The Constitutional Tribunal (TC) in Peru has put an end to the legal actions taken by some proprietors of casinos and slots operations to avoid paying gaming taxes. Both in Lima and in the provinces gaming companies have previously used the courts to obtain ‘acciones de amparo’ (protection under the law) with which they have suspended payment of taxes and continued to operate without fiscal oversight for years.

As a result, the TC has declared such actions invalid against taxation and clarified two important points. Firstly, that the basis of its ruling cannot be questioned and, secondly, that the law allows the taxes to be paid retroactively as the taxation levels had previously been reduced from 20% to 12%. According to constitutional Peruvian law, retroactivity is permissible when the action is favourable. In this manner, the declaration and payment of taxes has been confirmed as constitutional.

Peru’s highest authority has now validated two former resolutions emitted by the Tax Office, making them effective and operative. This sets an important precedent to ensure compulsory compliance, with no recourse to obtain contrary judgements in the courts. The ruling goes further, stating that judges must disallow any actions against the order and that all public bodies, including the courts, must uphold the TC’s ruling under penalty of prosecution for non-compliance. (E-02.21.06)

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