Taxpayer Rights, Colombian Report: Cahiers du Droit Fiscal International

The evolution of taxpayers’ rights in Colombia over the last 23 years has been positive.
This is due to a constitutional approach to tax law. The institutional framework
displays the acknowledgement of constitutional rights enjoyed by the
taxpayer in his capacity to have human rights, as well as rights linked to his condition of taxpayer covered by a list of rights in the tax statute since December 2012. A number of constitutional actions are available and in use in tax matters (compliance with the Constitution, protection of human rights, popular actions, etc.), in addition to: (a) specific tax procedures for collection and enforcement (lex special ); (b) procedures in administrative matters (lex general ); and (c) judicial proceedings including the possibility of challenging (i) the protection of fundamental rights against final decisions of the judiciary with the sole exception of decisions of the Constitutional Court (CC), and (ii) rulings and final acts of the tax administration. New provisions in administrative and judicial procedures are expected to reduce litigation, time and formal requirements.
Notwithstanding the above, more specific procedures in tax matters are necessary to avoid discretion and to achieve enforcement at the administrative level without much litigation being involved. As such, it is necessary: (a) to define the scope of certain rights, e.g. in the framework of international exchanges of information; (b) to give full effect to the non bis in idem principle whenever the taxpayer or person responsible faces penalties, and interest as well as disciplinary and criminal sanctions in order to prevent two parallel sets of court proceedings arising from the same factual circumstances; (c) to establish specific procedures to warrant audi alteram partem in activities related to non-final and non-appealable acts, e.g. audits. In such cases tutela should be the last remedy available and not the only one.
From an institutional perspective it is important to introduce safeguards to balance the powers of Congress, the executive, the tax administration and high courts. This would help to improve the compliance of taxation with the basic principles and purposes related to the division of powers. Congress should ensure lawfulness allowing not only general public participation processes but also public consultation in tax matters. Measures in this field should ensure: (a) more compliance with the settled principles of taxation; (b) that the regulatory power of the executive (President and Ministry of Finance) in tax matters is reduced; (c) higher levels of compliance with constitutional law before a tax law is approved and transparent procedures in the publication of tax laws; (d) the faster reaction of Congress to systematic infringement of taxpayers’ rights in order to warrant general effects by law and to avoid costly and long litigation.
other legal safeguards needed include: (a) the application of the principle ne
bis in idem to tax audits to ensure that the taxpayer does not receive more than
one audit in respect of the same taxable period; (b) the introduction of limits on
the frequency of audits of the same taxpayer; (c) the establishment of a procedure to ensure that legally privileged material is not taken in the course of a search; (d) the introduction of procedures to ensure that: (i) the taxpayer’s right of nonincrimination is applied in tax matters, and (ii) there are restrictions on the use of information supplied by the taxpayer to the tax administration in a subsequent penal (e.g. disciplinary) and/or criminal procedure.
From the tax administration perspective a more friendly service-oriented
approach would be welcomed. Safeguards to consider include: (a) all those mentioned above; (b) implementing acts ex officio to notify all affected taxpayers and arrange repayments to them whenever systematic errors in the assessment of tax come to light with decisions of the State Council (SC) or the CC beyond the specific court case; (c) avoiding naming and shaming of taxpayers, and abolishing the public inscription “sealed by evasion”.
At the judicial level: (a) since tax privacy is acknowledged by the Constitution
and protected by law, judges should consider redacting the names of taxpayers in their decisions; (b) the powers of the Tax ombudsman could be improved by
allowing his intervention with the judiciary and attaching his unit to the Ministry of Justice. At the present the unit belongs to the Ministry of Finance.
both the state and taxpayers would benefit from (a) the creation of an administrative court to quash an assessment/decision, before the case may proceed to a judicial hearing; (b) arrangements for alternative dispute resolution (e.g. mediation or arbitration) before a tax case proceeds to the judiciary, in addition to those existing on interest and sanctions; (c) a tax court at the judicial level, including a chamber for tax matters at the CC.
Tax matters are in permanent flux and the following circumstances are very
positive: (a) the creation of the Tax ombudsman unit; (b) the new administrative
procedures for the administration and the judiciary; (c) the constitutional actions
available to all citizens and residents, and in particular the action of unconstitutionality and the action of tutela for the protection of human rights. However, it is necessary: (a) to reduce the discretion of the tax administration in fields not regulated and in non-final, non-appealable acts; (b) to balance in practice the powers attributed to Congress, to the executive, the tax administration and the high courts; (c) to work on specific procedures to make effective the many rights granted or acknowledged to the taxpayer at the administrative level, in particular, non-self-incrimination, the right to be heard, audi alteram partem and the non bis in idem principle.
This report deals with good practice and minimum standards for taxpayers’ rights protection from a Colombian perspective. The positive evolution of taxpayers’ rights over the last 20 years has mainly been due to a constitutional approach to tax law. Nevertheless, there is an expectation of higher standards, including specialized tax tribunals in the judiciary, an administrative tax court, and review of the sanctions regime.