Mexico: Information Flash - Mandatory Application of Supreme Court of Justice Jurisprudence

The Full Session of the Supreme Court of Justice of the Nation recently established jurisprudence that is mandatory for all Mexican tribunals, to the effect that the Federal Tribunal of Fiscal and Administrative Justice (formerly Federal Fiscal Tribunal) is obliged to apply the jurisprudence established by the Supreme Court of Justice of the Nation on the unconstitutionality of the laws in question.

It is established that the obligation to apply the jurisprudence issued by the Supreme Court on the unconstitutionality of a given law, does not imply that the Federal Tribunal of Fiscal and Administrative Justice is entitled to overstep its powers by also pronouncing on the unconstitutionality of laws, rather that the latter Tribunal shall confine itself to ruling on the unlawfulness of the acts carried out in accordance with the laws ruled unconstitutional by the jurisprudence established by the Supreme Court.

Accordingly, taxpayers that have complied with the provisions of laws declared unconstitutional through the jurisprudence of the Supreme Court of Justice of the Nation, can cease doing so from this time forward because, if the tax authorities should demand that such laws be observed, taxpayers might successfully defend their case before the Federal Tribunal of Fiscal and Administrative Justice on the aforementioned grounds.

Additionally, and as long as the Supreme Court of Justice of the Nation or the Collegiate Tribunals do not limit the effects of the jurisprudence analyzed herein, it might be legally possible to apply for the refund of taxes paid in prior years, as a result of having complied with the provisions of laws declared unconstitutional by the jurisprudence of the Supreme Court.

Clearly, it will be necessary to analyze each particular case to establish the most advisable strategy to cease applying the provisions of laws the jurisprudence of the Supreme Court has declared unconstitutional and obtain the refund of taxes paid in prior years in compliance with the aforementioned unconstitutional legal provisions.