Codere wins first victory in Mexican courts and could be exempt from paying $70M in taxes

Gambling company Codere seems to be closer to getting rid of the payment of more than MXN 1.2 billion ($70 million+) in taxes dating back to more than 15 years ago, which are being demanded by Mexico’s Ministry of Finance and Public Credit (SHCP).

This initial victory came after the Supreme Court of Justice of the Nation (SCJN) opened the possibility that the multinational company may not have topay this amount corresponding to taxes, penalties, updates and other fiscal obligations for 2008.

Codere had lost a lawsuit filed against the Federal Court of Administrative Justice (TFJA) and an amparo, for which it resorted to Mexico’s highest court to challenge the constitutionality of section 1, subsection C of article 57 of the Federal Law of Administrative Procedure, seeking a ruling that exempts it from paying the resources demanded by the SHCP, as reported by La Jornada.

In the past days, Ministers Luis María Aguilar Morales, Alberto Pérez Dayán, and Javier Laynez Potisek dismissed (by three votes against two) the appeal filed by the SHCP, while their colleagues Yasmín Esquivel Mossa and Lenia Batres Guadarrama assured that there were jurisprudential criteria that required the dismissal of the review requested by the gaming operator.

Now, Minister Juan Luis González Alcántara must resolve the appeal filed by Codere and prepare a draft ruling that determines whether or not to grant the federal court protection to the gambling company, or validate the arguments of the SHCP, proposing that the second chamber of the SCJN dismiss the motion filed by the company and confirm the ruling issued by the TFJA regarding the payment of MXN 1,272,385,927.

The Tax Administration Service (SAT) determined that Codere had a tax credit for MXN 561,371,682 initially and, in a first trial before the TFJA, the gaming company won the nullity of the resolution. But the SAT reinstated the audit procedure, exercised again its verification powers and determined that with time the company had a tax credit of MXN 1,272,385,927.

Due to this ruling, the company filed a new nullity trial, in which the validity of the SAT’s resolution was recognized, and against which it filed a direct appeal, which was denied.

After these resolutions, Codere challenged the constitutionality of Article 57, section I, paragraph c of the Federal Administrative Procedure Law, and was again denied the protection of justice.

As a result, the gambling company, with a presence in Mexico, Spain, Colombia, Argentina, Italy, and Uruguay, filed a new appeal for review before the Court against the ruling of the collegiate court, and the case was referred to Justice Gonzalez Alcantara.

Against the admission, the SHCP filed the aforementioned appeal, which was heard by Minister Aguilar Morales, who proposed to confirm such admission, which was approved by three out of five possible votes and it was accepted that the case be reviewed.