- Mendoza, Palacios, Acedo, Borjas, Páez Pumar & Cía. has always been considered particularly strong on tax planning and tax litigation.
- Our involvement in taxation matters started in the early times of the oil concessions granted to foreign companies. Until the nationalization process, the financial participation of the government in the oil business was through the State's power to tax. As counselors to some of the former concessionaires during the pre-nationalization regime, and subsequently as counselors to several of the nationalized oil companies, we have played a role in the evolution of the tax laws simply by arguing our clients’ cases.
- At the tax planning level, we help our clients to organize their activities in such a way as to obtain the most advantageous results. Several of our lawyers are permanent members of the accounting, auditing and financial committees, set up internally by some of our largest clients, to deal with tax and related matters. In addition, it is customary for us to help structure all kinds of transactions, paying special attention to their tax consequences.
- With regard to tax disputes, Mendoza, Palacios, Acedo, Borjas, Páez Pumar & Cía. has accumulated extensive experience. We routinely participate, on the side of the tax payer, in the administrative procedure which must be followed in Venezuela by the Tax Administration to formulate a claim against the tax payer. This process, which includes a certain degree of negotiation and/or reasoned opposition, represents the first phase of any tax dispute. When settlement in favor of the client is not possible at this stage, we handle the process of administrative appeals and, if necessary, continue to argue the case before the tax courts, the superior courts, and, eventually, the Supreme Tribunal of Justice.
In 1999, Mendoza, Palacios, Acedo, Borjas, Páez Pumar & Cía., on its own initiative obtained a landmark decision from the Supreme Court of Justice regarding Article 59 of the Organic Tax Code. The Court accepted the argument that the accumulation of default interest at 12% annually, together with the monetary actualization of the taxes caused (that is, multiplying the amount due by the inflation rate), injured the constitutional right of property, and could be viewed as confiscatory.
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