BUSINESS REASON. THE AUTHORITIES CAN CONSIDER THE ABSENCE OF BUSINESS REASON AS ONE OF THE ELEMENTS THAT DETERMINE THE LACK OF MATERIALITY OF AN OPERATION, CASE WHICH, THE BURDEN OF PROOF TO PROVE THE EXISTENCE AND REGULARITY OF THE OPERATION, IS THE TAXPAYERS.- Legally there does not exist a definition for the term business reason, however, in the financial jargon it is known as the motive to carry out an act, to which there is right to do so, related with a lucrative operation and steered to obtain revenue; meaning, it is the reason of existence of any lucrative company that seeks extraordinary revenue that directly benefits the shareholders and propitiates its value, creation and development for long term relationships with both clients and providers. Now, from the contents of the thesis 1a. XLVII/2009 emitted by the First Chamber of the Supreme Court of Justice, it can validly be concluded that the business reasons, are elements that can be taken into account by the tax authority to determine if an operation is artificial and in which case, will depend of the assessment of all the elements that the authority considered to support their conclusions over recognizing or not the tax effects of a specific act. Thus, the absence of business reason can be used by the authority to determine the nonexistence of an operation, as long as it is not the only element being considered to reach said conclusion; therefore, once the reasons for not recognizing the tax effects of the operations are supported, is the taxpayer burden to demonstrate the existence and regularity of the operation.

Administrative Proceeding Num. 4351/16-07-01-4-OT/1124/17-S1-04-04.- Solved by the First Section of the Superior Chamber of the Federal Court of Administrative Justice, in session August 15, 2017, solved unanimous with 5 votes in favor.- Reporting Judge: Rafael Anzures Uribe.- Secretary: Ana María Reyna Ángel. (The thesis was approved in session dated October 5, 2017)

F.C.A.J.J. form the Eighth Era. Year II. No. November 16, 2017. pg. 317