as “partners” and “President”, having responsible for the legal representation of the society of Mrs XXX NEGOCITO SA ., Which is the basic foundation of this case, since the time of the audit to the company, she had the qualities mentioned. It is important to add that the principle of accounting called “Accounting Period”, which determines the operations of the business should be measured in periods, and this is the mechanism by which a company has its operations in a given time, to measure the degree efficiency, which is reflected in the financial statements, which show, for a given period, which in this case, since 1 October 1998 to 30 September 1999 admissions and costs incurred to generate such income area that would be modified in any audit, whose differences with the Treasury, he was reported to the legal representative of that society in that period, ie in this case was notified SEÑORA XXX, as the representative legal society mentioned above. As a result, the Court notes that what happened in a given period (1999), should make known to the legal representative of the society that creates, or failing that in accordance with applicable law, to members of this society, an act that is at issue in this case. In accordance with the principle of legality in Article 11 of the Constitution and its similar to the General Law of Public Administration, public servants can only perform acts that are expressly authorized by law. In this regard, according to the Tax Administration found that South Zone SEÑORA XXX, served as the company liable cited criterion is that the Board review the legal basis used by the Tax Administration, which ended with the institute of responsibility solidarity by the appellant. Article 22, paragraph b) of the Code of Tax Procedures and Rules, provides: “(…) b) (…) for this purpose, the partners or shareholders of the liquidated companies should also be considered successors. (…) “(Emphasis in the original). Of this rule, the Court determined the following: First, to address the writing No. 186-27, on 06 August 2002 (See page 93 of the record 8647 of SEÑORA XXX), the society of Mrs XXX NEGOCITO SA . Reduced to five years term social, ie the company would end the legal life of 13 November 2003, this act is governed by the legislation, namely Article 201, paragraph a) of the Commercial Code, states that-”(…) The companies are dissolved by any of the following reasons: a) The expiration of the period stated in the deed office; (…)”, for its part, Article 209 of the same body of law says, ” (…) dissolved the company, will be liquidated to exist for the purpose of it. (…) “(Own emphasis). A smooth and legal interpretation of the articles cited, we conclude that the society of Mrs XXX NEGOCITO SA . Had begun the process of liquidation. Second, the need for further legislation governing the termination of membership. In this direction, of the Commercial Code, draws are as follows: “(…) Article 137: The corporations that delivers a detailed opinion shares keep the necessary records that record: (…) a) The name, nationality and residence of shareholder, the number of shares owned by you, stating the numbers, series, and other special classes, (…). Article 140: The company considered as a partner to register as such in the register of shareholders if the shares are registered and the holder thereof, if the wearer. (…) Article 687: These are securities issued for the person, whose name has been entered in the text of the document in the register kept for this purpose the issuer. (…) “(Own emphasis). Also on the subject of standing partner, the First Chamber of the Supreme Court, said: “(…) IX. With regard to the issue of lack of legitimacy of the actor, who has failed to establish the status of partner, by not displaying the proper action is endorsed in his name or show his registration in the register of shareholders. For a better understanding of the subject, being an action title named value, it should analyze the content of the legislation in force. The Commercial Code regulates these titles and in accordance with paragraph 120 expressly provides: “The action is the name by which accredits and transmits as a partner. The common shares – also called ordinary – are accorded equal rights and equal shares of capital stock and must be named. ” As the defendant states that the shares of the company are registered, ie express the name of the person to whom the action is necessary to study the two articles 687 and 140 of the Commercial Code. According to the ordinal 687, any act or transaction relating to such securities becomes effective if you join it and the register, as well as in section 140 ibídem registered partner is considered as such in the register of shareholders. This has put the Constitutional Court by voting No 1193/91 of 11 hours 4 minutes of the June 21, 1991: “In accordance with the provisions of Articles 137, 140 and 686 and following of the Code of Commerce as the company considered partners registered as such in his book of register of shareholders and to make any changes based on it is required that the shares have been acquired by endorsement nominative translational domain and that this request and, specifically, the ombudsman of society sufficient powers to settle the transfer … “. In addition, according to copies of the “Book of Shareholders” of society, visible in the worksheets of 453 to 455 of the bundle of sheets of the audit of 8917 records of Mrs XXX NEGOCITO SA ., Which consists SEÑORA XXX, for fiscal 1999, was owner of five shares of the company being audited. Therefore, according to the above, both in the rules of evidence in both cases, SEÑORA XXX, during fiscal 1999, which was performed an audit process, as well as for providing the legal representation of NEGOCITO of Mrs XXX SA . Also fulfill the condition of a member of that society. Accordingly, this concludes the College, the South Zone Revenue, under article 22 b) of the Code of Tax Procedures and Standards, in what was right is concerned, because as explained above, are met with budgets established in this rule, namely the liquidation process of the society of Mrs XXX NEGOCITO SA . And as a member of XXX SEÑORA in fiscal 1999. Moreover, the Code of Tax Procedures and Standards, states-”(…) Article 20 .- Compelled by external debt (as appropriate). They are responsible people forced by external debt, so without the taxpayer must, by express provision of law, comply with the obligations placed upon them. (…) “, Extracting the Court, in cases like this, solidarity was carried out by an external debt, because if the company is in liquidation, the tax authorities, by law, may go to partners as liable, the act was to be executed in this case because it considered taxable SEÑORA Mrs XXX, as liable. Having clarified the above, the Board now rule on the allegations raised by the appellant and states the following: 1 – on the arguments related to the exception of passive litis consortium needed, he says the Court, which contained no such which is present in this case, a quo as the Administration has implemented the optional litis consortium since because the society of Mrs XXX NEGOCITO SA ., Decided to shorten the period of his life to five years, the Administration is authorized, pursuant to Article 22 b) of the Tax Code, go to the partners of that, ladies and SEÑORA SEÑORA XXX YYY, each possessing a five shares of the company mentioned in order to continue the efforts to collect the tax debt. In this regard, the Court has indicated, “(…) In the case of shares of a simple declaration of duties, can never be necessary litis consortium, although it may occur voluntarily, because the obligation is by its nature by the person of the individual bound and as such subject to a judicial declaration also individual. Accordingly under an obligation of this nature, there is an optional litis consortium, as established in Article 107 of the Code of Civil Procedure, in which case the creditor may claim against any obligation debtor or against only one of them. Doctrine of Article 640 of the Civil Code (…) “. (Decision of the Second Civil Court No. 550 of 10 hrs.’s October 31, 1990, published in Revista Judicial No. 59). Similarly, the Constitutional Court has established: “In accordance with the rules that have been transcribed, the tax liability in this case is joint and several. This means that under the law and the doctrine of the obligations of solidarity, is the legal power to tax, a taxpayer choose to happen when the phenomenon of solidarity. (…) “(Resolution No. 2626-96 of 14 hours 57 minutes of the May 31, 1996). This Court finds that the previous interpretation in subexámine, is what best suits the prevailing doctrine and legislation on the matter, as the case of the solidarity tax, applying the principle of administrative discretion, which governs the discretionary acts of administrative bodies, is the most logical and reasonable is always a trial to determine the tax authorities in these cases, against whom, or who starts the process of determination to ensure an efficient and effective procedure that leads to a speedy recovery and safe, especially since the company is in process of dissolution, the Tax Administration, go to the members as jointly and severally liable. Moreover, it is stated that the principle of legality in paragraphs 11 of the Constitution and its similar to the General Law of Public Administration, in applying to this case, as regulated in Article 22 b ), quoted, does not that have been carried out acts untimely, because the liability to which the plaintiffs refer Office, compared to the adjustments to income tax and general sales of the fiscal period 1999, appellant was a partner and was a member of the Board, and therefore it can not shirk the responsibility that the law stipulates as a partner. Furthermore, with regard to the prescription period of fiscal 1999, before this Chamber has indicated that fiscal 1999 for the term of limitation is four years, according to the principles of non-retroactivity of the rules and safety law can not apply to tax periods prior to Act No. 7900, which came into effect from 1 October 1999, which amended the term of limitation by shortening the term of four to three years. In this respect, this Court has stated, “(…) It is this criterion Court, which in this case, the case of laws, tax liabilities which expire, they are substantive and not procedural rules for claiming immediate implementation, as it has also solved the Constitutional Court ruling in SCV 3740/99 of l6 hours 18 minutes of L9 May l999. With the above criterion, the Attorney General, via analog and integrated the principle of legality and legal reserve provided for in Articles 11 and 121 subsection 13) of the Constitution and the Civil Service Law, and 6 of the Code of Tax rules and procedures, establishing a new cause of extinction of tax obligations, to retroactively shorten the limitation period of four to three years to fiscal periods already completed and on which had been established the ground rules clear and precise, on the absence of any transitional one that explicitly set the deadline for earlier periods. With the above criterion is causing dire economic consequences to the Treasury, flagrantly violated the rule of law cited. Precisely by the principle of legal certainty, as indicated by this Attorney, he had respected the existing provision for those periods, which had a deadline set by the Act expressly 7535, either four years. Finally, the Tribunal, as the comptroller of the administrative law clarifies that in cases such as this, to illegal administrative acts, this room is expressly prohibited under Article 164 subsection c) … i) of the Code of Rules and Procedures for Tax implement them, why, in the sub, in desaplica so explicitly. Based on the foregoing, it is stated without the exception of prescription interposed. (…) “(Bug 264-2001-P, of the nine hours of the sixth day of September 2001). Furthermore, coupled with the above, in accordance with the regulations related to it, you have to start acting like the audit to the company of Mrs XXX NEGOCITO SA ., Was reported on January 17, 2001 (8917 Folio 333 of the file, file audit sheets of Mrs XXX NEGOCITO SA.) Interrupted the limitation period, which again computed from 1 January 2002 until December 31, 2005, the notification of the decision No. 09-DT-0147-RV-4, the appellant SEÑORA XXX on December 29, 2004 (Folios 77 and 85 of the dossier SEÑORA No. XXX of 8647), the prescription had not run, so this argument is invalid. Furthermore, in accordance with Article 54 of the said Code, the presentation of the resources of review and appeal, carried out on January 19, 2005, special interrupt is generated which will return to run from 1 January in the year following the issuance of the ruling by the Administrative Court Prosecutor (Folios 97 to 125 of SEÑORA record No. XXX of 8647). Furthermore, regarding the alleged invalidity, the Court indicates that it is not certain that was not worth testing offered, just as has been demonstrated and explained back lines, the fact that the evidence related appellant, which indicated that Ms. Rivera ceciliana is not a member of the company from July 31, 2002, is not acceptable because during the 1999 fiscal period, as demonstrated, if serving as an Partner of the repeated event. Moreover, as to the arguments in section 2 – this tells the College, which regards the “exception of prescription, it was explained in the previous section, because when it was notified of the specific resolution No. DT-09-RV-0147-4, XXX SEÑORA to the term of limitation had not operated. Furthermore, as is well explained in this “Whereas, the Tax Administration has implemented what law is, not violating the principle of legality or of legal certainty. For as well he said, precisely because the Tax Authority a public body, must obey the law, and in that sense, it has correctly applied Article 22 b) of the Code of Regulations and Procedures Tax, because during the fiscal period 1999 Mrs XXX SEÑORA, acted as partner of Mrs XXX NEGOCITO SA . And society as it began a legal process of liquidation, the Tax Administration has the authority, by the principle of solidarity, to go to the partners to pursue the tax debt, which as is well explained, has been consistent with tax law. Moreover, the Court indicates, that given the history behind exposed lines, which pulls in the case of society had not been a succession inter vivos, since NEGOCITO of Mrs XXX SA . Has initiated efforts to liquidation of the company, which is generated by shortening the period that was made and that was proven in the record, therefore no such succession inter vivos, which would happen if the company if any while his company had transferred social term. In conclusion of the foregoing, and given the sequential history of this case, the Board confirms the adjustments brought against XXX SEÑORA as liable to NEGOCITO of Mrs XXX SA *************************************** .-

THEREFORE

Declare no exceptions litis consortium Passive Necessary and prescription, and rape by the alleged invalidity of the principle of legality and legal certainty. Confirming the decision. Declared exhaustion of administrative remedies. NOTIFÍQUESE. (Exp. 8647) .- ***************************

Luis Rodriguez Picado. Mr. Franklin Tiffer Reyes.

PRESIDENT

Mr. Abel Gómez Zúñiga. Lic. Ma de los Angeles Acuña.

SECRETARIAT

JFCP/.10/11/2006.