Decision No. 735 issued by the Constitutional Chamber of the Supreme Tribunal of Justice
The Constitutional Chamber of the Supreme Tribunal of Justice issued Decision No. 735 of October 25, 2017 [Case: Mercantil, C.A., Banco Universal vs. Banco Nacional de Vivienda y Hábitat (BANAVIH)], which established that the companies with a participation of the State in their capital, as well as the Municipalities as local political-territorial entities, will be given procedural privileges and prerogatives. Decision No. 735 was published in Official Gazette No. 41.289 of November 29, 2017.
The Chamber stated in said Decision No. 735 that the purpose of the contribution to the Mandatory Housing Savings Fund (Fondo de Ahorro Obligatorio de Vivienda - “FAOV”) is to establish mechanisms that assure access to a dignified housing unit by means of the individual savings of each contributor and not only the financing of a public entity. Also, the special nature of said contributions was established, which contributions are distributed in individual accounts that are not owned by the public entity that administers them in a regulated manner, but they are owned by each of the workers that are beneficiaries of the system.
Likewise, the Chamber stated that the contributions to the FAOV have been established as savings, which means that the legislator may not later modify said characteristic, given that the principle to the effect that workers’ labor benefits are progressive and workers’ labor rights may not be waived applies.
In this connection, the Constitutional Chamber stated that the interpretation made by the Political-Administrative Chamber that attempted to adjust the contributions to the FAOV to the tax system under a parafiscal nature conception is wrong, given that it conflicts with the fundamental principles of the social State supported by the National Constitution; then, said criterion must be reviewed and it must be established that the contributions to the FAOV, as part of the housing and habitat provision regime and of the social security system, do not harmonize with the parafiscal concept and, therefore, they are not governed by the tax system.
It is inferred from the foregoing that the controversies to which BANAVIH is a party, as savings entity, will not be processed in accordance with the provisions of the Tax Organic Code, but with those of the Organic Law of Administrative Proceedings.
Finally, the Constitutional Chamber ratified the jurisprudential criteria established in Decision No. 1681 of November 27, 2014 (Case: PDVSA PETRÓLEO S.A.) and Decision No. 1506 of November 26, 2015 (Case: Jesús Salvador Rendón Carrillo), in relation to the procedural prerogatives and privileges of the Republic, extendible to the State-owned companies, given that the Venezuelan State has a (majority or non-majority) participation in many companies and in the processes to which it is a party all relevant legal prerogatives must be applied to it; also, said prerogatives and privileges are extendible to the municipalities and states as local political-territorial entities.
In order to access Decision No. 735, please click here.
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