The Supreme Court of Justice Holds that Audits of the Same Fiscal Years and Tax Payments Violate Guaranties of Legal Security.

Through its decision on May 12, 2006 the Second Chamber of the Supreme Court of Justice of the Nation determined that it was unconstitutional forthe Taxpayer Administration Service (SAT) to exercise its audit authority two or more times with respect to the same fiscal year, in regard tothe same contributions currently permitted in Article 46 of the Fiscal Code of the Federation. The Supreme Court determined that the legalprovision mentioned above violates the guaranty against legal security, stating that if the audit authority of the Mexican tax agency isdiscretionary, its exercise is regulated by laws governing such authority, and once the tax service has exercised its audit authority in order toreview, prove, evaluate or confirm compliance with tax obligations, issuing a final decision to the corresponding taxpayer, in which case itdetermines a credit or charge applicable to the taxpayer, this concludes the matter. This means that once the tax service has issued aliquidating resolution, under no circumstances may such authority audit the same taxpayer for the same fiscal year, as such would beunconstitutional and possibly subject the taxpayer to constant interventions into its affairs, in addition to being an unwarranted return by thetax authorities to issues that have been already reviewed and determined by such authorities. Amparo under Revision 726/2006. TI GroupAutomotive Systems, S. de R.L. de C.V. Unanimous vote of four, May 12, 2006. Author of Decision: Sergio Salvador Aguirre Anguiano