Tax Credit Guarantees

Posted on Feb 12, 2025 in Law

Tax Credit Guarantees: What You Need to Know

What Secures a Tax Credit?

The taxpayer demonstrates the Treasury’s intention to cover tax credits through a warranty. This ensures the recovery of credits under Fiscal Articles 141 to 144 and 60 to 71.

Ways to Guarantee Tax Interest (Art. 141)

Acceptable forms of guarantee include:

  • Cash deposit
  • Pledge or mortgage
  • Guarantee from an authorized institution
  • Joint obligation assumed by others
  • Securities or value of the taxpayer’s credit portfolio (administrative)

Warranty Modifications

The bond amount can be adjusted if, at the end of the covered period, there is no tax credit. This means the warranty must be upgraded annually to cover the current tax credit and any surcharges.

Additional guarantees are not required in PPS if the embargoed goods are sufficient to ensure fiscal interest, or when the taxpayer declares under oath that these are their only seized possessions.

When Guarantees Are Required (Art. 142)

Guarantees are required in the following cases:

  1. Suspension of the PAE (within 45 days)
  2. Extending payment for tax credits
  3. Request to apply the product under CFF Art. 159
  4. Other cases specified in the code

How Effective Are the Guarantees? (Art. 143)

The taxpayer shows the Treasury’s intention to cover tax credits through a warranty. This ensures the recovery of fiscal credits. In case of breach by the taxpayer, the authority enforces the offered guarantees, transferring them to the tax authorities.

Who Should Be Guaranteed?

  1. Federal Treasury
  2. Decentralized agencies (e.g., social security)
  3. Treasuries or agencies of federal entities

Obligation to Notify the Warranty

CFF Art. 144 requires taxpayers who guarantee tax interest to provide written notice that the warranty has been communicated to the tax credit authority.

How to Cancel Guarantees (Art. 70 RCFF)

Guarantees can be canceled:

  1. By substitution of collateral
  2. By payment of the tax credit
  3. If the resolution that gave rise to the warranty is ineffective
  4. Any other event that should be canceled in accordance with tax provisions

How Should Notifications Be Made? (Art. 134)

  1. Personally, by certified mail, or data message with return receipt for subpoenas, injunctions, and administrative acts that can be challenged.
  2. By mail or telegram.
  3. In courtrooms: when the person to be notified is unreachable at their home, disappears, or opposes the notification as per Article 110 Frac V.
  4. Edicts: When a person who must be reported has died and the representative of the succession is unknown.
  5. For instructive purposes: Cases and formalities of Art. 157, 2nd paragraph (PA acts of Execution of notification). If the person or legal representative is not present, the process is diligently carried out with whoever is at home, or in their absence, with a neighbor.

How Are Notifications Made Abroad?

Notifications may be made by the tax authorities through the means set out in Art. 134 FI: II: IV.