The Tax Court in a recent pronouncement expressed its position regarding the binding nature of cassation precedents for the Administrative Courts. The most relevant points of the RTF No. 04070-2-2024 are as follows
The controversy resolved by RTF No. 04060-2-202
What was the object of the controversy To determine whether the economic incentives given for termination of employment by mutual consent, where it was agreed to be exempt from income tax in case the payments are used for the incorporation of a company, were subject to income tax in the fifth category.
And what does the Court conclude That the tax exemption benefit would be applicable, provided that the taxpayer had destined the received amount to the incorporation of a new company, which did not occur. Therefore, it confirms the position of classifying what was received as fifth category income.
The Court’s position regarding the binding of the precedents of Cassation
The plaintiff alleged the application of Cassation 48111-2019 in which the Court discussed whether the instances of merit made a correct evaluation of the evidence for which it finally established that by the application of article 22 of the TUO of the Organic Law of the Judiciary (D.S. No. 017-93-JUS), article 397 of the CPC (R .M. No. 010-93-JUS) and article 36 of the TUO of the Law that Regulates the Contentious Administrative Process (Supreme Decree No. 011-2019-JUS) “… the precedents contained in cassation sentences are binding only for jurisdictional bodies and, in such sense, not for this Administrative Court” .
Source: Tribunal Fiscal