Global Practice Guide
Tax Rulings
A Global Practice Guide prepared by the
Lex Mundi Tax Group
This guide is part of the Lex Mundi Global Practice Guide Series which features
substantive overviews of laws, practice areas, and legal and business issues in
jurisdictions around the globe. View the complete series at:
www.lexmundi.com/GlobalPracticeGuides.
Lex Mundi is the world’s leading network of independent law firms
with in-depth experience in 100+ countries. Through close collaboration,
our member firms are able to offer their clients preferred access to
more than 21,000 lawyers worldwide – a global resource of unmatched
breadth and depth.
Lex Mundi – the law firms that know your markets.
www.lexmundi.com
About This Guide
The Tax Rulings Global Practice Guide was conducted by members of the Lex Mundi Tax Practice
Group. This global practice guide covers rulings by tax authorities in each listed jurisdiction, including
information on taxpayer’s rights, and the limitation and revocation of rulings.
The descriptions set forth below are intended only as a general overview of the law. No summary can be
complete, and the following is not intended to constitute legal advice as to any specific case or factual
circumstance. Readers requiring legal advice on any of the specific case or circumstance should consult
with counsel admitted in the relevant jurisdiction.
Please note that each response was provided on a different date, and therefore the answers to the survey
refer to laws and regulations in force on that specific date.
Table of Contents
Australia ......................................................................................................................................................................7
Belgium .......................................................................................................................................................................9
Bolivia ........................................................................................................................................................................11
Brazil ..........................................................................................................................................................................12
Bulgaria .....................................................................................................................................................................14
Canada, Manitoba ...................................................................................................................................................16
Canada, Ontario ......................................................................................................................................................18
Canada, Quebec ......................................................................................................................................................20
Cayman Islands .......................................................................................................................................................23
China ..........................................................................................................................................................................25
Colombia ...................................................................................................................................................................26
Cyprus .......................................................................................................................................................................28
Czech Republic .......................................................................................................................................................30
Denmark ....................................................................................................................................................................32
Dominican Republic ...............................................................................................................................................34
Egypt ..........................................................................................................................................................................36
Estonia.......................................................................................................................................................................38
Finland .......................................................................................................................................................................40
www.lexmundi.com
Page 1
© 2012 Lex Mundi
Germany ....................................................................................................................................................................43
Greece .......................................................................................................................................................................45
Grenada .....................................................................................................................................................................47
Guatemala .................................................................................................................................................................49
Hong Kong................................................................................................................................................................51
Iceland .......................................................................................................................................................................53
India ............................................................................................................................................................................55
Ireland ........................................................................................................................................................................57
Isle of Man ................................................................................................................................................................59
Kuwait ........................................................................................................................................................................61
Latvia .........................................................................................................................................................................63
Malaysia ....................................................................................................................................................................65
Malta ...........................................................................................................................................................................67
Mexico .......................................................................................................................................................................69
New Zealand .............................................................................................................................................................71
Nicaragua ..................................................................................................................................................................73
Nigeria .......................................................................................................................................................................76
Pakistan.....................................................................................................................................................................79
Peru ............................................................................................................................................................................81
Poland ........................................................................................................................................................................83
Romania ....................................................................................................................................................................85
Scotland ....................................................................................................................................................................87
Serbia .........................................................................................................................................................................89
Slovak Republic ......................................................................................................................................................90
Spain ..........................................................................................................................................................................93
Taiwan .......................................................................................................................................................................95
Turkey ........................................................................................................................................................................97
United Arab Emirates.............................................................................................................................................99
USA, Alabama ........................................................................................................................................................101
www.lexmundi.com
Page 2
© 2012 Lex Mundi
USA, Arkansas ......................................................................................................................................................103
USA, Georgia .........................................................................................................................................................105
USA, Hawaii ............................................................................................................................................................107
USA, Idaho ..............................................................................................................................................................110
USA, Kansas ..........................................................................................................................................................112
USA, Louisiana ......................................................................................................................................................114
USA, Missouri ........................................................................................................................................................116
USA, New Mexico ..................................................................................................................................................118
USA, North Carolina .............................................................................................................................................120
USA, Puerto Rico ..................................................................................................................................................123
USA, South Carolina ............................................................................................................................................124
USA, South Dakota ...............................................................................................................................................125
USA, Utah................................................................................................................................................................127
Venezuela................................................................................................................................................................129
www.lexmundi.com
Page 3
© 2012 Lex Mundi
Tax Rulings
Argentina
Prepared by Lex Mundi member firm Marval, O’Farrell & Mairal
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, taxpayers have the right to request a ruling from the Argentine Tax Authority (Administración
Federal de Ingresos Públicos –AFIP-). The National Constitution provides for a general right to make
requests to the authorities. Furthermore, the right to request a ruling from the AFIP is granted by the
Tax Procedural Law N° 11,683 and its regulatory decree. There are two regimes: one is aimed to
obtain binding rulings and the other non-binding ones. The regime aimed at obtaining non-binding
rulings is governed by the Tax Procedural Law’s regulatory decree. Under such decree, the ruling
cannot be appealed. Furthermore, the ruling is not mandatory for the taxpayer or the Argentine Tax
Authority. The regime aimed at obtaining binding rulings is governed by the Tax Procedural Law N°
11,683 and the General Resolution (AFIP) N° 1948/2005. We focus the following answers on the
latter regime (binding rulings).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The AFIP will only issue rulings concerning Federal taxes (e.g., income tax, value added tax,
minimum presumed income tax, personal assets tax, etc) and social security . Taxpayer’s request for
rulings must be based on actual cases or investment projects on which taxpayers can show a
particular and direct interest. The AFIP will not issue rulings on issues (a) governed by conventions
for the avoidance of double taxation , (b) that relate to the application of payments on account of
future obligations (percepciones) and withholding regimes, and (c) that are being assessed at the
time of the request and the taxpayer is already notified of the existence of that procedure.
Furthermore, please note that the request for a ruling must be submitted before the taxable event
occurs or before the due date to submit the tax return in which the taxable event must be declared.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Taxpayers have the right to appeal the rulings to the Ministry of Economy (Ministerio de Economía y
Producción). Please note that the appeal does not suspend the effects of the ruling. The AFIP itself
can modify its rulings, but any change thereof will only have effects as of the date of said change.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The tax authority can revise, modify or revoke its ruling at any time and there is not a fixed term for
the process to be over.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
www.lexmundi.com
Page 4
© 2012 Lex Mundi
Taxpayers are not granted with any specific legal defense against an attempt to revoke a tax ruling.
However, in the event that a ruling is revoked, the taxpayer might appeal such decision under the
general provisions of the Tax Procedural Law, which provides for an appeal process against any
decision of the AFIP that affects a taxpayer. Such appeal is decided by the director of the AFIP, and if
it is still against the taxpayer, such decision could be revised before a judicial court.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The revocation or modification of a tax ruling is effective for the taxpayer only for the taxable events
occurred after such revocation or modification has been notified to the taxpayer.
Contact Information
Walter Keiniger
wk@marval.com.ar
Marval, O’Farrell & Mairal
Av. Leandro N. Alem 928, 7th floor
Buenos Aires, C1001AAQ
Argentina
Tel 54.11.4310.0100 Fax 54.11.4310.0200
www.marval.com.ar
www.lexmundi.com
Page 5
© 2012 Lex Mundi
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 6
© 2012 Lex Mundi
Tax Rulings
Australia
Prepared by Lex Mundi member firm Clayton Utz
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Australian taxpayers have a right under the tax legislation to request a private ruling. The
Commissioner of Taxation may, however, decline to make a ruling in certain circumstances, including
where the making of the ruling would prejudice or unduly restrict the administration of a taxation law,
where a ruling has already been issued, or the matter sought to be ruled on concerns the exercise of
explicit Commissioner discretion.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Rulings may be obtained on a broad range of tax issues relating to income tax, Medicare levy, fringe
benefits tax, franking tax, withholding tax, GST, luxury car tax, wine equalisation tax, excise duty and
the administration and/or collection of taxes.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Generally rulings are definitive and binding against the Commissioner. A ruling binds the
Commissioner in relation to a taxpayer if the ruling applies to the taxpayer and the taxpayer relies on
the ruling by acting or omitting to act in accordance with the ruling.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The Commissioner may make a revised ruling if the scheme to which the earlier ruling relates has not
been carried out or if the earlier ruling relates to income year or other accounting period that has not
begun. Once the revised ruling is made, the original ruling ceases to apply.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The Commissioner is entitled to revoke a ruling in the circumstances set out at 4 above.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Again, refer to 4 above. As the revocation can only occur with respect to future years, there is no
question of retrospective application.
www.lexmundi.com
Page 7
© 2012 Lex Mundi
Contact Information
Mark Friezer
mfriezer@claytonutz.com
Clayton Utz
Level 15
1 Bligh Street
Sydney, New South Wales 2000
Australia
Tel 61.2.9353.4000 Fax 61.2.8220.6700
www.claytonutz.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 8
© 2012 Lex Mundi
Tax Rulings
Belgium
Prepared by Lex Mundi member firm Liedekerke Wolters Waelbroeck Kirkpatrick
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes It is granted by tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The ruling procedure provides legal certainty for investors by allowing taxpayers to obtain a binding
ruling in respect of the application of all federal taxes (and some regional taxes) to specific projects.
Any transaction, situation or circumstance that has not yet given rise to any tax consequences may
be submitted to the tax authorities. Tax rates, tax procedures and tax increases are not subject to a
ruling since the intention is not to grant exemptions.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
In principle, advance ruling decisions are legally binding on the tax authorities for five years, but can
be renewed. A ruling will cease to be enforceable only if: • the consequences of the transaction are
altered by subsequent internal law, EU law or treaties; • if the consequences of the transaction
appear to be contrary to existing internal law, EU law or treaties; or • if the principal consequences of
the transaction have been altered by factors that are directly or indirectly attributable to the taxpayer.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
See answer to question 3.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
A ruling ceases to be enforceable only if: • the consequences of the transaction are altered by
subsequent internal law, EU law or treaties; • if the consequences of the transaction appear to be
contrary to existing internal law, EU law or treaties; or • if the principal consequences of the
transaction have been altered by factors that are directly or indirectly attributable to the taxpayer. In
other circumstances, the tax authorities are not allowed to revoke a tax ruling during its validity period
(i.e. 5 years as a matter of principle).
www.lexmundi.com
Page 9
© 2012 Lex Mundi
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The revocation of a tax ruling is as a matter of principle not retroactive. Revocation could however be
retroactive if the operation or the situation envisaged was not completely or correctly described in the
ruling application.
Contact Information
Jean-Michel Degee
Jm.degee@liedekerke.com
Liedekerke Wolters Waelbroeck Kirkpatrick
Boulevard de l'Empereur 3 Keizerslaan
Brussels, B-1000
Belgium
Tel 32.2.551.15.15 Fax 32.2.551.14.14
www.liedekerke.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 10
© 2012 Lex Mundi
Tax Rulings
Bolivia
Prepared by Lex Mundi member firm C.R. & F. Rojas - Abogados
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
It is granted by Articles 115 through 120 of the Tax Code.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Both. The tax tax ruling can be limited to certain topics, or can be obtained on every tax issue.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings are definitive. A tax court authorization is not required.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Tax authorities do not have a right to start a tax ruling revocation process.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Not applicable.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Not applicable.
Contact Information
Fernando Rojas
Fernando@rojas-lawfirm.com
C.R. & F. Rojas - Abogados
Calle Federico Zuazo 1598
Edif. Park Inn - Piso 11 - P.O. Box 662
La Paz,
Bolivia
Tel 591.2.231.3737 Fax 591.2.211.2775
www.rojas-lawfirm.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 11
© 2012 Lex Mundi
Tax Rulings
Brazil
Prepared by Lex Mundi member firm Demarest e Almeida
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes the taxpayers have the right to request a ruling from the tax authorities. This right is granted by
Article 46 of the Federal Decree # 70235/72 that regulates the Administrative Tax Proceeding.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The taxpayer may file a resquest for ruling on the interpretation of the tax law applicable to any
specific fact.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The tax rulings will be in force, producing its effects, until the law changes, or the taxpayer is notified
that the ruling has been revoked by the tax authorities. The tax authorities does not need a court
authorization to revoke a ruling.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No. The tax authorities may do it at any time.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
No. The tax authorities may revoke a ruling at any time. In case they do it there is no legal defense to
keep the ruling in force. However, in case the tax authorities issue an assessment due to the fact that
the taxpayer continued to act in accordance with revoked ruling the taxpayer may always discuss the
subject matter in the administrative and/or judicial courts.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The revokation of a tax rulling is not retroactive, unless the new understanding is more favorable to
the taxpayer.
www.lexmundi.com
Page 12
© 2012 Lex Mundi
Contact Information
Oswaldo L. Moraes
omoraes@demarest.com.br
Demarest e Almeida
Av. Pedroso de Moraes, 1201
Centro Cultural Ohtake
Sao Paulo, 05419-001
Brazil
Tel 55.11.3356.1800 Fax 55.11.3356.1700
www.demarest.com.br
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 13
© 2012 Lex Mundi
Tax Rulings
Bulgaria
Prepared by Lex Mundi member firm Penkov, Markov & Partners
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
The concept of tax ruling is not explicitly regulated in the Bulgarian tax legislation. Under Bulgarian
tax laws taxpayershave the right to request several types of acts to be issued by the tax authorities: 1.
guidelines and/or interpretation of the tax laws; 2. administrative acts (certificates mostly) certifying
facts of legal relevance or recognizing or denying the existence of rights or obligations - they concern
the particular taxpayer (the applicant) and usually refer to facts or evidence the existence or lack of
rights or obligations which are relevant for certain particular procedure (tax inspection, purchase of
properties etc). The right to file the above requests is explicitly provided for in the tax law (the Tax and
Social Insurance Procedure Code). However, it is also a manifestation of the general consitutional
right of each Bulgarian citizen to obtain information from any state body or institution on any matter of
legitimate interest to them, provided that such information is not classified as a state secret or other
secret protected by the law and does not affect the rights of others.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
There is no limitation to the topics for which requests under item 1 above may be filed.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The guidelines pointed in item 1 in question 8 are not binding for the tax authorities and in case of
subsequent tax inspection the tax inspectors may have different position and to interpret the tax law
differently, regardless of that the basic facts have not changed. In this respect the guidlines are not
definitive and no court authorization is required for their revocation. The administrative acts pointed in
item 2 in question 1 are not definitive and may be appealed before the tax authorities and if confirmed
thereby - before the court.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
With respect to the guidelines pointed in item 1 in question 8 there is no deadline for starting the
revocation process as far as they are not official acts and there is no specific revocation procedure. In
this respect, in any particular case (during tax inspection or audit for example) the tax authorities may
express position and interpret the tax law in connection with the particular case differently from the
guideline without being obliged to substantiate their different position. The act which shall be issued
as a result from the said procedure (inspection, audit) may not be repealled only because of such
different interpretation.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
No, please see the above answer.
www.lexmundi.com
Page 14
© 2012 Lex Mundi
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
See above.
Contact Information
Elina Ruseva
lawyers@penkov-markov.eu
Penkov, Markov & Partners
13B Tintyava Str., Floor 6
Sofia, 1113
Bulgaria
Tel 359.2.971.3935 Fax 359.2.971.1191
www.penkov-markov.eu
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 15
© 2012 Lex Mundi
Tax Rulings
Canada, Manitoba
Prepared by Lex Mundi member firm Thompson Dorfman Sweatman LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. The right is granted by administrative rules established under tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Tax rulings may only be obtained in respect of matters dealing with the interpretation and application
of the tax laws to a specific circumstance.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings cannot be revoked, but they are not binding on tax authorities or the tax courts.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Not applicable.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The only defense available to a taxpayer is to apply for waiver of interest and penalties imposed on
the taxpayer who followed a ruling.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Not applicable.
Contact Information
Leilani J. Kagan
ljk@tdslaw.com
Thompson Dorfman Sweatman LLP
201 Portage Avenue, Suite 2200
Winnipeg, Manitoba R3B 3L3
Canada
Tel 1.204.957.1930 Fax 1.204.934.0570
www. tdslaw.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 16
© 2012 Lex Mundi
Tax Rulings
Canada, Nova Scotia
Prepared by Lex Mundi member firm McInnes Cooper
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, granted by tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Limited to application of law. Rulings not available for questions of fact/ Rulings not provided for
provincial or territorial tax issues.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Definitive. No authorization required from court.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Not applicable.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Not applicable.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Not applicable.
Contact Information
Ray Adlington
ray.adlington@mcinnescooper.com
McInnes Cooper
1300-1969 Upper Water Street
Purdy's Wharf Tower II
Halifax, Nova Scotia B3J 2V1
Canada
Tel 1.902.425.6500 Fax 1.902.425.6350
www.mcinnescooper.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 17
© 2012 Lex Mundi
Tax Rulings
Canada, Ontario
Prepared by Lex Mundi member firm Blake, Cassels & Graydon LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
There is no right to request a ruling under Canadian federal income tax law. However, as an
administrative matter, the Canada Revenue Agency ("CRA") will consider requests for advance
income tax rulings on matters related to the application of the provisions of the Income Tax Act to
specific proposed transactions. The CRA considers rulings to be binding only opposite the specific
taxpayers involved in the ruling request, and only to the extent the disclosure of material facts and
proposed transactions is accurate and complete.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The CRA will not rule on all topics. Matters that are purely factual -- such as for example the
character of an item as income or capital -- are difficult to obtain rulings on. Furthermore, the CRA
generally declines to rule unless there is some genuine interpretive uncertainty concerning the matter
-- if the law is reasonably clear, a ruling may not be available.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings in Canada are administrative in nature, so there is no legal impediment to the CRA
declining to abide by a ruling. In practice, however, provided there has been no change to the
applicable law, CRA will almost always abide by rulings they have given, even where administrative
policy has changed.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Not applicable.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
No, as noted above, there is no legal impediment to revocation of a ruling, though this really does not
occur in practice.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
If CRA refused to abide by a ruling (which as noted does not occur in practice), it would be as if no
ruling had been granted in the first place.
www.lexmundi.com
Page 18
© 2012 Lex Mundi
Contact Information
Jeffrey Trossman
Jeffrey.trossman@blakes.com
Blake, Cassels & Graydon LLP
199 Bay Street
Suite 4000, Commerce Court West
Toronto, Ontario M5L 1A9
Canada
Tel 1.416.863.2400 Fax 1.416.863.2653
www.blakes.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 19
© 2012 Lex Mundi
Tax Rulings
Canada, Quebec
Prepared by Lex Mundi member firm Blake, Cassels & Graydon LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. This is granted by administrative measures.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
I would think that generally all topics are accepted. Rulings only deal with proposed transactions (not
completed transactions). Rulings are also issued on questions of fact but only if it is possible to
determine all the material facts and those facts can reasonably be expected to prevail. More
particularly, the following, while not an exhaustive list, are most of the circumstances under which the
authorities may refuse to rule: (a) when a transaction is the same in character as a completed
transaction entered into by the taxpayer in a prior taxation year and the tax effect of the earlier
transaction is under discussion with the taxpayer, in dispute or under assessment or proposed
assessment, but is not before the courts; (b) when the central issue involves a matter that is before
the courts or, if a judgment has been issued, an appeal to a higher court is being considered; (c)
when the transaction is to be completed at some indefinite future time or where satisfactory evidence
is lacking that a proposed transaction is being seriously contemplated; (d) when the request for a
ruling contains alternative courses of action on the part of the taxpayer; (e) when the major issue is
whether a transaction should be viewed as being of an income nature or of a capital nature; (f) when
the matter involved is the determination of fair market value of property; (g) when the question
concerns tax-related calculations (e.g., the amount of refundable dividend tax on hand at a particular
time); (h) when a ruling would involve an interpretation of a provision in the Income Tax Act that has
not been enacted or would require a regulation and the particular regulation has not been
promulgated; (i) when a ruling would require an opinion as to generally accepted accounting
principles or commercial practices; (j) when a matter on which a determination is requested is
primarily one of fact and the circumstances are such that all the pertinent facts cannot be established
at the time of the request for the ruling. This could include issues involving residence, carrying on of a
business and the existence of a partnership; (k) when an issue would require an opinion or
interpretation of a foreign law; (l) when the taxpayer does not consent to the release of the ruling, in
severed form, to the public; and (m) when the ruling request does not otherwise comply with the
requirements.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
They are normally definitive unless subsequently amended due to additional facts or requests. The
rulings are based on a full and complete disclosure of all information that relates to the request. So it
is possible that if the authorities are not satisfied that this condition has been met, the ruling may be
revoked. When there is a material omission or misrepresentation in the statement of relevant facts or
proposed transactions submitted by the taxpayer or the taxpayer's authorized representative, the
ruling will be considered invalid and the authorities will not be bound by it. Moreover, a ruling ceases
to be valid if it was based on an interpretation of the law and that interpretation was subsequently
changed by the authorities as a result of a court decision. The ruling will be considered binding upon
www.lexmundi.com
Page 20
© 2012 Lex Mundi
the authorities only for the period prior to the date of the relevant court decision. If the law upon which
a ruling was based is amended, the ruling ceases to be valid from the effective date of the
amendment. If a ruling ceases to be valid in the foregoing circumstances, the taxpayer will not be
notified by the authorities. When an interpretation has been changed by the authorities, the new
interpretation will apply to all rulings issued after the effective date of change in interpretation. This
will be the case whether or not the ruling request was received prior to the effective date of change in
interpretation. Changes in interpretation are announced publicly. If the ruling is revoked, I don't think
you need any court approval.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
I don't think so. However, this will need to be processed by the tax aithorities within the limitation
period for assessing the year of the transaction. Otherwise, the tax authorities may not be able to
assess the taxpayer contrary to the ruling.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Considering that the right to a ruling originates from an administrative procedure, I don't think there is
any specific legal defence. I would think that the rules governing administrative law may apply to
support a taxpayer's objection. Normally, the authorities will give the taxpayer written notice of an
intention to revoke an advance income tax ruling and the opportunity to make representations before
a decision is made. A revocation is effected by written notice to the taxpayer to whom the ruling was
issued.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Generally, when there is a material omission or misrepresentation in the statement of relevant facts or
proposed transactions submitted by the taxpayer, the ruling will be considered invalid and the
suthorities will not be bound by it. Therefore, the taxpayer can be assessed as if no ruling has been
given and is exposed to all tax measures (tax, interests, penalties). Where the ruling is issued
covering a continuing action or series of actions or where the transactions are not yet completed and
it is subsequently determined that the ruling is in error, it may be revoked. The revocation will not be
made retroactively but will apply only to those actions or transactions which take place after the date
of revocation. A ruling ceases to be valid if it was based on an interpretation of the law and that
interpretation was subsequently changed by the authorities as a result of a court decision. The ruling
will be considered binding upon the authorities only for the period prior to the date of the relevant
court decision. Also, if the law upon which a ruling was based is amended, the ruling ceases to be
valid from the effective date of the amendment. If an advance income tax ruling ceases to be valid in
the foregoing circumstances, the taxpayer will not be notified by the authorities. When an
interpretation has been changed by the authorities, the new interpretation will apply to all rulings
issued after the effective date of change in interpretation. This will be the case whether or not the
ruling request was received prior to the effective date of change in interpretation. Changes in
interpretation are announced publicly.
www.lexmundi.com
Page 21
© 2012 Lex Mundi
Contact Information
Jean Marc Gagnon
jean.gagnon@blakes.com
Blake, Cassels & Graydon LLP
600 de Maisonneuve Boulevard West
Suite 2200
Montréal, Québec H3A 3J2
Canada
Tel 1.514.982.4000 Fax 1.514.982.4099
www.blakes.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 22
© 2012 Lex Mundi
Tax Rulings
Cayman Islands
Prepared by Lex Mundi member firm Walkers
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
There is no direct taxation on residents of, or corporations established in, the Cayman Islands.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The Tax Information Authority is the competent authority in the Cayman Islands for international cooperation on matters involving the provision of tax related information. Website: www.tia.gov.ky
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Under the Freedom of Information Law, an applicant may request an internal review of the Tax
Information Authority's decision in some circumstances. If the applicant is dissatisfied with the
outcome of the internal review, he/she can appeal to the Information Commissioner of the Cayman
Islands.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
N/A.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
N/A.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
N/A.
www.lexmundi.com
Page 23
© 2012 Lex Mundi
Contact Information
Sarah Priaulx
Sarah.priaulx@walkersglobal.com
Walkers
Walker House
87 Mary Street
George Town, KY1-9001
Cayman Islands
Tel 1.345.949.0100 Fax 1.345.949.7886
www.walkersglobal.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 24
© 2012 Lex Mundi
Tax Rulings
China
Prepared by Lex Mundi member firm Jun He Law Offices
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
No, although informal discussions and non-binding understanding may take place.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Not applicable
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Not applicable
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Not applicable
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Not applicable
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Not applicable
Contact Information
DingFa “David” Liu
liddf@junhe.com
Jun He Law Offices
China Resources Building, 26th Floor
8 Jianguomenbei Avenue
Beijing, 100005
China
Tel 86.10.8519.1300 Fax 86.10.8519.1350
www.junhe.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 25
© 2012 Lex Mundi
Tax Rulings
Colombia
Brigard & Urrutia Abogados
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Colombian taxpayers have the constitutional and legal right to request rulings from the national tax
authority -Dirección de Impuestos y Aduanas Nacionales (DIAN). However, please note that these
rulings only bind the national tax authority and do not bind taxpayers. It is also important to bear in
mind that these rulings may never address a particular case; therefore they always refer to general
and abstract situations.
Going further, it is important to point out that pursuant to article 28 of Law 1427 of 2011, the general
rule is that rulings emitted by administrative entities do not bind the parties.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Tax rulings may address all tax issues as long as they never refer to particular cases. In Colombia,
tax rulings are not limited to certain topics.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings can be revoked by the national tax authority without prior authorization from a court.
However, all procedures undertaken by taxpayers in accordance to such rullings, before they are
revoked, may not be questioned by the national tax authority - DIAN as long as the ruling is not
declared as illegal. The Highest Supreme Administrative Court in Colombia (Consejo de Estado) may
revoke a tax ruling when it is contrary to Law or the Constitution. Nevertheless, for this to happen, it is
mandatory that legal action against the tax ruling considered illegal is filed before the Consejo de
Estado. It is important to keep in mind that if the tax ruling is manifestly contrary to Law or the
Constitution, the actor may request that its effects are temporarily suspended by the Consejo de
Estado until there is a final decision from it in the matter.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no deadline for the national tax authority to start a tax ruling revocation process.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
In order for a tax ruling to be revoked it is necesary that the national tax authority issues a new ruling
revoking the previous one. However, if the taxpayer believes that the new ruling is illegal or contrary
to the Law or the Constitution, he may file a legal action against such ruling before the Highest
Supreme Administrative Court in Colombia. Moreover, if the taxpayer considers that the new ruling is
manifestly contrary to the Law or the Constitution, he may request from the Consejo de Estado that
www.lexmundi.com
Page 26
© 2012 Lex Mundi
the effects of such decision are temporarily suspended for as long as there is a final ruling from the
Consejo de Estado in the matter.The final decision regarding both the temporarily suspension and
final revocation of the tax ruling needs to be taken by the Consejo de Estado.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
As stated in article 264 of Law 223 of 1995, all procedures undertaken by taxpayers in accordance to
a tax ruling and during its rule, may not be questioned by the national tax authority as long as the
ruling is not declared illegal. Hence, the revocation of a tax ruling takes effect only from the date of
the revocation and it is not retroactive.
Contact Information
Lucas Moreno Salazar
lmoreno@bu.com.co
Brigard & Urrutia Abogados
Calle 70 A # 4 - 41
Bogota,
Colombia
Tel 57.1.346.20.11 Fax 57.1.310.06.09
www.bu.com.co
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 27
© 2012 Lex Mundi
Tax Rulings
Cyprus
Prepared by Lex Mundi member firm Dr. K. Chrysostomides & Co LLC
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, taxpayers in Cyprus have a right to request a ruling from the Inland Revenue. It should be
stressed that the ruling does not constitute a decision, but merely an opinion based on the facts that
the Inland Revenue has before it. The right does not constitute a constitutional right or a right
conferred by law. No fees are charged for acquiring a ruling and it takes 2-4 weeks to receive the
ruling by the Inland Revenue.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
A tax ruling by the Inland Revenue can be obtained on any tax issue.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
As aforementioned, tax rulings are not decisions and they are not, therefore, definitive. It follows that
the issue of revocation does not arise.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
N/A
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
N/A
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
N/A
www.lexmundi.com
Page 28
© 2012 Lex Mundi
Contact Information
George Ioannou
info@chrysosotmides.com.cy
Dr. K. Chrysostomides & Co LLC
1, Lampousas Street
P.O. Box 22119
Nicosia, 1095
Cyprus
Tel 357.22.777000 Fax 357.22.779939
www.chrysostomides.com.cy
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 29
© 2012 Lex Mundi
Tax Rulings
Czech Republic
Prepared by Lex Mundi member firm PRK Partners
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
According to Czech tax legislation, there are very limited possibilities for taxpayers to request a ruling
from Czech tax authorities. These are granted by tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Issuance of tax rulings is limited to certain topics only as mentioned in Czech income tax legislation,
namely there exist a possibility to: a) negotiate special method of taxation for tax non-residents (legal
entities) having a permanent establishment in the Czech Republic b) ask Czech tax authorities to
issue a binding opinion on selected tax topics, e.g. on transfer pricing between related parties.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Binding opinions of tax authorities have a form of an official decision and are valid at the time of its
issuance. Generally, once issued in the form of a decision, they cannot be revoked.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
N/A
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
N/A
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
N/A
www.lexmundi.com
Page 30
© 2012 Lex Mundi
Contact Information
Jan Bürger
office@prkpartners.com
PRK Partners
Jáchymova 2
Prague, 110 00
Czech Republic
Tel 420.221.430.111 Fax 420.224.235.450
www.prkpartners.com/en/
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 31
© 2012 Lex Mundi
Tax Rulings
Denmark
Prepared by Lex Mundi member firm Kromann Reumert
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
According to the Danish Tax Administration Act (TAA) anyone can request a ruling from the tax
authorities regarding the fiscal consequences of an intended or already implemented disposition. The
request can relate to consequences for the person asking for the ruling or to consequences for
others. It is a condition that the Tax Administration ("SKAT") is competent to decide on the issue in
question. Frequently, the Tax Administration will issue the ruling but in situations where the question
is of particular importance the ruling is issued by the National Tax Board ("Skatterådet"). This is the
case when 1) the ruling will have consequences for several taxpayers; 2) the ruling concerns bigger
economic value; 3) the ruling concerns the interpretation of new legislation; 4) the ruling involves
questions of EU-law; or 5) the case is of public interests. Even if the question does not fall within the
above categories, the Tax Administration can chose to refer the ruling application to the Tax Board. A
tax ruling is an expression of the opinion of the Tax Administration or the Tax Board, as applicable,
and is binding on the authorities but not on the taxpayer. The taxpayer can appeal the ruling if the
taxpayer disagrees. The Tax Administration may appeal a ruling on EU law issues. A ruling is
normally binding on the Tax Administration for 5 years, but a shorter period may be laid down in the
ruling.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Tax rulings can only be requested on the fiscal effects of a disposition. This means that tax rulings
are not available on actual administration of the rules, fees and payment of interests, collection of
taxes, penalties or the exercise of control. Apart from the above, tax rulings can be obtained on most
tax issues. However, exceptions are made in relation to the fiscal effects of customs legislation and to
the fiscal effects of assessments on property. Furthermore, rulings cannot be obtained on questions
regarding authorizations or dispensations. In exceptional cases, where a question cannot be
answered with sufficient certainty or where the relevant facts are not sufficiently clear, a ruling
application may be rejected.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The TAA states that a tax ruling is not binding if decisive preconditions for the ruling change or if laws
on which the ruling is based are changed. Similarly, if the ruling turns out to be contrary to EU-law it is
not binding. It is the taxpayer's responsibility to provide the full factual information on which the ruling
is made and rulings based on incomplete facts are not binding. The annulment of a tax ruling can only
be made for the future. In situations where the annulment is caused by changes in law the taxpayer
will not be given any warning concerning the annulment. Where the annulment is caused by changes
in case law the Tax Administration will announce the new case law and declare from what point in
time the new case law will have effect. Such change in case law means that all affected tax rulings
are annulled for the future. Usually, the taxpayer is given a notice of 6 month.
www.lexmundi.com
Page 32
© 2012 Lex Mundi
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
To the extent the tax authorities can revoke/annul a tax ruling as set out above, there is no time limit
for doing so.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The taxpayer can appeal a tax ruling and the taxpayer can also appeal the Tax Administration's
decision to revoke a tax ruling. Complaint has to be made within a period of 3 months after receiving
the ruling or the decision to revoke the ruling. Complaints are made to an appeal board or the Danish
National Tax Tribunal. After this the taxpayer can have the ruling tried before the national courts.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
As described above, a revocation of a tax ruling will usually only have effects for the future. However,
a revocation of a tax ruling can be given retrospective effects in cases where the taxpayer can be
blamed for the revocation.
Contact Information
Arne Mollin Ottosen
ao@kromannreumert.com
Kromann Reumert
Sundkrogsgade 5
Copenhagen, 2100
Denmark
Tel 45.70.12.12.11 Fax 45.70.12.13.11
www.kromannreumert.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 33
© 2012 Lex Mundi
Tax Rulings
Dominican Republic
Prepared by Lex Mundi member firm Pellerano & Herrera
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
In the Dominican Republic, taxpayers have the right to obtain a binding opinion from the Tax
Authorities regarding the application of the Dominican Tax Code in any specific situation. This
process consists in submitting a letter where the case is thoroughly described and the opinion from
the Tax Administration is required in order to proceed. This right is granted by Article 38 of the
Dominican Tax Code, which establishes: “The Tax Administration may be consulted about the
application of this Tax Code by those taxpayers who have a direct and personal interest”.
On that same note, when a taxpayer considers incorrect or unfair the valuation or calculations of its
tax obligations made by the Tax Administration they are able to interpose a reconsideration request
under Article 57 of the Dominican Tax Code, which is done by submitting a written letter within the
next twenty (20) days after the valuation was completed.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
These binding opinions can be obtained on any type of operation that falls under the scope of
application of the Dominican Tax Code.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
These opinions are definitive and only binding for the interested taxpayer(s). The Tax Administration
may later change its criteria with regards to the consulted situation without the need of an
authorization from a tax court.
In case of an adverse tax ruling, if the reconsideration request is denied by the Tax Administration, a
decision from the appertaining Administrative and Tax Court will be necessary.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
In order for the Tax Administration to revoke a certain ruling and therefore change its criteria, a
General Rule must be published in accordance to Article 37 of the Dominican Tax Code. This
General Rule will be enforceable and of mandatory compliance from the moment it is published in a
national newspaper, not being retroactive unless it benefits a taxpayer in an individual and direct
manner.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
In case the Tax Administration revokes a General Rule by means of publication of a new one, the
taxpayer affected by it can interpose a reconsideration request to the Tax Administration regarding
www.lexmundi.com
Page 34
© 2012 Lex Mundi
the application of the General Rule. If the response is not suitable or furthermore illegally severs the
taxpayer’s rights or interests, an appeal before the appertaining Administrative and Tax Court will
proceed. This appeal will have to be based on the fact that the General Rule violates the Dominican
Constitution or goes against our current laws.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Under the dispositions of Article 37 of the Dominican Tax Code, a new General Rule takes effect from
the date of its publication and will only have a retroactive effect when it affects a taxpayer in a positive
manner.
Contact Information
Milciades Rodrigues
m.rodriguez@phlaw.com
Juan Moreno
j.moreno@phlaw.com
Pellerano & Herrera
Av. John F. Kennedy #10
Santo Domingo,
Dominican Republic
Tel 1.809.541.5200 Fax 1.809.567.0773
www.phlaw.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 35
© 2012 Lex Mundi
Tax Rulings
Egypt
Prepared by Lex Mundi member firm Shalakany Law Office
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, tax authorities may issue ruling or decision in respect of requests submitted in the form of
challenges regarding certain tax issues. The methods for carrying out such challenges and the
procedures regarding tax ruling are set out under Egyptian Tax law provisions. Please refer to our
answers below for more clarifications.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
In relation to the above mentioned tax ruling, its issued in cases where the tax is assessed by the
administration.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
In cases where the tax is assessed by the administration, the tax district office shall record in a
special book the appeal data and summary of the aspects of the dispute. The tax district office shall
adjudicate on the aspects of the dispute between itself and the taxpayers by means of an internal
committee in it within sixty days of submitting the appeal. If a settlement of the aspects of the dispute
is not reached, the tax district office shall notify the tax payer accordingly, and shall refer the aspects
of the disputes to the concerned appeal committee within thirty days from the date of adjudicating on
those aspects. The administration and taxpayers may challenge the committee’s decision before the
court of first instance, which is held by a commercial panel within thirty days from the date of
announcing the decision. Moreover, challenging the judgment passes by this court shall be through
appeal action, whatever the disputable amount involved is.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Please refer to answer of No.3.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Please refer to answer of No.3.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
If it became final (i.e. not subject to any challenges under applicable Tax law ) and when it is
rendered in favor of tax payer, the later shall be entitled to reclaim any amounts of money paid under
any revoked tax assumptions.
www.lexmundi.com
Page 36
© 2012 Lex Mundi
Contact Information
Mohamed Youssef Kamal
Mohamed.kamal@shalakany.com
Shalakany Law Office
12 El Marashly Street
Cairo, 11211
Egypt
Tel 202.272.88.888 Fax 202.273.70.661
www.shalakany.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 37
© 2012 Lex Mundi
Tax Rulings
Estonia
Prepared by Lex Mundi member firm LAWIN
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, taxpayers have the right to request a preliminary binding ruling from the Estonian Tax and
Customs Board. The said right is granted by tax law (and is not mentioned in the constitutional law).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Preliminary binding rulings can be obtained on every tax issue, except for transfer pricing related
issues (i.e. issues related to deternining the value of a transaction concluded between related
parties).
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Generally, preliminary tax rulings are definitive and binding and, therefore, cannot be revoked by tax
authorities, although obvious typing and calculation mistakes may be amended also after the
issuance of the ruling. Please note, however, that a preliminary ruling is binding for the tax authority
only provided that: 1) taxpayer's act was performed during the term specified in the preliminary ruling;
2) the performed act conforms to the description provided in the preliminary ruling in all
circumstances significant in terms of taxation; 3) the legal provisions relevant for taxation purposes
have not been substantially amended before performance of the act. If at least one of the above
conditions is not met, a ruling shall be deemed to have lost its binding force. Please note, however,
that upon loss of the binding force under any of the above listed circumstances the ruling cannot be
expressly revoked by the tax authority. A preliminary ruling is also not binding for the tax authority if
its is made by fraudulent means or threats or by influencing the tax authority in any other unlawful
manner is. In such a case (differently from the cicusmtanes discussed above) the tax authority shall
declare a preliminary decision invalid. No authorisation of a tax court (Administrative Court in Estonia)
is required.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The are not specific deadlines or procedures provided with respect of the revocation process in
Estonia.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
There is no special defense provided for in the tax law for such occasions. According to the general
rule contesting of the revocation of a tax ruling (please see p 3 for situations where a tax ruling can be
revoked in Estonia) should be possible in the ordinary administrative proceeding (in administrative
court), though.
www.lexmundi.com
Page 38
© 2012 Lex Mundi
Please note, however, that Estonian tax law contains a provision under which the taxpayer does not
have a right to contest the preliminary ruling if he/she disagrees with it. Therefore, an interpretation is
possible, according to which contesting by the taxpayer of the revocation of the tax ruling also falls
under this rule, i.e. such contesting shall not be allowed. Due to the lack of practice it is not possible
to provide a final standpoint in this question.
Please be informed also, that as the preliminary ruling is not binding for the taxpayer, and he/she is
free to ignore the ruling as well as its revocation, the dispute on the accuracy of the revocation of the
tax ruling may arise in the administrative court in connection with taxpayer’s liability.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Revocation of a tax ruling (please see p 3 for situations where a tax ruling can be revoked) in Estonia
has a retroactive effect with resulting liability for the taxpayer (interest in the amount of 0,06% per
each day of delay), i.e. the liability arises from the moment of the emergence of a tax obligation, but
not from the moment of revocation of the tax ruling.
Contact Information
Dmitri Rozenblat
dmitri.rozenblat@lawin.ee
LAWIN
Niguliste 4
Tallinn, 10130
Estonia
Tel 372.630.6460 Fax 372.630.6463
www.lawin.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 39
© 2012 Lex Mundi
Tax Rulings
Finland
Prepared by Lex Mundi member firm Roschier, Attorneys Ltd.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. Advance rulings Tax payers can apply for advance rulings from the Central Tax Board. The right
to apply for an advance ruling is granted under section 84 of the Tax Procedure Act (the “TPA”) and
the Tax Administration Act (the “TAA”). Further, all tax offices, including the Tax Office of Major
Corporations, issue advance rulings (TPA, section 85). Appeals Unless a case has already been
decided on appeal, a tax payer which is dissatisfied with a final tax assessment may appeal to the
Board of Adjustment (TPA, section 62). Boards of Adjustment are located in every tax office. A
decision of the Board of Adjustment may be appealed to an administrative court (TPA, section 66),
which is an administrative tribunal of first instance. The tax payer and the Tax Recipients’ Legal
Services Unit can, under certain conditions, appeal the decisions of the administrative court to the
Supreme Administrative Court (TPA, section 70). Further, an extraordinary appeal route may
exceptionally be available (e.g. when an ordinary appeal has not been possible due to the sickness of
the tax payer or there has been a material mistake in the final decision of a court), even though an
ordinary appeal is no longer possible.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Advance rulings Tax payers can apply for advance rulings from the Central Tax Board on issues
involving income tax, value added tax, taxation of non-residents, withholding tax on interest or
insurance tax. Rulings are issued on matters that are considered to be important and that may set a
precedent, and those of significant economic value to the tax payer (TAA, section 14). Tax offices
issue advance rulings on issues involving e.g. income tax, value added tax, taxation of non-residents,
withholding tax on interest, insurance tax, transfer tax and real estate tax. The most important
difference between the advance ruling from the tax office and that of the Central Tax Board is that
only the tax office is permitted to rule on valuation matters. Appeals Any decision of the Board of
Adjustment may be appealed to an administrative court (TPA, section 66). The decision of an
administrative court may be appealed if the Su-preme Administrative Court grants permission (TPA,
section 70). Further, an extraordinary appeal route may exceptionally be available (e.g. when an
ordinary appeal has not been possible due to the sickness of the tax payer or there has been a
material mistake in the final decision of a court), even though an ordinary appeal is no longer
possible.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Advance rulings Decisions of the Central Tax Board are binding on the tax administration, but not on
the tax payer (TAA, section 14). The tax payer can freely choose whether it demands the tax
authorities to apply the ruling. In order for the ruling to be binding there is a requirement that all
relevant facts relating to the transaction have been disclosed. Both the Tax Recipients’ Legal
Services Unit and the tax payer can appeal an advance ruling from the Central Tax Board to the
Supreme Administrative Court (TAA, section 16). An advance ruling relating to income tax by the
local tax office cannot be appealed. However, the taxation as such can be appealed against after the
www.lexmundi.com
Page 40
© 2012 Lex Mundi
final tax assessment has been completed (TPA, section 85). Other advance rulings by the local tax
office can be appealed to an administrative court. Appeals Any decision of the Board of Adjustment
may be appealed to an administrative court (TPA, section 66). The decision of an administrative court
may be appealed if the Su-preme Administrative Court grants permission, i.e. if: the review is
important in view of other similar cases or for uniform application of law; there is an apparent mistake
in the decision; or exceptionally important economic or other reasons are involved (TPA, section 70).
Further, an extraordinary appeal route may exceptionally be available (e.g. when an ordinary appeal
has not been possible due to the sickness of the tax payer or there has been a material mistake in the
final decision of a court), even though an ordinary appeal is no longer possible.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Advance rulings The Tax Recipients’ Legal Services Unit and the tax payer can appeal against an
advance ruling from the Central Tax Board to the Supreme Administrative Court (TAA, section 16).
The appeal has to be submitted within 30 days from receiving the decision (TAA, section 17). Before
the tax payer is provided with an advance ruling from the tax office, the tax office is required to
acquire the Tax Recipients’ Legal Services Unit’s notification on whether they will use their right to
appeal against the taxation assessed as set out in the advance ruling. The notification has to be
acquired and provided without delay (TPA, section 85). In case the Tax Recipients’ Legal Services
Unit has notified that they shall not appeal against the tax assessment, they do not have the right to
appeal, unless the advance ruling application is based on wrongful or insufficient information (TPA,
section 62). Assessment correction by the tax administration Ordinary assessments must generally
be completed by the end of October in the calendar year following the tax payer’s tax year. If the
assessment is incorrect, it can be corrected by the tax office, provided that certain prerequisites are
met (TPA, section 54). Any correction which is detrimental to the tax payer must be made, depending
on the prerequisites in the law: within 1 year (unless the matter is unclear or gives room for
interpretation); 2 years (misspelling, calculation error or the taxation has been based on wrongful or
insufficient information); or 5 years (serious violations in tax compliance reporting) (TPA, section 56).
Corrections which are favorable to the tax payer must be made within 5 years from the beginning of
the year immediately following the end of the assessment year (TPA, section 55). Appeals An appeal
by the tax payer to the Board of Adjustment must be filed within 5 years from the beginning of the
year immediately following the end of the assessment year, or in certain cases within 60 days from
receiving a decision on an assessment correction. An appeal by the Tax Recipients’ Legal Services
Unit must be filed within 1 year from the beginning of the year immediately following the end of the
assessment year, or in certain cases within 60 days as of a decision on an assessment correction
(TPA, section 64).
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Advance rulings Both the Tax Recipients’ Legal Services Unit and the tax payer can appeal an
advance ruling from the Central Tax Board to the Supreme Administrative Court (TAA, section 16).
An advance ruling relating to income tax by the local tax office cannot be appealed. However, the
taxation as such can be appealed against after the final tax assessment has been completed (TPA,
section 85). Other advance rulings by the local tax office can be appealed to an administrative court.
Appeals Any decision of the Board of Adjustment may be appealed to an administrative court (TPA,
section 66). The decision of an administrative court may be appealed if the Su-preme Administrative
Court grants permission (TPA, section 70). Further, an extraordinary appeal route may exceptionally
be available (e.g. when an ordinary appeal has not been possible due to the sickness of the tax payer
or there has been a material mistake in the final decision of a court), even though an ordinary appeal
is no longer possible.
www.lexmundi.com
Page 41
© 2012 Lex Mundi
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Principle amount The principle amount can become payable retroactively based on a revocation of an
advance ruling or an appeal of the ordinary assessment. Interest and tax increase Interest is payable
retroactively on taxes imposed due to a revocation (TPA, sections 40, 43 and 77). In case the
revocation leads to a tax refund, the tax payer is entitled to interest on the refunded amount. In case
the revocation is due to serious violations by the tax payer, also a tax increase may be added in
accordance with the Act on tax increases and interest on late payments. Protection of trust In some
cases, a bona fide tax payer may be able to benefit from the protection of trust with regard to the
taxation of previous years (as set out in the TPA, section 26), i.e. interest and penalties may be
mitigated.
Contact Information
Jonathan Rosengren
jonathan.rosengren@roschier.com
Roschier, Attorneys Ltd.
Keskuskatu 7 A
Helsinki, 00100
Finland
Tel 358.20.506.6000 Fax 358.20.506.6100
www.roschier.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 42
© 2012 Lex Mundi
Tax Rulings
Germany
Prepared by Lex Mundi member firm Noerr LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
In Germany, taxpayers have the right to request a ruling from the tax authorities provided the ruling is
intended to receive clearance with regard to a legal question. Nonetheless, the issuance of a ruling is
up to the tax authority’s discretion. The right to request a ruling is granted under the provision of the
tax law (i.e. Sec. 89 German Fiscal Code).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
German tax law differs generally between rulings considering the tax procedure provisions and
rulings considering the substantive tax provisions. The issuance is – for both matters – generally not
limited to certain topics but the taxpayer has to claim a special interest in obtaining the ruling (e.g.
relevant future tax effects on a business activity) as far as rulings on substantive tax provisions are
concerned. The request of a ruling is charged with a fee irrespective of whether the tax authorities
finally issue the ruling. The fee is determined according to the value the requested ruling has for the
tax payer whereby the minimum amount is EUR 121 and the maximum amount is EUR 91,456.
Further, regarding international transfer prices Advance Pricing Agreement (“APA”) are possible. The
application for an APA procedure has to be filed with the Federal Tax Office and not with the tax
office competent for the taxation of the company.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings can be revoked by tax authorities under certain circumstances whereby the German tax
law does especially differ between the revocation of a lawful and an unlawful ruling. No tax court
authorization is required for a revocation.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is a deadline of 1 year after the tax authorities get known of the facts that justify a revocation.
As far as the process of revocation is concerned, the tax authorities are required to hear the taxpayer
which obtained the ruling to be revoked before the actual revocation. Apart from that there are no
special provisions for the revocation process. The revocation can – depending on circumstances – be
completed within a few days if necessary.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
German tax law provides the same legal defense against a revocation of a ruling as it does against all
other legal acts of the tax authorities. The first legal defense is the objection (“Einspruch”) which must
www.lexmundi.com
Page 43
© 2012 Lex Mundi
be filed in with the tax authority which issued the revocation. The tax authority itself will then decide
whether to revoke the revocation or to reject the objection against the revocation. The objection does
not have any inhibitive effects on the current taxation. If the objection against the revocation is
rejected by the tax authorities, the taxpayers can make an appeal to a tax court.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
As mentioned before German tax law does differ between the revocation of a lawful or an unlawful
ruling. While lawful rulings which can in general be revoked under much stricter provisions than
unlawful rulings can be revoked only with future effect, unlawful rulings can also be revoked with
retroactive effect. Nevertheless the retroactive revocation of an unlawful ruling does not lead to a
retroactive liability (i.e. no interest liability for the past) unless the ruling was obtained in an attempt of
tax evasion.
Contact Information
Michaela Engel
Michaela.engel@noerr.com
Noerr LLP
Brienner Straße 28
Munich, 80333
Germany
Tel 49.89.28628.0 Fax 49.89.280110
www.noerr.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 44
© 2012 Lex Mundi
Tax Rulings
Greece
Prepared by Lex Mundi member firm Zepos & Yannopoulos
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers have the right to request the issuance of rulings (individual responses) from the tax
authorities. Such right is not explicitly provided in the Constitution of Greece nor is it granted by tax
law. However, such right should be related to the constitutional provision of article 10 par.1 which
entitles every person to file a petition in writing, towards public authorities.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The issuance of tax rulings is not limited to certain topics and can be obtained on every tax issue.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings are not definitive and can be revoked by the tax authorities, although rarely in practice. A
court authorization is not required in this respect. Furthermore, a tax ruling does not prevent tax
authorities from adopting a different view on a future similar tax case. In fact, a tax ruling is adressed
to a specific taxpayer (i.e. the taxpayer submitting the relevant question to the competent authority)
and in principle applies only in relation to the specific facts set out in such question. Although in
practice tax auditing authorities are usually in line with relevant rulings adressed to specific taxpayers,
they are not bound to do so. Therefore, in principle they are entitled to adopt a different approach on
the same matter in the course of a tax audit. However, tax auditing authorities are not entitled to
impose any penalties on the taxpayer, who has complied with the instructions of a ruling specifically
adressed to him.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no official tax ruling revocation process in Greece.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The taxpayer has no legal defense against a tax authority attempt to revoke a tax ruling. However, if
the tax auditors adopt a different treatment from the one provided in the tax ruling, the taxpayer can
appeal against the tax assessment that will arise from such different treatment.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The revocation of a tax ruling may result to a retroactive tax liability for the taxpayer with respect to
the principal amount due. However, the tax law provides that no additional taxes and penalties are
www.lexmundi.com
Page 45
© 2012 Lex Mundi
levied in case the taxpayer has relied on a tax ruling in order to determine his tax liability. It should be
noted though that, in case the tax assessment was based on an irrevocable decision of the Greek
Supreme Court, additional taxes will be imposed by the tax authorities despite the existence of a tax
ruling.
Contact Information
Costas Kallideris
c.kallideris@zeya.com
Elina Filippou
e.filippou@zeya.com
Zepos & Yannopoulos
75 Katehaki & Kifissias Ave.
Athens, 115 25
Greece
Tel 30.210.6967000 Fax 30.210.6994640
www.zeya.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 46
© 2012 Lex Mundi
Tax Rulings
Grenada
Prepared by Lex Mundi member firm Grant, Joseph & Co.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, they do. It is a right guaranteed by the tax law and the constitution.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Limited to certain topics.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The rulings are definitive, but can be appealed to the civil high courts, which have jurisdiction over the
tax authorities.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Tax authorities are not able to revoke their rulings. The rulings are appealable, however. A tax payer
can appeal to the tax appeal tribunal; if dissatisfied with its ruling, he can appeal to the civil high court.
The time frames vary based on the type of tax under consideration.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
N/A
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
An appeal which over rules a ruling by the tax authorities takes effect from the date of the original
ruling and so is retroactive in effect.
www.lexmundi.com
Page 47
© 2012 Lex Mundi
Contact Information
Dickon
grantjo@spiceisle.com
Grant, Joseph & Co.
Lucas Street
St. George's,
Grenada
Tel 1.473.440.3459 Fax 1.473.440.6605
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 48
© 2012 Lex Mundi
Tax Rulings
Guatemala
Prepared by Lex Mundi member firm Mayora & Mayora, S.C.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, the taxpayer has the right to request a ruling from the tax authorities; this right is granted by tax
law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
A tax ruling can be obtained on every tax issue.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Is a tax court authorization required to do so? Tax rulings can be revoked by tax authorities, at the
request of the interested party after proving its right. There is no need of a tax court authorization.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
1. The tax payer or interested party presents the memorandum to the official that issued the
resolution; within ten working days from the date last notification was received. If the
memorandum is not presented during this period then the ruling becomes definitive.
2. The official that receives the memorandum either accepts or reject the procedure.
a)
If the official accepts the procedure he can only transfer it (he can not decide its content)
to the Tax Authority Directory, within five working days.
b)
If the official rejects the process he must reason his decision.
3. The Tax Authority Directory decides confirming, modifying, revoking or annulling the decision
subject to the revocation process, within 30 working days from the date the procedure was
transfer to it.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Yes, the tax payer has legal defenses against a tax authority attempting to revoke the ruling; such
legal defenses would vary according to the action established by the tax authority.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The revocation is retroactive resulting in liability for the taxpayer since the moment he failed to comply
with its tax obligation, which will amount to owing interests and penalties.
www.lexmundi.com
Page 49
© 2012 Lex Mundi
Contact Information
Concepcion Villeda W.
mcvilleda@mayora-mayora.com
Mayora & Mayora, S.C.
15 Calle 1-04 Zona 10, Edificio Céntrica Plaza
3 Nivel, Oficina 301
Guatemala City, 01010
Guatemala
Tel 502.222.368.68 Fax 502.236.625.40
www.mayora-mayora.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 50
© 2012 Lex Mundi
Tax Rulings
Hong Kong
Prepared by Lex Mundi member firm Deacons
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers have a right to apply for a ruling from the Hong Kong Inland Revenue Department (“IRD”)
pursuant to section 88A of the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)
(“IRO”). However, the Commissioner of Inland Revenue (“Commissioner”) is not obliged to issue a
ruling. The Commissioner may decline to make a ruling and notify the applicant in writing of his
decision and the reasons therefor. The Commissioner will not make a ruling if: (a) The Commissioner
considers that the arrangement in relation to which the ruling is sought is not seriously contemplated
by the applicant; (b) The application is frivolous or vexatious; (c) The Commissioner is undertaking an
audit on how any provision of the IRO applies to the applicant, or to an arrangement similar to the
arrangement which is the subject of the application, during any period for which the proposed ruling
would apply were the ruling to be made; (d) The Commissioner considers that the applicant has not
provided sufficient information in relation to the application; or (e) The Commissioner considers that it
would be unreasonable to make a ruling in view of the resources available to the Commissioner. An
application for a ruling on the following will generally be declined: (a) The matter on which the ruling is
sought is the same in character as a completed transaction entered into by the applicant in an earlier
year and the tax effect of that earlier transaction is the subject of discussions with the applicant or is
subject to an objection or appeal, whether in relation to the applicant or any other person; (b) The
central issue concerns a matter that is before a board, a tribunal or the courts or, if a judgment has
been issued, an appeal is under consideration; (c) The request contains alternative courses of action
on the part of the applicant; (d) The matter is primarily one of fact and the circumstances are such
that all the pertinent facts cannot be established at the time of the request for the ruling; (e) The ruling
requires an opinion as to generally accepted accounting principles or commercial practices; or (f) The
issue involves the interpretation of a foreign law. The Commissioner may also decline to make a
ruling if: (a) The application seeking the ruling would require the Commissioner to determine or
establish any question of fact; (b) The Commissioner considers that the correctness of the ruling
would depend on the making of assumptions, whether in respect of a future event or any other
matter; (c) The matter on which the ruling is sought is subject to an objection or appeal, whether in
relation to the applicant or any other person; or (d) The matter on which the ruling is sought is the
subject of a tax return which has been or is due to be lodged under the IRO.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
A ruling may be made on how any provision of the IRO applies to the applicant or to the arrangement
described in the application. A ruling will not be made on the following issues:- (a) Application of any
provision of the IRO relating to the imposition or remission of a penalty; (b) The correctness of a tax
return or other information supplied by any person; (c) The prosecution of any person; (d) The
recovery of any debt owing by any person.
www.lexmundi.com
Page 51
© 2012 Lex Mundi
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The Commissioner may at any time withdraw a ruling by notifying the person to whom the ruling
applies in writing of the withdrawal and the reasons therefor. A court authorisation is not required. A
ruling will also cease to apply if the relevant provision of the IRO is repealed or amended: (a) If any
provision of the IRO that is the subject of or affects a ruling is repealed, the ruling will cease to apply
to the extent of, and from the effective date of, that repeal. (b) If any provision of the IRO that is the
subject of a ruling is amended, or repealed in part only, so that the way in which the provision applies
is altered, the ruling will cease to apply to the extent of, and from the effective date of, the
amendment or partial repeal. (c) If an interpretation of the law on which the ruling was based is
changed by the IRD as a result of a court decision, the ruling will cease to apply to the extent of, and
from the date of, the court decision.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The IRD does not have a deadline to start a tax ruling revocation process. The Commissioner may at
any time withdraw a ruling by notifying the person to whom the ruling applies in writing of the
withdrawal and the reasons therefor.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The taxpayer does not have any legal defence against the IRD notifying him or it of the cessation of
the application of a ruling.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
If the Commissioner withdraws a ruling made in respect of an arrangement: (a) The ruling will cease
to apply in relation to the arrangement if the arrangement is entered into or effected after the date of
the withdrawal; (b) If the arrangement has been entered into or effected on or before the date of the
withdrawal: (i) Where the person to whom the ruling applies has pursuant to the IRO disclosed in the
tax return provided under the IRO that he has relied on the ruling in preparing and providing the tax
return, the ruling will after the date of the withdrawal continue to apply in relation to the arrangement
for the remainder of the period specified in the ruling; (ii) In any other case, the ruling will cease to
apply in relation to the arrangement.
Contact Information
James Bertram
james.bertram@deacons.com.hk
Sally Ip
hongkong@deacons.com.hk
Deacons
Alexandra House 5th Floor
18 Chater Road
Central,
Hong Kong
Tel 852.2825.9211 Fax 852.2810.0431
www.deacons.com.hk
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 52
© 2012 Lex Mundi
Tax Rulings
Iceland
Prepared by Lex Mundi member firm LOGOS legal services
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Icelandic tax payers have a right to request a ruling from the tax authorities, this right is granted by
tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
There is no limitation as regards topics, but there is a requirement of the tax event being inquired
about not having occured yet.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Icelandic tax rulings are definitive unless there will be a change in law or the facts governing the
taxable event.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The only way to revoke a ruling would be on the basis of law having changed and/or the facts having
changed. The defense against that would have to be based on exactly the opposite, i.e. on law and
facts not having changed at all or only in a manner not affecting the grounds for the ruling.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
This is unclear as there is no precedent of this having happened in Iceland. Generally it can be
expected that if facts were misrepresented in the ruling application then the revocation has retroactive
effect. If law changes the Icelandic constitution prohibits retroactive affect.
www.lexmundi.com
Page 53
© 2012 Lex Mundi
Contact Information
Jon Elvar Gudmundsson
jonelvar@logos.is
LOGOS legal services
Efstaleiti 5
Reykjavik, IS-103
Iceland
Tel 354.540.0300 Fax 354.540.0301
www.logos.is
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 54
© 2012 Lex Mundi
Tax Rulings
India
Prepared by Lex Mundi member firm Amarchand & Mangaldas & Suresh A. Shoroff &
Co.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Under the scheme of the Income Tax Act, 1961 (‘Act’), the taxpayers do have a right to request a
ruling from the Indian income tax authorities. However, only the following category of taxpayers can
apply for an advance tax ruling before the Authority for Advance Ruling in India:



A non resident in relation to a transaction which has been undertaken or is proposed to be
undertaken by him; or
A resident in relation to the tax liability of such non-resident arising out of a transaction which has
been undertaken or is proposed to be undertaken by a resident applicant with a non-resident; or
A resident falling within any such class or category of persons as the Central Government may,
by notification in the Official Gazette, specify in this behalf; for instance public sector companies
(public sector company means a corporation established by or under any Central, State or
Provincial Act or a Government company).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
An advance ruling can only be obtained in respect of the following transactions:



A determination in relation to a transaction which has been undertaken or is proposed to be
undertaken by a non resident applicant; or
A determination in relation to the tax liability of such non-resident arising out of a transaction
which has been undertaken or is proposed to be undertaken by a resident applicant with a nonresident; or
A determination or decision in respect of an issue relating to computation of total income which is
pending before any income-tax authority or the Appellate Tribunal and such determination or
decision shall include the determination or decision of any question of law or of fact relating to
such computation of total income specified in the application
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The advance ruling pronounced by the Authority for Advance Ruling shall be binding only in the
following cases:
 on the applicant who had sought it; and
 in respect of the transaction in relation to which the ruling had been sought; and
 on the specified income-tax authorities (and the subordinates), in respect of the applicant and
the said transaction.
It would be worthwhile to note that such advance ruling shall be binding as aforesaid unless there is a
change in law or facts on the basis of which the advance ruling has been pronounced.
www.lexmundi.com
Page 55
© 2012 Lex Mundi
Further, in a scenario, where the Authority for Advance Ruling finds, that an advance ruling
pronounced by it has been obtained by the applicant by fraud or misrepresentation of facts, it may, by
order, declare such ruling to be void ab initio and accordingly, subsequent to such revocation the
normal provisions of the Act shall apply (after excluding the period beginning with the date of such
advance ruling and ending with the date of order under this sub-section) to the applicant as if such
advance ruling had never been made.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Under the Act, there is no timeline prescribed to initiate the proceedings for revocation of a ruling.
Where the ruling has been obtained by the applicant by fraud or misrepresentation of facts, the
Authority for Advance Ruling may by way of order, declare the ruling to be void ab initio (after
excluding the period beginning with the date of such advance ruling and ending with the date of
order).
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Amongst others, the legal defense available to the taxpayer would be to prove that there was no misrepresentation or fraud on his part and he had disclosed all material facts fully and truly.
Once a bonafide has been established, the Authority for Advance Ruling cannot revoke the ruling
under the scheme of the Act.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Revocation would render the ruling to be void ab initio (after excluding the period beginning with the
date of such advance ruling and ending with the date of order), as if such advance ruling had never
been made.
However, the interest on the tax due, if any would continue to be in effect and shall be levied from the
date on which the tax is due to the date the tax is actually paid.
Contact Information
Amarchand & Mangaldas & Suresh A. Shoroff &
Co.
Amarchand Towers
216, Okhla Industrial Estate, Phase-III
New Delhi, 110 020
India
Tel 91.11.2692.0500 Fax 91.11.2692.4900
No website available (not permitted under Indian
regulations.)
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 56
© 2012 Lex Mundi
Tax Rulings
Ireland
Prepared by Lex Mundi member firm Arthur Cox
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
There are no "rulings" available in Ireland, however, the Irish tax authorities do on occassion give
advance opinions. These are available either (in a small number of cases) as a matter of tax law or
(more commonly) by practice. For example, in the case of certain reliefs, it is necessary to apply in
advance to Revenue, whereas for other types of transaction, say large re-organisations, the Revenue
will issue advance opinions on request.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Under tax law, advance opinions may only be obtained on certain topics. As a matter of practice,
advance opinions can be sought in respect of any tax issue. However, as the Irish Revenue would
have limited resources, they would actively discourage issuing any form of clarification in respect of
routine matters. Likewise they will not opine on a matter where anti avoidance is concerned. There is
another more generic system where a request for clarification on the interpretation of legislation can
be submitted to Revenue, but the response time for that system can be a number of weeks, so it is
rarely used by advisors.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The nature of a Revenue opinion is that it is not definitive, and can be revoked. Revenue would
however rarely do so, especially where they are aware that a tax payer has implemented a
transaction on foot of a Revenue opinion. Even if not revoked, the Revenue opinion should not be
relied upon unless full disclosure has been made to the Revenue in the request.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no deadline for the Revenue opinion process. However, for large transactions, a response
will usually be available within 2-4 weeks. For smaller transaction, it can take longer.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
A tax payer could raise the defences of estoppel and legistimate expectation. The basis of both
defenses being that the Revenue in issuing the opinion would have known or ought to have known
that the tax payer would be relying on the opinion, and had therefore a legitimate right to expect that
the tax treatment would be as set out in the Revenue opinion. In response to such defenses, the
Revenue might argue that as a matter of public policy it is necessary to revoke the opinion.
Alternatively, they might suggest that full disclosure had not been made to Revenue.
www.lexmundi.com
Page 57
© 2012 Lex Mundi
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
There is no set formula for the effect of a revocation of a Revenue ruling. Typically if Revenue wished
to change their position on a matter, this would be done by making some form of public statement
that all transactions done after a certain date would cease to benefit from a certain type of treatmenrt,
thus completed transactions would be grandfathered. However, if they were (which would be very
unusual) to withdraw an opinion after a tax payer had relied upon it to effect a transaction, (and
assuming the withdrawl was upheld) it would be most difficul for them to seek interest and penalties in
addition to the tax, and indeed most likely they would not be successful in seeking to levy interest and
penalties in those circumstances. The more usual course of action is to prevent future transactions
and not to alter the treatment of existing transactions in any event.
Contact Information
Caroline Devlin
Caroline.devlin@arthurcox.com
Arthur Cox
Earlsfort Centre
Earlsfort Terrace
Dublin, 2
Ireland
Tel 353.1.618.0000 Fax 353.1.618.0618
www.arthurcox.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 58
© 2012 Lex Mundi
Tax Rulings
Isle of Man
Prepared by Lex Mundi member firm Cains
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
There is no actual right to a tax ruling from the Assessor of Income Tax. In general, the Assessor
does not give binding advance rulings on the manner in which any given transaction will be treated for
tax purposes. However, the Assessor is prepared to take part in informal discussions regarding
proposed transactions and to give non-binding indications of the tax treatment which he is likely to
apply. There are two areas where application to the Assessor for discussion is more likely. One is
with regard to transfers to and from pension schemes, where clearance from the Assessor is required
for certain transfers. The other is concerning the administration of the tax cap, where an individual's
tax liability is capped at (currently) £115,000. Individuals applying for the cap meet the authorities to
discuss their assessment, but no actual ruling as such is given.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
In the light of question 1, questions 2-6 are not applicable.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
In the light of question 1, questions 2-6 are not applicable.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
In the light of question 1, questions 2-6 are not applicable.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
In the light of question 1, questions 2-6 are not applicable.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
In the light of question 1, questions 2-6 are not applicable.
www.lexmundi.com
Page 59
© 2012 Lex Mundi
Contact Information
Andrew Corlett
Andrew.corlett@cains.com
Cains
Fort Anne
Douglas, IM1 5PD
Isle of Man
Tel 44.1624.638300 Fax 44.1624.638333
www.cains.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 60
© 2012 Lex Mundi
Tax Rulings
Kuwait
Prepared by Lex Mundi member firm Abdullah Kh. Al-Ayoub & Associates
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers may request a ruling from the Tax Department. This right is granted by tax law. The
relevant tax law would be the "Ministerial Resolution No.29 of 2008 Concerning issue of the executive
bylaw of the provisions of the Kuwaiti Income Tax Decree No.3 of 1955 and the amendments thereto
as amended by the law No.2 of 2008".
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The tax law enumerates specific issues over which a taxpayer may request a ruling from the Tax
Department. Such topics include depreciation methods, adopting a special accounting period,
deadline extensions to file returns, etc. However, it is possible to obtain a non-binding advisory
opinion from the Tax Department concerning other issues. Such an advisory opinion would be at the
discretion of the Tax Department and is not explicitly provided for under the tax law.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings made by the Tax Department may be challenged by the tax payer before the Tax
Challenges Committee. The Tax Challenges Committee has the power to revoke or alter a ruling by
the Tax Department. Authorization is not required to either challenge or revoke rulings made by the
Tax Department. Both the tax payer and the Tax Department may challenge a ruling by the Tax
Challenges Committee before the "competent court" in Kuwait. This legal challenge would then follow
the normal course of litigation through the Kuwait legal system. Final judgment on any issue would
then lie with the Court of Cassation, Kuwait's highest court. Alternatively, if the tax issue involves a
constitutional question then the appropriate court would be the Constitutional Court which has final
judgment on matters related to the Kuwait Constitution.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The tax law does not explicitly allow for the Tax Department to initiate a tax ruling revocation under its
own initiative. Once the Tax Department makes a ruling the Tax Payer may either comply with the
ruling or challenge it within 90 days however.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
No. A taxpayer does not have any legal defense against the Tax Challenges Committee attempting to
revoke or alter a tax ruling made by the Tax Department. The taxpayer may challenge the revocation
in court however.
www.lexmundi.com
Page 61
© 2012 Lex Mundi
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The effect of the a revocation is not explicitly determined by the tax law. But since a revocation made
by the Tax Challenges Committee may be challenged in court the effects of such revocation would be
determined by that court on a case by case basis.
Contact Information
Saad Hani Al-Ghawas
alayoub@al-ayoub.org
Abdullah Kh. Al-Ayoub & Associates
Souk Al-Kabir Building, Block ‘B” 9th Floor
Fahed Al-Salem Street
Safat, 13018
Kuwait
Tel 965.22464321 Fax 965.22434711
www.al-ayoub.org
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 62
© 2012 Lex Mundi
Tax Rulings
Latvia
Prepared by Lex Mundi member firm LAWIN
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers have the right to request a confirmation of their legal rights (in Latvian "uzzina") from the
tax authorities. This is a general right under administrative law and is not specific to tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The rulings can be obtained on any issue which directly affects the legal rights of a subject under
Latvian law.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The ruling is binding on the tax authorities but is not binding on the taxpayer. The ruling cannot be
revoked by the tax authorities, however it is only applicable to the same facts and circumstances for
which the ruling was issued. As a result if a the facts or circumstances change even slightly, the tax
authorities have the opportunity to argue that the ruling is not applicable.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
This is not applicable.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
This is not applicable.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
This is not applicable.
www.lexmundi.com
Page 63
© 2012 Lex Mundi
Contact Information
Zinta Jansons
Zinta.jansons@lawin.lv
LAWIN
Elizabetes 15
Riga, LV-1010
Latvia
Tel 371.6781.4848 Fax 371.6781.4849
www.lawin.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 64
© 2012 Lex Mundi
Tax Rulings
Malaysia
Prepared by Lex Mundi member firm Skrine
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers in Malaysia may with effect from 1 January 2007 request for advance rulings on the
interpretation and application of the income tax provisions under the Income Tax Act 1967 (“ITA”)
from the Malaysian Inland Revenue Board. This is not a constitutional right but one provided for
pursuant to a fairly recent amendment to the ITA by way of the addition of a new section 138B to the
ITA that took effect in early 2007. The scope, procedure and fees imposed with respect to an
advance ruling are set out in the Income Tax (Advance Ruling) Rules 2007.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
There are limits to which an advance ruling would be issued. Firstly, a request for an advance ruling
has to be one where the issues require an interpretation of the income tax laws and not one seeking
to know what the law already clearly provides. An example of the latter is the law in relation to the
determination of residence status of a person. A request for an advance ruling has to be one where
the proposed arrangement is seriously contemplated by the person for implementation in the near
future. The term “arrangement” for this purpose is taken to include any scheme, contract, agreement,
plan or undertaking, whether enforceable or not, including all the steps and transactions that carry it
into effect. Such an arrangement would be considered to be in serious contemplation by a person if a
concerted effort and a definite course of action, whether unilateral or otherwise, has been made to
undertake the arrangement in the near future. Furthermore, no advance ruling will be provided if the
matter sought for is in relation to a provision of the ITA that authorises or requires the Minister or
Director General of Inland Revenue to:- (i) impose or remit a penalty; (ii) remit tax due and payable;
(iii) approve any application under the Act; (iv) inquire into the correctness of any return or other
information supplied by any person; (v) prosecute any person; or (vi) recover any debt owing by any
person.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
An advance ruling once issued, unless effectively revoked, is considered final and is not appealable
either to the Inland Revenue Board or the courts. Nevertheless, in the event a proposed arrangement
(of which a disadvantageous advance ruling has been issued) is carried out and tax is imposed
accordingly, the tax payer may still appeal to the Special Commissioners of Income Tax against the
assessment, as opposed to appealing against the advance ruling.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The Director General of Inland Revenue has the power to withdraw an advance ruling at any time
after it has been issued. This may occur due to changes in the interpretation of the tax laws based on
new differing decisions made by the courts. A withdrawal of an advance ruling which has been issued
to a person will be done by way of a notification of withdrawal. The date of withdrawal of an advance
www.lexmundi.com
Page 65
© 2012 Lex Mundi
ruling shall not be retrospective and not earlier than the date on which the person is reasonably
expected to receive the notice of withdrawal.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
As explained above, the Director General of Inland Revenue may withdraw an advance ruling at any
time after its issuance by giving written notice of such withdrawal to the person to whom the ruling
applies. In the event a person has effected the arrangement before the effective date of withdrawal,
then the person is allowed to rely on the advance ruling issued to him until the end of the period
stated in the advance ruling. The tax authorities shall in such circumstances be bound by the advance
ruling. On the other hand, if a person has not effected the proposed arrangement at the effective date
of withdrawal, then the advance ruling once withdrawn would no longer be binding on the tax
authorities.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Please refer to our answer to question 5 above.
Contact Information
Harold Tan Kok Leng
tkl@skrine.com
Skrine
Unit.No. 50-8-1, 8th Floor, Wisma UOA Damansara
50, Jalan Dungun, Damansara Heights
Kuala Lumpur, 50490
Malaysia
Tel 60.3.2081.3999 Fax 60.3.2094.3211
www.skrine.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 66
© 2012 Lex Mundi
Tax Rulings
Malta
Prepared by Lex Mundi member firm Ganado & Associates, Advocates
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
The Maltese Income Tax Act (the “Act”) requires the Commissioner of Inland Revenue (the
“Commissioner”) to issue advance revenue rulings in certain limited circumstances as identified in the
Act.
The tax payer’s right to obtain a tax ruling in these circumstances emanates from the Act.
Apart from Advance Revenue Rulings, it is customary for informal technical submissions to be made
by practitioners to the International Tax Unit at the Inland Revenue in order to obtain written
confirmation as to their agreement with the interpretation of certain tax provisions. Although Revenue
guidance in such matters is not technically binding at law, it is of high persuasive value.
In practice, it is much more common for requests to be made to the Inland Revenue through such
informal technical submissions since the scope of the matter would not be as restricted as it is in the
case of requests for tax rulings.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The Income Tax Act provides for the issuance of tax rulings on certain matters, including:
whether a holding of shares by a Maltese Company in a company qualifies as a “participating
holding” as defined in the Act;
ii) the tax treatment of any transaction which concerns any financial instrument or other security;
iii) the tax treatment of any transaction which involves “international business” with the
Commissioner retaining discretion as to what constitutes “international business”;
iv) a confirmation that the general anti-avoidance provision of the Act does not apply to a particular
transaction insofar as it is for bona fide and commercial reasons.
i)
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
A tax ruling is binding on the Commissioner for a period of two years from the time of any change in
relevant statutory provisions, or for a period of five years from the time of such ruling, whichever is the
lesser. Rulings may be renewed for a further period of five years.
Such ruling shall remain binding and valid as long as the company files separate declarations by its
directors and auditors together with its income tax return. If any particulars do not fully and accurately
disclose all facts and considerations material for the ruling of the Commissioner, any resulting ruling
shall be void.
www.lexmundi.com
Page 67
© 2012 Lex Mundi
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The tax authorities cannot revoke a tax ruling though a tax ruling could be void if the particulars of the
application do not fully and accurately disclose all facts and material considerations. The Act does not
establish a time limit within which the Inland Revenue may take steps to revoke a ruling which would
be voidable.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The taxpayer must be able to prove that he had fully and accurately disclosed all facts and material
considerations in the original application form. This is an issue of fact for determination by the courts
if the taxpayer decides to sue the Commissioner in case of a revoked ruling.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The Act refers to the ruling being void, and accordingly would be deemed as never having been
issued by the Commissioner in the first place. This could potentially expose the taxpayer to tax,
interest and penalties retrospectively.
We are not aware of any instances where the Commissioner has revoked a tax ruling issued in the
context of international business.
Once a tax ruling expires, it is no longer binding on the Commissioner of Inland Revenue.
Contact Information
Stephen Attard
sattard@jmganando.com
Ganado & Associates, Advocates
171, Old Bakery Street
Valletta, VLT 09
Malta
Tel 356.21235.406 Fax 356.21225.908
www.jmganado.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 68
© 2012 Lex Mundi
Tax Rulings
Mexico
Prepared by Lex Mundi member firm Basham, Ringe y Correa, SC
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, the right to make any kind of inquiry to the authorities is granted both in the Mexican Constitution
and in the Federal Fiscal Code (FFC). According to the Mexican Constitution, Mexican authorities are
compelled to answer written requests from any individual or entity in Mexico, if the requests are (i)
made in writing and (ii) in a peaceful and (iii) respectful way. In particular, tax authorities have the
obligation to answer queries raised by taxpayers in writing, provided that they are based on real and
actual situations. According to the FFC tax authorities are theoretical required to answer queries
within three months of its submission, although this is not the common practice. The answers to the
questions are binding on the authorities, they create rights for individuals to whom they are
addressed, provided that the query includes all the facts of the particular case and these are not
modified or forged, or that the legislation in which the response was based has not changed.
Nevertheless it is important to mention that the response is not binding for the taxpayers.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
They can be obtained on every tax issue as long as the issue is real and specific. In other words, tax
authorities are not required to answer if the topic is theoretical or made in the general sense.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Letter rulings that favor a private party may only be modified or revoked by the Federal Fiscal Court
[Tribunal Federal de Justicia Fiscal y Administrativa] through a trial initiated by the tax authorities.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Yes, authorities have five years to demand a revocation or modification of a ruling that favors the
taxpayer. Said term concludes five years as of the day of the notification of the rule to the tax payer.
In this process, the claim would be submitted directly to the Federal Fiscal Court [Tribunal Federal de
Justicia Fiscal y Administrativa]. Once the resolution is issued by the Federal Fiscal Court, the
taxpayer will still have the possibility to challenge the decision though constitutional proceedings
[juicio de amparo], and/or the authorities may file for an appeal which will be finally decided by a
Federal Circuit Court for Administrative Matters.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Tax authorities have no legal power to revoke by themselves a tax ruling. If so, the taxpayer can
appeal by filing a claim before the Federal Fiscal Court [Tribunal Federal de Justicia Fiscal y
www.lexmundi.com
Page 69
© 2012 Lex Mundi
Administrativa] which will follow the process described in question 11. Nevertheless, taxpayers will
only have a 45 day period, prior to the notification of such act to file an appeal.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
A revocation of a tax ruling by the Federal Fiscal Court will declare such ruling null and void and as a
result tax authorities would be able to assess tax deficiencies including penalties during the last five
years.
Contact Information
Alejandro Barrera Fernandez
barrera@basham.com.mx
Luis Ortiz
ortiz.hidalgo@basham.com.mx
Francisco Matus
Basham, Ringe y Correra, SC
Paseo de los Tamarindos No. 400-A, Piso 9
Bosques de las Lomas
Mexico City, D.F. 05120
Mexico
Tel 52.55.5261.0400 Fax 52.55.5261.0496
www.basham.com.mx
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 70
© 2012 Lex Mundi
Tax Rulings
New Zealand
Prepared by Lex Mundi member firm Simpson Grierson
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes Granted by tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Rulings available on most topics.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Definitive but issued based on assumptions and a description of the arrangement to which it relates. If
the assumptions are not met or the arrangement as implemented differs from that ruled on, it is not
binding on the Revenue. Rulings can be withdrawn by the Revenue.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No deadline to withdraw.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The ruling is binding provided the assumptions are met and the arrangement implemented as
described. Rulings can be issued for a finite period so that a similar arrangement entered into in
reliance on an out dated ruling does not have the benefit of the earlier binding ruling. The Revenue
may withdraw a ruling but the ruling continues to apply to an arrangement that was ruled on and
entered into before the date of the withdrawal of the ruling.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Rulings are not withdrawn with retroactive effect (see 5 above).
www.lexmundi.com
Page 71
© 2012 Lex Mundi
Contact Information
Stuart Hutchinson
stuart.hutchinson@simpsongrierson.com
Simpson Grierson
Level 27 Lumley Centre, 88 Shortland Street
Private Bag 92518
Auckland, 1141
New Zealand
Tel 64.9.358.2222 Fax 64.9.307.0331
www.simpsongrierson.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 72
© 2012 Lex Mundi
Tax Rulings
Nicaragua
Prepared by Lex Mundi member firm Alvarado y Asociados
1.
Do taxpayers have the right to request a ruling from the tax authorities? If yes, please
clarify if it is a constitutional right or if it is granted by tax law.
Nicaragua does not have a ruling system per se established by Law. However, according to
article 223 of the Tributary Code the Nicaragua Tax Authority is authorized (Direccion General de
Ingresos) to determine the procedures to be applied by regulations issued, this is known as a
“Tax Provision” (Disposición Técnica)
In the same sense, according to article 73 of Tributary Code taxpayers have the right to make a
“consultation” to the Tax Authorities asking for an interpretation of the direction, form, base and
scope of tax rules to a factual, specific and current situation.
2.
Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
According to article 223 of the Tributary Code the determination of the procedures to be applied
by regulations issued by tax provisions (Disposiciones Tecnicas) among others are limited to the
following cases:
1.
Administrative intervention;
2.
Business Closing;
3.
Confiscation of property;
4.
Authorization systems, to keep accounts, invoices, receipt of cash registers, and
5.
Special procedures for:
6.
a.
Credit Notes;
b.
Issuance of newsletters;
c.
Tax Opinion;
d.
Evacuation of consultation;
e.
Taxpayer;
f.
Reimbursement, and
Any other provision deemed necessary to comply with the Law.
www.lexmundi.com
Page 73
© 2012 Lex Mundi
As for the “consultation” referred previously, according to article 73 of Tributary Code taxpayers
can make a “consultation” on every tax issue, including an interpretation of the direction, form,
base and scope of tax rules to a factual, specific and current situation provided that the taxpayer
must state it in writing, with clarity and precision, all elements of the circumstances giving rise to
the inquiry and express his based opinion.
3.
Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
A Tax Provision issued by the Tax Authority, can be revoked or amended by the same Tax
Authority. Tax Payer can impugn/challenge a Tax Provision only by a Constitutional challenge.
A consultation is not subject to challenge or appeal and only takes binding effect on the tax
authorities in the case and fact specifically consulted by taxpayer. It does not serve as a
resolution.
4.
Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no regulation regarding a deadline to issue a tax ruling revocation process neither to
issue a procedure over tax matters.
For the consultation, Tax Authority has 69 days to issue an answer. Only the Taxpayer can use
the answer of the consultation issued by the Tax Authority over the specific case or fact consulted
by him. Taxpayer can use the consultation unanswered on time as positive administrative silence
rule.
5.
Does the taxpayer have any legal defense against a tax authority attempting to revoke a
tax ruling? If so, please explain the defense.
The tax law in Nicaragua only contemplates two situations:
6.
1)
If the term given to the Administration is expired and the authority has not confirmed his
opinion, the consultant will meet their tax obligations, according to the view expressed in
its query (positive administrative silence rule). However, this administrative silence is not
binding on any other case.
2)
In case the response issued by the tax authorities is not in accordance with the view
taken by the Taxpayer, it must pay the obligation without any penalty or fee for the time
the administration delayed its response. No inquiry will be retroactive or suspend the
action of the Tax Administration audit.
What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does
it take effect only from the date of the revocation?)
The revocation of a tax ruling per se, is not contemplated in Nicaragua´s tax law, since the term
“tax ruling” is understand as a “consultation” or as a “Tax Provision” which is explained in
previous answers.
Nicaragua´s tax law merely establishes two circumstances under which the tax ruling will be null:
www.lexmundi.com
Page 74
© 2012 Lex Mundi
1)
Is based on data, information and / or false or inaccurate documents provided by the
taxpayer, and,
2)
Is issued by authorities who are not authorized to issue such a response.
7. Does the taxpayer have any legal defense against a tax authority attempting to revoke a
tax ruling? If so, please explain the defense.
Fiscal Audit made by Tax Authority must follow the answer of the consultation for the specific
case and facts presented by the Taxpayer and cannot go against it. The results of a Fiscal Audit
resolution that goes against can be impugned trough the administrative procedure (Tax reposition
and review challenge as well as Tax Appeal).
Contact Information
Jose Anibal Olivas Cajina
jaolivas@alvaradoyasociados.com.ni
Gloria Maria de Alvarado
gmalvara@alvaradoyasociados.com.ni
Alvarado y Asociados
Planes de Altamira III Etapa,
Semáforos ENITEL Villa Fontana
2 Cuadras al Este, 2 ½ Cuadras al Norte.
Managua, Nicaragua
P.O. Box 5983.
Teléfonos: +505 22787708 / 22772308 /
22772417.
Fax: +505 22787491
www.alvaradoyasociados.com.ni
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 75
© 2012 Lex Mundi
Tax Rulings
Nigeria
Prepared by Lex Mundi member firm Udo Udoma & Belo-Osagie
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, taxpayers in Nigeria have a right to apply to the tax authorities (i.e. the Federal Inland Revenue
Service (the "FIRS") or the State Board of Internal Revenue in the various States in Nigeria) when
they are not clear about how the tax authorities will apply or interprete unclear or conflicting
provisions of the tax laws. This right is neither constitutional nor one specifically granted by law but is
honoured as a matter of practice by the tax authorities. To put all of this into context, Nigeria is a
federation made up of the Federal Government of Nigeria (which collects taxes from companies) and
36 State Governments (which collect personal income tax from individuals in their respective States).
The FIRS has jurisdiction to collect taxes, and administer tax laws as they relate to companies'
income tax, petroleum profits tax, value added tax, education tax, etc on behalf of the Federal
Government. On the other hand, the State Boards of Internal Revenue have jurisdiction to collect
taxes, and administer tax laws, as they relate mostly to individuals, on behalf of their respective State
Government. A taxpayer who is seeking clarification on any unclear or inconsistent provision of the
tax laws in respect of the above taxes will have to apply to the appropriate tax authority for a ruling.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
There are no limitations on the range of issues in relation to which a taxpayer can seek a ruling from
the tax authority responsible for the collection of the particular tax in question.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings are not definitive and the tax authorities will, occassionally, not follow their earlier rulings
or will interpret relevant provisions of the tax laws in a manner contrary to what may have been
expressed in previous rulings. No particular authorisation is required in order for the tax authorities to
revoke a previous ruling.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No, the Nigerian tax authorities do not have a deadline or timeframe within which they are required to
commence the process of revoking a.previous tax ruling.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
If the relevant tax authority has earlier taken a particular position in a ruling and communicates such
position to the taxpayer, then, the taxpayer would be entitled to rely on the position communicated to
its by that tax authority in ordering its affairs and for purposes of its tax planning. Should the tax
authority seeks to change its interpretation and application of the provision in the future, to, for
instance, generate additional tax revenues, then the tax payer would be entitled to rely on the
www.lexmundi.com
Page 76
© 2012 Lex Mundi
“doctrine of legitimate expectation” as a basis for arguing that the relevant tax authority, as a public
body, cannot and should not be permitted to do so. The essence of this doctrine, which has been
adopted by the Supreme Court of Nigeria, is that where a public authority has made a promise or
adopted a practice that represents how it proposes to act in a given area, fairness requires that the
promise or practice should be honoured unless there is a good (i.e. an overriding) reason or not to do
so. Useful though this doctrine is, however, it still leaves the taxpayer exposed to the risk that the tax
authority may seek to change its interpretation and application of the relevant provision(s) not simply
because it wants to collect more tax but because a court has issued a contrary interpretation of the
relevant provision(s) of the tax laws, which the tax authority would be bound to follow.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Once a tax ruling has been revoked, the relevant tax authority may seek to apply it retroactively in
assessing the taxpayer to tax. In this regard, therefore, unless the taxpayer obtains an order of the
court restraining the relevant tax authority from applying a revoked tax ruling retroactively, we see
nothing under Nigerian law that prohibits a tax authority from doing so. Where a ruling has been
revoked, the taxpayer will have a liability to pay the principal amount of any tax that may be due and
owing. The tax authority may also seek to recover interest and penalties on the principal tax due from,
and owing by, the taxpayer to the relevant tax authority.
Contact Information
Dan Agbor
dan.agbor@uubo.org
Joseph Eimunjeze
joseph.eimunjeze@uubo.org
Udo Udoma & Belo-Osagie
St Nicholas House, (10th & 13th Floors)
Catholic Mission St, P.O.B. 53123 (Ikoyi)
Lagos,
Nigeria
Tel 234.1.4622307.10/8970622 Fax 234.1.4622311
www.uubo.org
www.lexmundi.com
Page 77
© 2012 Lex Mundi
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 78
© 2012 Lex Mundi
Tax Rulings
Pakistan
Prepared by Lex Mundi member firm RIAALAW
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Advance Ruling is a right which has only been granted only to a non-resident tax payer. The right has
been granted by Section 206A of the Income Tax Ordinance 2001.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The tax ruling can be obtained by the non-resident tax payer only in respect of the application of the
Income Tax Ordinance to a transaction proposed or entered by the tax payer.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The tax ruling is binding on the Income Tax Commissioner with respect to the application of the
Income Tax Ordinance to the transaction as it stood at the time of the ruing. There is no provision in
the Income Tax Ordinance for revocation of such advance tax rulings, with or without the
authorisation of a Court.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no deadline prescribed in the Income Tax Ordinance to start a tax ruling revocation process.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The defense to any attempt to seek a revocation of a tax ruling would be that there is no provision in
the Pakistan Income tax laws for such revocation. Our Supreme Court of Pakistan has also ruled that
vested rights cannot be adversely affected by withdrawing exemptions on the basis of which an
investor has taken a decision to invest in a particular transaction.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
N/A. Concept of "revocation of tax ruling" does not exist in Pakistan.
www.lexmundi.com
Page 79
© 2012 Lex Mundi
Contact Information
Ahsan Zahir Rizvi
arizvi@riaalaw.com
RIAALAW
RIAALAW Chambers, D-67 Block 4, Clifton
Karachi, 75600
Pakistan
Tel 92.21.3583.6308 Fax 92.21.3587.0014
www.riaalaw.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 80
© 2012 Lex Mundi
Tax Rulings
Peru
Prepared by Lex Mundi member firm Estudio Olaechea
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, though the request must be canalized through representative entities of economic, labor and
professional activities as well as public entities pertaining to the Government. This is the only possible
channel through which a ruling may be requested to the tax authorities in order to acknowledge what
their opinion is in regard to the interpretation of the sense and scope of tax norms. In this case, the
Tax Authorities are obliged to issue their response to the consulting entity. If the matter subject to
consultation is deemed important by the Tax Authorities, they will issue the corresponding norm and
publish it in the Official National Newspaper. It is a right expressly granted by the Peruvian Tax Code
(i.e. granted by tax law).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The issuance of tax rulings is limited to the meaning and scope of application of tax norms in regard
to any tax issue.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Peruvian tax rulings are not definitive. They can be revoked by the tax authorities themselves without
requiring a Tax Court authorization.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No, there is no regulation regarding a procedure to revoke tax rulings.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
A Tax Authority’s attempt to revoke its tax ruling is generally an internal affair where taxpayers do not
have the possibility to intervene.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The revocation of a tax ruling may only hold the taxpayer liable retroactively in regard to unpaid taxes
(i.e. just principal amount owing) as a result of having adopted the criteria contained in the revoked
tax ruling. That is, no interests or penalties may be charged to the taxpayer in this case.
www.lexmundi.com
Page 81
© 2012 Lex Mundi
Contact Information
Jorge Davila
jorgedavila@esola.com.pe
Estudio Olaechea
Bernardo Monteagudo 201
San Isidro
Lima, 27
Peru
Tel 511.219.0400 Fax 511.219.0422
www.esola.com.pe
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 82
© 2012 Lex Mundi
Tax Rulings
Poland
Prepared by Lex Mundi member firm Wardynski & Partners
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers are entitled to request a ruling from the tax authorities. It is a right expressly granted by the
tax law (Art. 14b of the Tax Ordinance Act).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Tax rulings can be obtained in reference to the tax law. Thus, issuance of the tax ruling is not limited
to certain topics, as long as it requires an interpretation of tax law in general, including tax treaties.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
In fact, Polish law entitles tax authorities to “change” a tax ruling, not to “revoke” it. Nevertheless in
practical terms it may have similar effects for the taxpayer. Tax rulings can be changed ex officio by
tax authorities when the Minister of Finance finds it to be “incorrect”. Tax court authorization is not
required.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no deadline to start a tax ruling change process. Thus, it can be changed at any time.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
There is no legal defense against a tax authority attempting to change a tax ruling, since the taxpayer
is informed about the change only after it has been performed. Nevertheless, after the tax ruling has
been changed, taxpayer is entitled to the same remedies, as in case of the original tax ruling. It is
possible to apply to tax authorities to remove the “law infringement”, and if necessary, file a complaint
on a decision to a tax court (in Poland it would be a Provincial Administrative Court).
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
After the tax ruling is changed, the ruling is no longer binding upon a taxpayer and tax authorities. No
penalties can be imposed on a taxpayer in reference to events resulting in tax liability that occurred
after the initial tax ruling was issued and before it has been changed. Taxpayer is exempted from any
tax liability that arouse as a result of his actions taken in harmony with the tax ruling, after the primary
tax ruling was issued and until the end of the tax period during which the ruling has been changed
(e.g. if the tax ruling referred to the Corporate Income Tax, the “protection” is valid until the end of the
fiscal year).
www.lexmundi.com
Page 83
© 2012 Lex Mundi
Contact Information
Dariusz Wasylkowski
Dariusz.wasylkowski@wardynski.com.pl
Wardynski & Partners
Aleje Ujazdowskie 10
Warsaw, 00-478
Poland
Tel 48.22.437.82.00 Fax 48.22.437.82.01
www.wardynski.com.pl
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 84
© 2012 Lex Mundi
Tax Rulings
Romania
Prepared by Lex Mundi member firm Nestor Nestor Diculescu Kingston Petersen
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Romanian taxpayers do have the right to request tax rulings from the tax authorities. Such right is
regulated through Romania's Tax Code, Romania's Tax Procedural Code and secondary legislation.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Tax rulings may be obtained on every tax issue as long as it is applied for in relation to future events
(i.e. no tax ruling may be obtained on a matter pertaining to a past or an on-going transaction).
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings lose their validity once the tax law provisions based on which they were issued are
amended. No specific tax court authorization is required in this respect.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No particular procedure for the revocation of a tax ruling is indicated in the current legislation and no
deadline either. The only mentioning in the law as to the invalidation of a tax ruling is made in the
context of the change of legislation.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Please see answer 4.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Based on general principles of law, the invalidation of a tax ruling could produce its effects only from
the moment when the legal provisions based on which the ruling was issued are modified and
become effective. There may be the case however when the background described - and for which a
tax ruling has been requested - does not correspond to the de facto situation (i.e. the tax ruling is
issued based on inaccurate description of facts); in such case, the taxpayer position could be
reconsidered from the very beginning.
www.lexmundi.com
Page 85
© 2012 Lex Mundi
Contact Information
Ana-Maria E. Miron
ana-maria.miron@nndkp.ro
Nestor Nestor Diculescu Kingston Petersen
Bucharest Business Park, Entrance A, 4th floor
1A Bucuresti-Ploiesti National Road 1st District
Bucharest, 013681
Romania
Tel 40.21.201.1200 Fax 40.21.201.1210
www.nndkp.ro
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 86
© 2012 Lex Mundi
Tax Rulings
Scotland
Prepared by Lex Mundi member firm Maclay Murray & Spens LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers do not have a general right in law or otherwise to request a tax ruling.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The UK tax legislation provides that statutory advance clearance or approval may be given by HM
Revenue & Customs (“HMRC”) to certain transactions. For businesses, HMRC will provide a nonstatutory clearance if there is material uncertainty as to how tax law will apply to a specific transaction
and if the issue is commercially significant. HMRC will advise individual taxpayers as to their
interpretation of the law (including its application to a proposed transaction) if query is in the following
categories: • the interpretation of legislation passed in the last four Finance Acts; • the application of
double taxation agreements; • whether someone is employed or self employed; • Statements of
Practice and extra-statutory concessions; and • other areas concerning matters of major public
interest in an industry or in the financial sector.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings can be revoked in certain circumstances. If a ruling given is correct in law it will be binding
on HMRC. If HMRC provide a ruling that is incorrect in law, they will be bound by such advice
provided that it is clear, unequivocal and explicit and the taxpayer can demonstrate that: • they
reasonably relied upon the advice; • where appropriate they made full disclosure of all the relevant
facts; and • the application of the statute would result in their financial detriment. It is for the courts to
decide whether the ruling is correct in law. In certain circumstances, HMRC will not be bound by a
ruling they have given. For example this may occur where: • for a pre-transaction ruling, the nature of
the transaction changes in a way that has a material impact on the transaction as a whole; • the
taxpayer provided incorrect or incomplete information when they made the ruling application; • a
Court or Tribunal judgment changes the prevailing interpretation of the law on which the ruling was
based and the taxpayer’s liability to tax for that year has not been finalised; No tax court authorisation
would be required in these circumstances; the ruling would just be void.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
HMRC can make a discovery assessment into a tax return generally within 4 years of the end of a tax
year. This rises to 6 years where there has been careless behaviour by the taxpayer and up to 20
years where there has been deliberate behaviour or a failure to notify by the taxpayer.
www.lexmundi.com
Page 87
© 2012 Lex Mundi
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The only defence would be that the taxpayer provided full details of the transaction and carried out
the transaction exactly as described to HMRC. If HMRC refuses to be bound by a ruling that it has
given in respect of a particular transaction, as there is no appeals procedure, the only remedy would
be for the taxpayer to seek a judicial review.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Where HMRC provides an erroneous ruling that is binding on them and subsequently notifies the
taxpayer that it is incorrect, the taxpayer will only be required to start accounting for tax on the correct
basis from the date of notification. Where a ruling is void as a result of a transaction changing or if the
taxpayer provided incorrect information, the ruling will be deemed never to have had effect and any
additional tax that should have been paid, together with interest and penalties, will be due. Where a
Court or Tribunal judgment changes the prevailing interpretation of the law on which the ruling was
based and the taxpayer’s liability to tax for that year has not been finalised, any additional tax for that
year will be due. If the liability to tax has been finalised, no further tax will be due. Where the statutory
law relevant to the transaction for which the ruling was given changes. If this change is retrospective
HMRC will not be bound by any pre- or post-transaction ruling they have previously given and so
additional tax, together with interest and penalties would be due. This situation occurs very
infrequently. If the new statute is enacted pre-transaction and is prospective, any previously given
ruling relating to the transaction will not be considered to be binding. HMRC has a duty to collect the
correct amount of tax as required by statute at the time the transaction takes place. It remains the
taxpayer's responsibility to take account of changes in the law.
Contact Information
Gwen Souter
Gwen.souter@mms.co.uk
Maclay Murray & Spens LLP
1 George Square
Glasgow, G2 1AL
Scotland
Tel 44.141.248.5011 Fax 44.141.248.5819
www.mms.co.uk
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 88
© 2012 Lex Mundi
Tax Rulings
Serbia
Prepared by Lex Mundi member firm Jankovic, Popovic & Mitic o.a.d.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
No. Serbian tax system does not recognize the institute of tax rulings. There is an opportunity for
taxpayers i.e. any citizen (individual or legal entity) to request from the Ministry of finance for an
opinion - clarification of certain tax issue (of whatever nature) or any provision of tax laws and bylaws.
However, this opportunity derives not from the tax laws but from the laws regulating state authorities
and the opinions given by the Ministry are not mandatory. Neither the Ministry itself (which
organizational part, Tax Authority, is competent government body in the first and the second degree
tax administrative proceedings) nor the individual/entity that asked for the opinion are bound by the
given opinion.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Contact Information
Nikola Djordjevic
Nikola.djordjevic@jpm.rs
Jankovic, Popovic & Mitic
6 Vladimira Popovica Street
Belgrade, 11000
Serbia
Tel 381.11.207.6850 Fax 381.11.207.6899
www.jpm.rs
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 89
© 2012 Lex Mundi
Tax Rulings
Slovak Republic
Prepared by Lex Mundi member firm Čechová & Partners
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
The Slovak tax law does not recognize specific concept of tax rulings. Tax authorities render either
internal acts such as guidelines binding on tax authorities and their employees concerning tax
procedures and processes, or formal decisions issued in tax proceedings binding only upon tax
payers that are parties to such proceedings and addressees of such decisions.
Guidelines or methodical instructions in the field of taxes and accounting are published by the Tax
Directorate of the Slovak Republic on its website in order to secure unified application of tax
regulations and the act on accountancy by tax authorities. These acts are kind of soft-laws and are
not generally binding on public but only on employees of tax authorities. The aim of publishing these
methodical instructions and guidelines on the website is to enable public access to this information
and, more importantly, to give understanding to public on the way how binding tax regulations are
applied by tax authorities.
Tax proceedings is regulated by the Act No. 511/1992 Coll. on Administration of Taxes and Fees as
amended (Tax Administration Act) that stipulates general rules of tax proceedings tha are binding on
all subjects participating on administration of taxes, fees, fines and penalties. Special acts governing
individual types of taxes (e.g. excise taxes on spirits, wine, beer, tobacco and tobacco products,
mineral oil) stipulate several specific procedural provisions concerning only certain types of taxes.
In general, in tax proceedings that may be commenced by a tax authority start either upon request of
a taxable party (taxpayer, tax debtor pursuant to special acts, payer and successor-at-law of the
www.lexmundi.com
Page 90
© 2012 Lex Mundi
individual or the legal entity, which is considered to be taxable party by special legislation) or ex
officio tax authorities issue decisions that have a nature of individual administrative acts as they
govern rights and tax liabilities of specific taxable parties and are binding upon tax payers that are
addresses thereof. Decisions are mainly related to and concern tax assessment, way of calculation
and payment of taxes, imposition of fines, levy of default interest, postponement of tax payment
duties, permission of payment of tax in instalments, tax enforcement etc. Decisions in simple matters
shall be issued without a delay, in complicated matters within 30 days after commencement of the tax
proceedings and in particularly complicated matters within 60 days after commencement of the tax
proceedings.
Taxable parties may lodge remedial measures only against those types of decisions for which the
right to lodge remedial measures is prescribed by tax regulations. There are several types of
regular/ordinary remedial measures such as an appeal, complaint, reclamation and objection and
extraordinary remedies such as a renewal of proceedings and review of the decision beyond
appellate proceedings.
The appeal is admissible for example against the determination of the tax by the tax administration. It
shall be filed with the authority the decision of which is being appealed within 15 days from the
decision promulgation date.
The complaint may be filed only in if taxable party has any doubts as to the correctness of the tax or
tax advance withhold. In such case, it shall ask the taxpayer for explanations within 60 days after the
date of the withholding. If the taxable party disagrees with the actions of the taxpayer, it may file a
complaint against the actions of the taxpayer with the tax administration. The compliant must be filed
within 30 days after the date of receipt of the explanations of the taxpayer by taxable party.
The taxable party may object to the actions of employees of the tax administration taken within the
framework of the tax proceedings and in other instances specified in tax acts within eight days after
learning the relevant facts.
The taxable party may file a reclamation against the actions of the tax administration taken at the
payment and recording of taxes within eight days after learning the relevant facts.
Extraordinary remedies are admissible only against final and non-appealable decisions. Proceedings
which were terminated by a final decision (other than a decision, which changes another decision
beyond the proceedings of appeal) may be renewed upon request of a party thereto or ex officio in
instances prescribed by the Tax Administration Act. The request of renewal of the proceedings shall
be filed with the tax administration which took the decision in the first instance within six months from
the date on which the applicant must have learned the reasons justifying the renewal, however not
later than three years from the effective date of the decision which is affected by the renewal.
A request of review of a decision beyond the proceedings of appeal shall be filed with the authority,
which rendered the same and must be filed within three years after the date on which the decision
became final and non-appealable.
Tax regulations stipulate in which cases the courts shall examine the decisions made by the
administrative authorities.
www.lexmundi.com
Page 91
© 2012 Lex Mundi
Contact Information
Tomáš Maretta
Tomas.maretta@cechova.sk
Čechová & Partners
Sturova 4
Bratislava, 811 02
Slovak Republic
Tel 421.2.5441.4441 Fax 421.2.5443.4598
www.cechova.sk/en/
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 92
© 2012 Lex Mundi
Tax Rulings
Spain
Prepared by Lex Mundi member firm Uría Menéndez
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. Taxpayers have the right to request a ruling from the tax authorities. The ruling must be issued
by the General Tax Directorate in six months after its request. This right is specifically granted by the
General Tax Law (Articles 88 and 89) and it is based on the constitutional right to legal certainty
(Article 9 of the Spanish Constitution).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The right to request a ruling obliges the tax administration to give taxpayers the necessary assistance
and information to help them in the fulfillment of their tax obligations. Generally speaking, tax rulings
are not limited to specific topics and can be obtained on every tax issue. Also, Spanish law provides
taxpayers with a statutory right to seek advance pricing agreements (APAs) securing tax authority
approval of their transfer pricing policies.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings duly requested are binding on the tax authorities and their criteria must be compulsory
applied to taxpayers in similar cases provided the regulations existing at the time of issuance and
applicable case law remains unchanged. However, in practice, the tax authorities may change from
time to time their criteria on newly issued tax rulings but such changes will not have retroactive effects
for taxpayers (the new criteria will supersede the previous ones for future cases).
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no tax ruling revocation process in Spain.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Not applicable.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Not applicable.
www.lexmundi.com
Page 93
© 2012 Lex Mundi
Contact Information
Luis Viñuales
lvs@uria.com
Carlos Duran
cdu@uria.com
Uría Menéndez
Calle Principe de Vergara, 187
Plaza de Rodrigo Uría
Madrid, 28002
Spain
Tel 34.91.586.04.00 Fax 34.91.586.04.03
www.uria.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 94
© 2012 Lex Mundi
Tax Rulings
Taiwan
Prepared by Lex Mundi member firm Tsar & Tsai Law Firm
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
The Constitution only provides that citizens of Taiwan, the Republic of China, are obligated to pay tax
but there is no mentioning of the right for the citizens to request a tax ruling from the tax authorities in
the Constitution or any other laws. However, many constitutional law scholars in Taiwan take a
positive position that taxpayers have certain fundamental rights, which, among others, include the
right to pay no more than the correct tax. In practice, a large number of tax rulings on a wide range of
topics have been issued by the Ministry of Finance (“MOF”) at the request of taxpayers. Nonetheless,
taxpayers’ obtaining of a tax ruling from the MOF is more of a privilege than a right, since the tax
authorities oftentimes refuse to issue a tax ruling on the grounds that the facts presented are too
vague or the issues are too broad. As to Advance Tax Rulings (“ATRs”), the MOF announced in 2003
the “Directions for the Implementation of Advance Tax Rulings (the “Directions”),” which allows
taxpayers to apply for ATRs on a specific future transaction that will happen within one year provided
certain requirements are met (Please see answers to Question 2).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The application for tax ruling is not limited to particular topics. For Advance Tax Ruling, the Directions
set forth the following requirements for a transaction to be eligible for review by a special committee
of the MOF to issue an ATR: (i) The transaction must involve international taxation issues in an
international transaction or investment; and (ii) The amount of investment, excluding the value of
land, is NT$200 million or more or the initial transaction amount is NT$50 million or more or the
transaction provides major economic benefits to Taiwan.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings in Taiwan are subject to revocation by the tax authorities without court authorization.
There is no tax court in Taiwan; tax cases are subject to the judicial review by the Administrative
Court system and tax rulings per se are not eligible for judicial review, although taxpayers may
challenge the validity of a tax ruling on the grounds of its being in conflict with the law.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The tax authorities in Taiwan may revoke or revise a tax ruling almost at any time after it is issued. In
practice, the MOF periodically publishes compilations of tax rulings on different areas of tax laws that
include all tax rulings deemed valid as of the date of publication.
www.lexmundi.com
Page 95
© 2012 Lex Mundi
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
If a tax ruling is incorporated into the MOF’s compilations of tax rulings, it can be generally relied
upon by all taxpayers, but the tax authorities may revoke it afterwards .The effect of such revocation
is described in the answers to Question 13 below. If a tax ruling is issued to a taxpayer in response to
a specific request made by the taxpayer, the taxpayer may claim a reliance interest if the tax authority
attempts to revoke the tax ruling.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
In principle, a tax ruling becomes effective on the date of its announcement, but a tax ruling which
interprets a particular provision of the tax law or regulation shall be retroactively effective from the
original effective date of such tax law or regulation, except when such tax ruling contradicts or
revokes an earlier tax ruling, in which case, unless the earlier tax ruling is unquestionably erroneous,
the later tax ruling shall be effective from its announcement date without retroactive effect. A
revocation of a tax ruling is deemed a new tax ruling and follows the same rule.
Contact Information
Wellington Liu
wellingtonliu@tsartsai.com.tw
Trinity Lin
Tsar & Tsai Law Firm
8th Floor, 245, DunHua S. Road, Section 1
Taipei, 106
Taiwan
Tel 886.2.2781.4111 Fax 886.2.2721.3834
www.tsartsai.com.tw/eng/
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 96
© 2012 Lex Mundi
Tax Rulings
Turkey
Prepared by Lex Mundi member firm Pekin & Pekin
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Turkish tax laws generally do not allow for binding rulings or pre-clearance of tax structures except for
a very limited number of regulated specific areas such as transfer pricing formulas. On the other
hand, taxpayers have the right to ask the relevant tax authority on their non-binding views regarding
tax practices that are unclear or which may lead to discrepancy. In case of a future dispute such
official views do not secure the taxpayer against assessment of (additional) taxes but usually protect
him against assessment of tax penalty and late payment interest.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
As we explained under question (1) herein above, Turkish tax laws only allow for the issuance of nonbinding views by Turkish tax authorities (the “Non-Binding View”). Further restrictions apply to the
scope of the Non-Binding View as we will explain below: There is a group of issues that have been
determined by the “Regulation regarding the Responses to be Given to the Clarification Requests of
the Taxpayers” (“Regulation”) issued in accordance with and with regards to the application of the
Article 413 of the Tax Procedures Law which indicate on which topics such clarification cannot be
requested. These topics are as follows: • Information regarding tax status of third parties; •
Information on issues that have become subject to judicial proceedings; • Information requests by
taxpayers with regard to issues on which there is a pending investigation involving such tax payer; •
Information on theoretical issues which are not based on actual cases; • Requests regarding matters
such as the publication by a taxpayer of a condition of force majeure, cancellation of tax obligations
and document order for which the Ministry of Finance has been authorized to determine any
application based on laws; • Requests for correction regarding taxation errors made by the taxpayers
pursuant to Article 122 of the Tax Procedures Law, applications made by the taxpayers regarding tax
practices following the realization of such practices and applications made by way of complaints
which will be reviewed by the Ministry of Finance pursuant to Article 124 of the Tax Procedures Law; •
Requests made orally, in a written fashion or through internet pursuant to the Law regarding the Use
of the Right to Petition numbered 3071 and the Law Regarding the Right to Obtain Information
numbered 4982.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Pursuant to Article 369 of the Law, if a Non-Binding View given by the relevant tax authority -as
requested by a taxpayer- contains incorrect information or a precedent regarding the application of a
certain rule has changed, no tax penalties and delay interest shall be imposed but (additional) tax
(principal amount) can still be assessed by the tax authority without a tax court authorization.
However, the taxpayer would be in a relatively strong position to refute such assessment before a tax
court. If an authorized authority presents a different opinion with regards to the application of a certain
rule by means of amending communiqués or circulars, such new opinion shall only become
enforceable as of the effective date of issuance of such new communique or circular. However, this
term shall not apply to communiqués and circulars rendered ineffective by judicial bodies.
www.lexmundi.com
Page 97
© 2012 Lex Mundi
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
By the introduction of a new law (Law No. 6009) on procedures the tax authorities must pass
significant views through an internal approval process. However, since this only represents an
internal administrative approval, especially the Ministry of Finance or the Council of Ministers can
always revise/revoke precedent views without being subject to any deadline.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
As stated under question (3) above, the taxpayer has a right to defend himself, if a Non-Binding View
is later ignored by the tax authority, against tax penalty or interest (but not principal tax). This is of
course limited to the tax which has been assessed within the scope of the Non-Binding View.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
As also explained under question (4), the tax administration can always revoke/revise a precedent
Non-Binding View. As regards the assessment of tax penalty and interest such revocation would only
take effect ex post from the date of revocation. Please note again, however, a Non-Binding View,
although it would provide the taxpayer with a stronger base of defense before a tax court, does not
legally deprive the tax authority of its right to still assess principal tax.
Contact Information
Ali Sanver
asanver@pekin-pekin.com
Pekin & Pekin
10 Lamartine Caddesi
Taksim
Istanbul, 34437
Turkey
Tel 90.212.313.3500 Fax 90.212.313.3535
www.pekin-pekin.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 98
© 2012 Lex Mundi
Tax Rulings
United Arab Emirates
Prepared by Lex Mundi member firm Afridi & Angell
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
There is no corporate or personal income tax in the UAE (with a limited exception on the income of
branches of foreign banks and oil companies). Accrodingly, there is no developed tax practice or
system of tax rulings.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
See answer to 1 above.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
See answer to 1 above.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The limited taxation on foreign banks and oil companies is implemented without prescribed rules and
regulations or procedures.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
We are not aware of any litigation or disputes involving the limited taxation described above.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Not applicable.
www.lexmundi.com
Page 99
© 2012 Lex Mundi
Contact Information
Bashir Ahmed
bahmed@afridi-angell.com
Afridi & Angell
Emirates Towers Offices - Level 35
Sheikh Zayed Road
Dubai,
United Arab Emirates
Tel 971.4.330.3900 Fax 971.4.330.3800
www.afridi-angell.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 100
© 2012 Lex Mundi
Tax Rulings
USA, Alabama
Prepared by Lex Mundi member firm Maynard Cooper & Gale, P.C.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. In the State of Alabama, taxpayers have the right to request a revenue ruling under Ala. Code s.
40-2A-5.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
In the State of Alabama, the list of topics for which revenue rulings may be issued is quite broad and
includes rulings "describing the substantive application of any law or regulation administered by the
[Alabama Department of Revenue]." Ala. Code s. 40-2A-5. There are limited exceptions for which
rulings are may not be issued for those cities and counties that self-administer their tax assessment
and collection function through private auditing firms.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Revenue rulings in the State of Alabama are binding on the Alabama Department of Revenue, the
State of Alabama and its political subdivisions as to the Department's interpretation of laws and
regulations as applied to the particular facts in the ruling request; however, revenue rulings may be
revoked or modified. Such revocation or modification may only be prospective unless certain facts
exist such as the requesting party misspoke the facts or the ruling was for a matter involving the
computation of taxes for the year in which the ruling was issued. Any retroactive revocation or
modification may be appealed to the Alabama Administrative Law Division.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Under the Alabama Taxpayers' Bill of Rights and Uniform Revenue Procedures Act itself, there is no
deadline for revocation of a revenue ruling in the State of Alabama. Such revocation may be initiated
at any time.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
A taxpayer does not appear to have any legal defense to the prospective revocation of a revenue
ruling in the State of Alabama.
www.lexmundi.com
Page 101
© 2012 Lex Mundi
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
In the State of Alabama, a revocation of a revenue ruling is prospective only unless specific criteria
listed in the statute can be shown justifying retroactive revocation, subject to certain constitutional
constraints.
Contact Information
Tom Brinkley
tbrinkley@maynardcooper.com
Maynard Cooper & Gale, P.C.
2400 Regions Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203-2618
USA
Tel 1.205.254.1000 Fax 1.205.254.1999
www.maynardcooper.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 102
© 2012 Lex Mundi
Tax Rulings
USA, Arkansas
Prepared by Lex Mundi member firm Rose Law Firm, a Professional Association
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, taxpayers have the right under regulations promulgated by the Department of Finance and
Administration to request a legal opinion.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Legal opinions are limited to sales and use tax issues.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The effect of legal opinions may change at any time as a result of legislative action, court
interpretation and changes in the regulations.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
The opinion can be revoked due to a change in law or regulation without actual notice to any holder of
a legal opinion.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
No.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
A revocation is not retroactive.
www.lexmundi.com
Page 103
© 2012 Lex Mundi
Contact Information
Paul Parnell
pparnell@roselawfirm.com
Rose Law Firm, a Professional Association
120 East Fourth Street
Little Rock, Arkansas 72201
USA
Tel 1.501.375.9131 Fax 1.501.375.1309
www.roselawfirm.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 104
© 2012 Lex Mundi
Tax Rulings
USA, Georgia
Prepared by Lex Mundi member firm Alston & Bird, LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, as a right granted by tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Any tax legal issue.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings are normally regarded as binding absent a change in law. Revocations are prospective
only absent a misstatement of material fact in the ruling request.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No deadline.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Gable Industries, Inc. v. Blackmon, 233 Ga. 542 (1975) supports the general proposition that
taxpayers should be able to rely on DOR rulings and regulations.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
In general, the DOR will only revoke prospectively absent a material factual misstatement or omission
in the ruling request.
www.lexmundi.com
Page 105
© 2012 Lex Mundi
Contact Information
Michael T Petrik
mike.petrik@alston.com
Alston & Bird, LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
USA
Tel 1.404.881.7000 Fax 1.404.881.7777
www.alston.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 106
© 2012 Lex Mundi
Tax Rulings
USA, Hawaii
Prepared by Lex Mundi member firm Case Lombardi & Pettit A Law Corporation
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Hawaii taxpayers have the right to request a ruling from the Hawaii State Department of Taxation
(Department). Section 231-3(3) of the Hawaii Revised Statutes (HRS) authorizes the Department to
“construe the tax and revenue laws . . . whenever requested by any officer acting under those laws,
or by an interested person.” It also grants the Department the power to adopt rules to carry out the
purposes of the Department and to regulate tax procedures. (HRS § 231-3(9)). The Department
provides tax rulings in one of four forms: written opinion rulings, determination letters, information
letters, and oral advice. (Hawaii Administrative Rules § 18-231-19.5; Tax Information Release (TIR)
No. 2009-01, Section 2). A written opinion is a determination issued by the Rules Office in response
to a written inquiry from taxpayer about its tax status or the tax consequences of its acts, prior to the
filing of returns, in areas where the interpretation of the tax law is unclear. (HRS § 231-19.5(b)). A
determination letter is issued by the Rules Office and applies clearly established principles (based on
statutes, regulations, conclusions other rulings, or court decisions that represent the positions of the
Department) to a specific set of facts. (HRS § 231-19.5(b)(3)). An information letter addresses a
clearly established principle without applying it to specific facts and is issued if the taxpayer’s inquiry
indicates a need for general information. (HRS § 231-19.5(b)(2)). Lastly, Department employees may
orally discuss with taxpayers or their representatives substantive issues, but such a discussion will
not be binding on the Department. (TIR No. 2009-01, Section 2.04).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
In general, taxpayers may request a ruling on any matter relating to Hawaii tax laws within the
jurisdiction of the Director of Taxation and the Department. These issues include, but are not limited
to: (a) Individual in-come tax; (b) Corporate tax; (c) Franchise or public service company tax; (d)
General excise, use, transient accommodations, or other taxes; (e) Tax accounting; (f) Pass-through
entities; (g) Tax exempt, governmental, and charitable organization taxation; or (h) Procedural
information. (TIR No. 2009-01, Section 3). Under certain circumstances, however, the Department will
not issue written opinions or determination letters. These situations include: (a) an issue that is
already under examination or consideration or in litigation; (b) an issue that involves two entities and
there is a question of whether a person in an employee or independent contractor, whether an
agency relationship has been created, or whether a partnership exists; (c) business, trades, industrial
associations, or similar groups requesting application of the tax laws to members of the group; (d)
where the request does not address the tax status, liability, or reporting obligations of the requester
directly; (e) “frivolous issues,” which are without basis in fact or law, or that espouse a position which
has been held by the courts to be frivolous or groundless; or (f) alternative plans or hypothetical
situations. (TIR No. 2009-01, Sections 4.01-.07).
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
In general, a taxpayer may rely on a letter ruling or determination letter received from the Rules Office
as definitive, subject to the modification and revocation rights of the Department (TIR No. 2009-01,
www.lexmundi.com
Page 107
© 2012 Lex Mundi
Sections 7.01, 8.01 ). Additionally, a taxpayer may rely upon a ruling issued to another taxpayer to
the extent that the taxpayer’s facts and circumstances are the same as those in the written opinion,
although the ruling may not be used or cited as precedent in any court. (Hawaii Administrative Rule
(HAR) § 18-231-19.5-10). An information letter or oral advice is advisory only and has no binding
effect on the Department. The Department may revoke or modify any letter ruling found to be in error
or not in accord with the current views of the Department. (HAR § 18-231-19.5-03). There is no court
approval requirement.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no deadline for the Department to start a tax ruling revocation process. The Department has
the authority to revoke or modify a ruling at any time the ruling is found to be in error or no longer in
accord with the current views of the Department. (HAR § 18-231-19.5-03). A letter ruling may be
revoked or modified by: (a) a letter giving notice of revocation or modification to the taxpayer to whom
the letter ruling was issued; (b) the enactment of legislation; (c) a decision of any court; (d) the
issuance of regulations; or (e) the issuance of statement by the Department, for example, in a tax
information release or announcement. (TIR No. 2009-01, Section 7.04).
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
There is no statutory right of appeal based solely upon the Department’s revocation or modification of
a ruling. If an assessment is issued to a taxpayer as a result of the revocation or modification, the
taxpayer has a right to appeal the assessment, either to the board of review or to the tax appeal
court. (HRS §§ 232-15,16). Taxpayers also have a right to request a meeting with the auditor or
collector, their supervisor, or senior management to discuss the assessment if they do not agree with
the tax assessment. Taxpayers have a right to request that the Department of Taxation waive
penalties and interest added to any tax if the taxpayer can show that failure to file a return or pay a
tax on time was due to reasonable cause, i.e., not due to the taxpayer’s own carelessness, neglect,
or willful disregard of the law, but due to circumstances beyond the taxpayer’s control.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
If a ruling is revoked or modified, the revocation or modification applies to all years open under the
period of limitations unless the Department limits the retroactive effect. (TIR No. 2009-01, Section
7.04). The Rules Office will revoke or modify a ruling and apply the revocation retroactively to the
taxpayer for whom the ruling was issued if there has been a material change in facts. This occurs
when: (a) there has been a misstatement or omission of controlling facts; or (b) the facts at the time of
the transaction are materially different from the controlling facts on which the letter ruling was based;
or (c) if the transaction involves a continuing action or series of actions, the controlling facts change
during the course of the transaction. (TIR No. 2009-01, Section 7.05). Where the revocation or
modification of a ruling is for reasons other than a change in facts, it will generally not be applied
retroactively; provided that (a) there has been no change in the applicable law; (b) the ruling was
originally issued for a proposed transaction; and (c) the taxpayer directly involved in the letter ruling
acted in good faith, and revoking or modifying the ruling retroactively would be to the taxpayer’s
detriment. (TIR No. 2009-01, Section 7.06). If a ruling is issued covering a continuing action or series
of actions and the ruling is later revoked or modified, the change will ordinarily only become effective
as of the date of revocation or modification and have no effect on the earlier actions. (TIR No. 200901, Section 7.08).
www.lexmundi.com
Page 108
© 2012 Lex Mundi
Contact Information
Lauren R. Sharkey
lsharkey@caselombardi.com
Lisa K. Johnson
LJohnson@caselombardi.com
Case Lombardi & Pettit A Law Corporation
Pacific Guardian Center, Mauka Tower
737 Bishop Street, Suite 2600
Honolulu, Hawaii 96813-3283
USA
Tel 1.808.547.5400 Fax 1.808.523.1888
www.caselombardi.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 109
© 2012 Lex Mundi
Tax Rulings
USA, Idaho
Prepared by Lex Mundi member firm Hawley Troxell Ennis & Hawley, LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. Statutory. Idaho Code Sections 67-5232 and -5255.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The Idaho State Tax Commission can decline to issue a ruling in certain circumstances. See Idaho
State Tax Commission Adminstrative and Enforcement Rule 110.03.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
They can be withdrawn. No tax court authorization is required. See Idaho State Tax Commission
Adminstrative and Enforcement Rule 110.05 and 110.07.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There is no deadline. See Idaho State Tax Commission Adminstrative and Enforcement Rule 110.05
and 110.07.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Judicial review may be available. See Idaho State Tax Commission Adminstrative and Enforcement
Rule 110.07. Further, Idaho State Tax Commission Adminstrative and Enforcement Rule 110.05
provides in part "If the petitioner has relied on the declaratory ruling in good faith, the Tax
Commission may not assess any tax liability accruing between the dates the declaratory ruling was
issued and its withdrawal."
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Idaho State Tax Commission Adminstrative and Enforcement Rule 110.05 provides in part "If the
petitioner has relied on the declaratory ruling in good faith, the Tax Commission may not assess any
tax liability accruing between the dates the declaratory ruling was issued and its withdrawal."
www.lexmundi.com
Page 110
© 2012 Lex Mundi
Contact Information
John McGown
jmcgown@hawleytroxell.com
Hawley Troxell Ennis & Hawley, LLP
877 Main Street
Suite 1000
Boise, Idaho 83702
USA
Tel 1.208.344.6000 Fax 1.208.954.5249
www.hawleytroxell.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 111
© 2012 Lex Mundi
Tax Rulings
USA, Kansas
Prepared by Lex Mundi member firm Foulston Siefkin LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Any tax topic, other than property tax valuation rulings.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Can be revoked by issuing agency.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Generally no deadline.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Rulings generally revoked only due to material change or misrepresentation in facts or law.
Taxpayers are informally offered opportunity to submit additional facts/legal arguments. Revocation is
rare.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Depends on reason for revocation. If material misrepresentation/change in facts, revocation is
retroactive as if not issued. If change in law, revocation tends to be prospective (or from date law
changed) only.
www.lexmundi.com
Page 112
© 2012 Lex Mundi
Contact Information
Christopher M. Hurst
churst@foulston.com
Foulston Siefkin LLP
Commerce Bank Center
1551 N. Waterfront Parkway, Suite 100
Wichita, Kansas 67206-4466
USA
Tel 1.316.267.6371 Fax 1.316.267.6345
www.foulston.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 113
© 2012 Lex Mundi
Tax Rulings
USA, Louisiana
Prepared by Lex Mundi member firm Jones Walker
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
The Louisiana Constitution, Louisiana Revised Statutes and local tax ordinances do not provide for
the right to request a formal, binding ruling from the Louisisna Department of Revenue (state-level
taxes) or local taxing authorities (local-level taxes). The Louisiana Taxpayer Bill of Rights (La. R.S.
47:15), however, provides that taxpayers have the right to prompt and accurate answers to their
questions in accordance with applicable policies and procedures of the Louisiana Department of
Revenue (the "Department") and the right to ask for and receive assistance in complying with the tax
laws, rules and regulations in Louisiana. La. R.S. 47:15(3) and (4). Despit the pronouncement in the
Taxpayer Bill of Rights, the Louisiana Department of Revenue has temporarily suspend its practice of
issuing private letter rulings. Rev. Info. Bull. No. 10-024 (10/1/10). The administrative provisions
regarding the issuance of various types of guidance by the Department are set forth in the Louisiana
Administrative Code ("LAC") Title 61, Part III, Chap. 1, Sec. 101. The regulation identifies the types of
administrative guidelines the Department will issue regarding state-level tax matters. Although the
Louisiana Department of Revenue has suspended the issuance of private letter rulings, it still issues
and publishes Revenue Rulings, Statements of Acquiescence or Nonacquiescence, Policy and
Procedure Memoranda and Revenue Information Bulletins on various topics. In addition, the
Department provides informal advice to specific taxpayers regarding specific questions. These forms
of advice by the Department are referred to as "declaratory rulings," are not agency rules, do not
have the force and effect of law and are not binding on the public. A private letter ruling issued by the
Department is binding on the Department only as to the taxpayer that requested the ruling and only if
the facts provided by the requesting taxpayer are truthful and complete and the transaction is carried
out as proposed in the request. A Revenue Ruling, a private letter ruling and a Statment of
Acquiesence or Nonacquiescence are binding on the Department until superceded or modified by a
subsequent change in a statute, regulation, declartory ruling, or court decision. Revenue Information
Bulletins are not binding on the Department or the public. The Department's Declaratory Statements
are posted on the Department's web site at www.rev.state.la.us. In Louisiana, parish sales/use taxes
are separately administered by local tax collectors. Although there is no formal process for issuing
private letter rulings at the local level, some local tax administrators will provide written guidance to
taxpayers on specific issues. In addition, Declaratory Statements issued by the Department with
respect to sale/use tax issues may provide guidance to taxpayers and local taxing authorities on
common sales/use tax issues, but such Declaratory Statements issued by the Department are not.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Please see response to Question 1, above. The Department administers all state-level taxes,
including income, franchise, sales/use, severance and motor fuels. Therefore, the Department issues
Declartory Statements with respect to all of the taxes it administers. Local tax administrators are
responsible for collecting and administering parish sales/use and occupational license taxes. To the
extent a local tax administrator issues rulings, they are limited to local sales/use and occupational
license taxes.
www.lexmundi.com
Page 114
© 2012 Lex Mundi
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
See response to Question 1, above. Declaratory Statements do not have the force and effect of law,
but all Declaratory Statements, other than Revenue Information Bulletins, are binding on the
Department until superceded or modified by a subsequent change in a statute, regulation, declartory
ruling, or court decision. A taxpayer, however, is free to challenge a ruling issued by the Department.
The Department may revoke a ruling without authorization by the Louisiana Board of Tax Appeals or
any other agency. At the local level, there is nothing in the law that requires local tax administrators to
issue published or private rulings. In addition, there is nothing int he law that would make any such
ruling issued by a local tax administrator binding on either the tax administrator or the taxpayer.
Consequently, the tax administrator can revoke a ruling at anytime without approval or oversight from
any governmental agency.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Not in Louisiana. See prior responses.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
While a taxpayer cannot stop the Department or a local taxing authority from revoking a tax ruling, the
taxpayer can challenge the Department's position that led to the revocation in court in a properly filed
judicial proceeding.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
There is no authority on this point. As a practicle matter, however, the revocation of a Declaratory
Statement issued by the Department would apply only on a prospective basis.
Contact Information
William M. Backstrom, Jr.
bbackstrom@joneswalker.com
Jones Walker
Place St. Charles
201 St. Charles Avenue, Suite 5100
New Orleans, Louisiana 70170-5100
USA
Tel 1.504.582.8000 Fax 1.504.582.8583
www.joneswalker.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 115
© 2012 Lex Mundi
Tax Rulings
USA, Missouri
Prepared by Lex Mundi member firm Armstrong Teasdale LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayers have a statutory right to request a ruling from the Missouri Department of Revenue.
Missouri letter rulings are granted pursuant to RSMo. Section 536.021.10 and Missouri Code of
Regulations 10-1.020.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The Missouri Department of Revenue may ("DOR") issue letter rulings on every tax issue. The DOR
may refuse to issue a letter ruling for "good cause" as defined in Missouri Code of Regulations 101.020(10). Additionally, when an issue presented in a letter ruling request is clearly covered by
statute, regulation, administrative rule or well-established principle, the DOR may decline to issue a
letter ruling and issue an information letter instead.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Letter rulings are definitive to the applicant only and bind the Missouri Department of Revenue for
three years. Letter rulings shall cease to be binding if a pertinent change is made in the (a) tax law,
(b) regulations, or (c) interpretation of the law by a court or administrative tribunal. See Missouri Code
of Regulations 10-1.020(8).
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
Ruling binding for three years except as set out above.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Ruling will be revoked per the above reasons.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Revocation because of change in law, regulation, or interpretation will be prospective.
www.lexmundi.com
Page 116
© 2012 Lex Mundi
Contact Information
Joseph D. Demko
jdemko@armstrongteasdale.com
Guy A. Schmitz
gschmitz@armstrongteasdale.com
Armstrong Teasdale LLP
7700 Forsyth Boulevard
Suite 1800
St. Louis, Missouri 63105-1847
USA
Tel 1.314.621.5070 Fax 1.314.621.5065
www.armstrongteasdale.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 117
© 2012 Lex Mundi
Tax Rulings
USA, New Mexico
Prepared by Lex Mundi member firm Rodey Law Firm
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
New Mexico taxpayers have the right to request a written ruling from the New Mexico Taxation &
Revenue Department pursuant to a Department regulation, NMAC 3.1.2.8.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
A taxpayer may request a ruling from the New Mexico Taxation and Revenue Department of any
statute the administration or enforcement of which is charged to the Department. NMAC 3.1.2.8(A).
Note, however, that the Department is not required by statute or regulation to issue any ruling, even if
the request is in proper form. NMAC 3.1.2.8(E).
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
The New Mexico Taxation and Revenue Department has the authority to modify or withdraw any
previously-issued ruling, and is required to do so when subsequent legislation, regulations, final court
decision, or other rulings have invalidated a ruling in whole or part. NMAC 3.2.1.8(D).
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Under NMSA §7-1-60 (1978) of the New Mexico Tax Administration Act, the New Mexico Taxation
and Revenue Department is estopped from withholding the relief requested if the taxpayer can show
that its action or inaction was in accordance with a ruling addressed to that taxpayer, unless the ruling
had been modified, withdrawn, or superseded by regulation or by another ruling addressed to that
taxpayer at the time the asserted liability arose.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
See answer to #5, above.
www.lexmundi.com
Page 118
© 2012 Lex Mundi
Contact Information
R. Tracy Sprouls
tsprouls@rodey.com
Rodey Law Firm
201 Third Street, N.W.
Suite 2200
Albuquerque, New Mexico 87102
USA
Tel 1.505.765.5900 Fax 1.505.768.7395
www.rodey.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 119
© 2012 Lex Mundi
Tax Rulings
USA, North Carolina
Prepared by Lex Mundi member firm Womble Carlyle Sandridge & Rice LLP
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. State law (G.S. 105-256(a)(5)e) has long required the State Department of Revenue to annually
prepare and publish a “Taxpayer’s Bill of Rights,” which is to include, inter alia, an explanation of the
procedures involved in requesting “information, assistance, and interpretations” from the Department.
Though the “Taxpayer’s Bill of Rights” is prepared and published annually, it contains no procedural
guidance on ruling requests (only on general tax information), and is therefore arguably prepared and
published in violation of the law.
However, the Department has issued a revised Sales and Use Tax Bulletin, and a “Private Letter
Rulings Policy” in December 2009, in response to certain recent statutory changes relating to ruling
requests (see below).
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
The apparent context of the Taxpayer Bill of Rights statute (cited above) is all state-level taxes, or at
least all state-level taxes administered by the State Department of Revenue. Local taxes are imposed
in North Carolina and localities rarely if ever issue rulings or even entertain ruling requests, absent a
special project in which the locality is particularly interested (as in certain economic development
projects) or a special relationship with the local government attorney. However, North Carolina has a
few local taxes that are merely local counterparts to a state tax, and G.S. 105-264.1 states that
rulings issued by the Secretary relating to one of these state tax counterparts will also apply to the
corresponding local tax.
Additionally, certain state taxes such as some insurance and vehicle-related taxes are actually
administered by an agency other than (or sometimes jointly with) the State Department of Revenue.
In these cases, the ruling procedures are often more unclear, though the other agency may have
more definitive guidance on rulings, which if available is typically found in the form of a regulation.
Matters which are currently under administrative protest or are the subject of pending litigation are not
appropriate subjects for a ruling and will generally not be entertained.
Additionally, a requesting party may only inquire as to its own tax treatment; for example, a
requesting party typically cannot get a ruling as to one of its vendor’s obligations to collect sales tax
from the requesting party, but could ordinarily get a ruling as to its own obligation to remit tax to the
State.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Statutory and administrative authority relating to ruling requests, and permitting the State Department
of Revenue to “chang[e] an interpretation,” has been revised several times over the last few years.
www.lexmundi.com
Page 120
© 2012 Lex Mundi
See G.S. 105-264, Sales and Use Tax Bulletin Sec. 34-15, and the Department’s “Private Letter
Rulings Policy” issued in December 2009.
As before, these changes in agency interpretations can take two basic forms: an interpretive change
that is actually forced by a truly “legal” change, and a technical interpretive change or “clarification”
pursuant to which the Department of Revenue takes the position that the prior guidance is not binding
in the manner in which had been previously assumed.
The primary example of an actual legal change (the first category), arises when the statute in
question or the constitution has either been amended, or altered by official judicial interpretation. As
before, unless otherwise stipulated in the amendment or judicial interpretation, this type of change
would typically apply prospectively only (with immediate effect as of the date of the action causing the
change).
The second revocation category (Department technical clarification) is far more common. A taxpayer
can only rely a ruling, and have attributable tax assessments and penalties abated, when that
particular taxpayer requests specific advice based upon a full disclosure of all relevant facts, when
that particular taxpayer’s reliance upon the guidance was reasonable, and was in strict conformity
with the guidance provided. Until recently, both the taxpayer’s ruling request and the Department’s
response had to be in writing to be legally reliable. Recent amendments now state that verbal
guidance from the Department is reliable as well, but only as long as “the Department’s records
establish that [this guidance was in fact provided and that] the Department provided erroneous verbal
advice.” As a practical matter, reliance upon the Department’s own recordkeeping is not advisable,
and so written ruling requests for written ruling responses are generally recommended. Importantly,
whether the guidance is given verbally or in writing, it technically must be given to a taxpayer that
disclosed his or its identity.
The Department issued a “Private Letter Rulings Policy” in December 2009 which also added the
following stipulations:






In addition to having to identify itself, a taxpayer “should” provide its address, phone number,
and its social security number or taxpayer identification number.
“Whenever possible,” the taxpayer should also identify any other affected third parties, by
providing the same categories of identifying information.
If a contract or other document is relevant to the tax question (which often is the case,
although many taxpayers are unaware of this), a copy “must” be provided.
If the taxpayer is represented by a tax professional, the request “must” be accompanied by
an interpretation of relevant legal authority. Unrepresented taxpayers are nevertheless
“encouraged” to provide their own legal intretations as well.
The taxpayer must state whether the taxpayer is currently under audit by or in litigation with
the Department, and specify the subject matter of any audit or litigation.
The taxpayer must identify any deduction or claim for refund the Department has denied the
taxpayer which relates to the taxpayer’s inquiry.
In summary, many taxpayers can fall victim to unreasonable reliance by relying upon a ruling (a)
issued to another taxpayer; (b) issued to them but on a “no name disclosed” basis; (c) when less
than all material facts were disclosed; (d) when the original facts have changed; or (e) when the ruling
response was ambiguous or unwritten( or, under the new procedures, verbal but unrecorded or
inaccurately recorded in the Department’s records). Reliance upon prior audit treatment is
commonplace but risky. In practice, taxpayers routinely reply upon “legally insuffiecient” guidance, but
they do so at their own risk.
www.lexmundi.com
Page 121
© 2012 Lex Mundi
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
None, other than as may be implicit in any applicable statute of limitations. As an apparent result of
the recent statutory changes referenced above, ruling requests typically take a much, much longer
time to be processed by the State Department of Revenue. A waiting period of a few to several
months is not uncommon, and in some cases ruling responses have taken over a year. As a practical
matter, turnaround time can of course be influenced by several factors: the relationship that the
requesting parties or their agents have with the Department, the complexity of the issues presented,
whether a similar question has been raised in a currently pending protest or appeal, and whether the
Department’s response is likely to subject the State to a claim for a refund from the requesting party
(or similarly situated taxpayers).
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Other than a defense authorized by strict compliance with G.S. 105-264 and perhaps with the
administrative authority cited above, there are no legal defenses as a practical matter. Equitable
defenses can include estoppel and laches, but these are very difficult to raise against the
government. In practice, the State Department of Revenue, in the exercise of its discretionary
enforcement functions, may provide the taxpayer a break in the form of a waiver of penalties and
occasionally taxes and interest, but this treatment is not guaranteed and when it is offered it is usually
offered in exchange for an agreement to prospectively comply with the Department of Revenue’s
(taxpayer-adverse) interpretation.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Please see above, particularly Response 3.
Contact Information
Neill Edwards
nedwards@wcsr.com
Womble Carlyle Sandridge & Rice LLP
One West Fourth Street
Winston-Salem, North Carolina 27101
USA
Tel 1.336.721.3600 Fax 1.336.721.3660
www.wcsr.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 122
© 2012 Lex Mundi
Tax Rulings
USA, Puerto Rico
Prepared by Lex Mundi member firm McConnell Valdés LLC
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. Granted by tax law.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Limited to certain topics (Puerto Rico Treasury Department Circular Letter 99-01).
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
They can be revoke by the tax authorities without court authoritzation.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Administrative appeal process and judicial review.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Generally, prospective application, unless revokation is due failure to comply with terms of the ruling
or fraud.
Contact Information
Juan Luis Alonso
jla@mcvpr.com
McConnell Valdés LLC
270 Muñoz Rivera Avenue
San Juan, Puerto Rico 00918
USA
Tel 1.787.759.9292 Fax 1.787.759.9225
www.mcvpr.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 123
© 2012 Lex Mundi
Tax Rulings
USA, South Carolina
Prepared by Lex Mundi member firm Wyche, P.A.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, by statute.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Department of Revenue won't issue rulings as to: * hypothetical issues * issues under audit * federal
tax issues * situations where the law, regulations are clear.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Can be revoked by Dept. of Revenue if facts misrepresented.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
Taxpayer could challenge revocation in an ALJ (administrative law judge) action.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Taxpayer cannot rely on the ruling.
Contact Information
Cary Hall
chall@wyche.com
Wyche, P.A.
44 East Camperdown Way
P.O. Box 728
Greenville, South Carolina 29601-3512
USA
Tel 1.864.242.8200 Fax 1.864.235.8900
www.wyche.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 124
© 2012 Lex Mundi
Tax Rulings
USA, South Dakota
Prepared by Lex Mundi member firm Lynn, Jackson, Shultz & Lebrun, P.C.
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Taxpayer has the right to request written advice from the Department of Revenue and Regulation.
SDCL 10-59-27.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Any tax issue.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Written advice can be rescinded by a change in statutory law or reported case law, by a change in
federal interpretation in cases if the department's written advice was predicated upon a federal
interpretation or by a change in material facts or circumstances relating to the taxpayer. SDCL 10-5927.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
No. The taxpayer can comply and obtain an administrative hearing on liability for the tax.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
Revocation takes effect from the date of revocation.
www.lexmundi.com
Page 125
© 2012 Lex Mundi
Contact Information
Haven Stuck
hstuck@lynnjackson.com
Lynn, Jackson, Shultz & Lebrun, P.C.
909 Saint Joseph Street, Suite 800
Rapid City, South Dakota 57709
USA
Tel 1.605.342.2592 Fax 1.605.342.5185
www.lynnjackson.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 126
© 2012 Lex Mundi
Tax Rulings
USA, Utah
Prepared by Lex Mundi member firm Van Cott, Bagley, Cornwall & McCarthy
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes. Both federal and state authorites permit tax rulings as a matter of tax law, but it is not a
constitutional right in either case.
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Rulings can be obtained on most topics, but the tax authorities do have limited areas where they will
not give a ruling, and they can refuse to rule in any given case.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
Tax rulings can only be relied upon by the party receiving the ruling. Tax rulings can be revoked, but
unless there was fraud or failure to disclose relevant information at the itme of the ruling, a revocation
will not normally be applied to any transaction undertaken by the taxpayer receiving the ruling when
that taxpayer relied on the ruling and either completed or irrevocably committed to the transaction
prior to the date of revocation. Tax court authorization is not required for a ruling revocation.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
There are no deadlines for tax authorities to revoke a ruling.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
The tax authority has the independent right to revoke a ruling and the taxpayer can not stop a
revocation. However, the taxpayer can still take the position on its returns and (if challenged) in court
that the revoked ruling was, in fact, correct. If the taxpayer obtaining the ruling acted in reliance on
the ruling prior to revocation, that taxpayer only can also argue that the taxing authority should not be
allowed to withdraw the ruling with respect to the transaction which relied on the ruling on grounds of
fairness.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
For taxpayers relying on a ruling given to another taxpayer, any revocation can be retroactive with the
same result as if the ruling were never given. For the taxpayer who obtained the ruling, a revocation
is given retroactive effect only in rare cases, such as where important information was omitted or
misrepresented in the ruling request.
www.lexmundi.com
Page 127
© 2012 Lex Mundi
Contact Information
Robert P. Lunt
rlunt@vancott.com
Van Cott, Bagley, Cornwall & McCarthy
36 South State Street
Suite 1900
Salt Lake City, Utah 84111
USA
Tel 1.801.532.3333 Fax 1.801.534.0058
www.vancott.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 128
© 2012 Lex Mundi
Tax Rulings
Venezuela
Prepared by Lex Mundi member firm Hoet Pelaez Castillo & Duque
1. Do taxpayers have the right to request a ruling from the tax authorities? If yes, please clarify if
it is a constitutional right or if it is granted by tax law.
Yes, the right to request a ruling from the tax authorities is granted by the tax law in articles 230-235
of the Organic Tax Code, by means of a "consultation procedure".
2. Is the issuance of tax rulings limited to certain topics, or can they be obtained on every tax
issue?
Taxpayers may obtain tax rulings on any tax issue. For that purpose, it is necessary to file a written
request, including the interpretation of the topic by the taxapyer. The relevant tax authority must
answer within a 30 day period. If the tax authority does not answer within the 30 day period
mentioned above, no sanction or fine will be applicable to the taxpayer, for any action taken applying
the interpretation the taxpayer set forth in the written request.
3. Are tax rulings definitive or can they be revoked by the tax authorities? Is a tax court
authorization required to do so?
In Venezuela Tax Rulings are not definitive, therefore the tax authority may change its criterion any
time. However, the tax authority cannot impose any fine or sanction to the taxpayer who has applied
a tax interpretation set forth in a tax ruling, before the criterion had changed. On the other hand there
are no recourses against an opinion issued by the tax authorities interpreting the tax provisions.
4. Do tax authorities have a deadline to start a tax ruling revocation process? If so, please
describe the process and how long it takes.
No, as mentioned above, in Venezuela, Tax Rulings are not definitive and the Tax Authorities may
change its criterion any time. Therefore, if in a tax audit the Tax Adminsitration decides to apply a
different criterion.
5. Does the taxpayer have any legal defense against a tax authority attempting to revoke a tax
ruling? If so, please explain the defense.
In case the criteria established in a tax ruling obtained by a taxpayer has been changed and a tax
objection is imposed, the taxpayer could file all the administrative and judicial procedures available in
tax laws.
6. What is the effect of a revocation of a tax ruling? (i.e. Is the revocation retroactive with
resulting liability for the taxpayer- principle amount owing, interest, penalties, etc.- or does it
take effect only from the date of the revocation?)
If the tax authority changes its criterion, the taxpayer may be required to pay any non expired tax
difference resulting from the change of criterion and the corresponding interests. However, the tax
authorities may not impose any fine or sanction resulting from a revocation or change of criterion.
www.lexmundi.com
Page 129
© 2012 Lex Mundi
Contact Information
Carolina Cano
ccano@hpcd.com
Hoet Pelaez Castillo & Duque
Centro San Ignacio, Torre Kepler
Av. Blandín, La Castellana
Caracas, 1060
Venezuela
Tel 58.212.201.8611 Fax 58.212.263.7744
www.hpcd.com
This guide is part of the Lex Mundi Global Practice Guide Series which features substantive overviews of
laws, practice areas, and legal and business issues in jurisdictions around the globe. View the complete
series of Lex Mundi Global Practice Guides at: www.lexmundi.com/GlobalPracticeGuides
www.lexmundi.com
Page 130
© 2012 Lex Mundi