On June 10, 2015, the Constitutional Chamber of the Supreme Court of Justice admitted the unconstitutional action based on procedural irregularity against the legislative decree No.763 dated July 31, 2014, published in the Official Gazette No.142, volume No.404, of the same date, in which reforms to the tax code were made.

The reason of the unconstitutionality presented is the approval of the waiver to submit to vote the abovementioned legislative decree and to its approval, with the vote of five people who are not considered as members of Congress, since they were not elected in accordance with the Constitution because in the legislative elections of 2012, the citizens only voted for owning members of Congress and not for their alternates; therefore the legal procedures for approval were not followed by Congress through the majority of votes established and required by article 123 of the Constitution of the Republic of El Salvador.

The main tax reforms contained in the mentioned legislative decree that have been submitted to Constitutional control and review are the following:

  1. Article 62-A, which allows, in the subject of transfer pricing, the use of procedures, technical methods and guidelines established by the Organization for Cooperation and Economic Development (OCED).
  2. Article 120, which allows the tax authority to exchange tax information, and the signing of agreements for the exchange of information with other jurisdictions.
  3. Addition of Articles 149-D and 149-E, establishing control mechanisms and authorizations for POS devices, on which credit and debit card payments are made.
  4. Article 175, which extends the expiration of supervision faculties of the tax administration when a new audit is notified, for one more year.
  5. Article 219, that increases solvency requirements for customs tax obligations.
  6. The inclusion of Article 277-A, which allows publishing the names of tax payers filing a claim, making use of their constitutional right to file claims or motions in the Court of Appeals or in the Supreme Court of Justice, associating them as debtors of the State.

To consult the Constitutional Chambers writ of admission, please click here