Mexico’s Supreme Court of Justice published recently case decision P./J. 95/2009, titled “Recording Fees.Federal or local laws setting a fee based on the value of the transaction that gave rise to the recording, violate thetax collection principles of proportionality and equity.” In such precedent, Mexico’s highest court holds that feespaid to the treasury of the State are in consideration for administrative services rendered by the government to theindividuals that request such services in accordance with applicable tax collection doctrine and laws. The Courtexplains that such fees satisfy the tax collection principles of proportionality and equity provided in Mexico’sConstitution when: i) there is a reasonable balance between the fee collected and the service rendered; and, ii)those receiving the same type of service are treated equally. Given the above, the Highest Court ruled that thefederal or local laws that set fees for the registration, entry, cancellation or issuance of certificates with legalsignificance or public registry instruments on the basis of a percentage or a factor applied to the economic ormarket value of a transaction violate the tax collection principles of proportionality and equity when individualspaying such fees pay a greater or lesser amount depending on the value of the transaction that gave rise to suchrecording. Thus, such illegal fees lead to a situation in which a service that costs the governmental agency thesame to provide results in different payment amounts of recording fees depending on the value of the underlyingtransaction. This recent case decision opens the possibility to challenge unjustified recording fees set by thevarious public registries across Mexico which base such fees on the value of the transaction and not in terms ofthe cost to render such service.
