A significant intervention has seen the Supreme Court of Justice in Mexico take action in a bid to settle ongoing disputes between Codere SA and SHCP, Mexico’s Ministry of Finance and Public Funds.
It stems from SHCP demands that Codere pay taxes and surcharges for the year 2008, which the Ministry estimates to be MEX 1.2bn pesos (approximately €300m).
However, Codere claims it was exempt from tax obligations in 2008 due to an ‘amparo’ granted by Mexico’s Federal Court of Administrative Justice (TFJA).
The SHCP has once again begun with the dispute, off the back of a rise in Codere’s tax charge from MEX560m to 1.2bn pesos after a ‘new determination’ by the Tax Administration Service (SAT), increased.
The Ministry contends that the initial protection is no longer applicable given Codere’s increased tax obligation, providing the basis to demand the operator to settle its outstanding liabilities.
As the SHCP details, “Following the SAT’s reassessment, Codere’s subsequent nullity trial upheld the SAT’s resolution, and their direct protection appeal was denied.”
The SAT reinstated its inspection and determined a revised “tax credit of 1,272,385,927 pesos”. Dissatisfied, Codere pursued another annulment trial, which upheld the SAT’s resolution; subsequently, Codere appealed to the Supreme Court for direct protection against this outcome.
Codere has challenged the Supreme Court, questioning the constitutionality of specific sections of the Federal Law of Administrative Procedure to avoid paying the taxes demanded by the SHCP.
This appeal marks the first time Mexico’s Supreme Court will intervene in a legal dispute regarding gambling taxes.
In connection with the dispute, the Supreme Court held a preliminary judgement in which three ministers voted against the SHCP’s appeal, while two upheld the ministry’s right to its claim.
Codere possesses 135 permits to operate gaming arcades and bingo halls in Mexico, set to expire between 2027 and 2048.
2022 accounts saw Codere narrow its operating losses to €320m, following 2021 directives which saw the group consolidate its business by demerging its Codere Online unit and delisting from the Bolsa Madrid exchange.
