How General Resolution 5753/25 Impacts Pending Litigations

The case

The Argentine Tax Authority (ARCA) initiated a tax enforcement proceeding against Motomel SA to collect personal assets tax in its capacity as a substitute taxpayer. The company argued that the debt should be deemed extinguished through set-off, a mechanism that it had timely requested but that had been denied pursuant to the then-applicable General Resolution 1658.

While the case was pending, ARCA issued General Resolution 5753/2025, which amended the regime and expressly allowed substitute taxpayers to offset tax liabilities.

The decision

Although Federal Court 1 on Tax Enforcement Matters initially declared the consideration of the defenses raised by the defendant moot,^[1] it then clarified the scope of that decision, explaining that the ruling should be understood as a full validation of the set-off the taxpayer had requested.^[2] In other words, the regulatory change did not bring the dispute to an end on procedural grounds: it became a recognition of the validity of the taxpayer’s claim.

In a later ruling,^[3] the court rejected ARCA’s claim for interest. It emphasized that the defendant had requested the set-off before the tax liability became due and that the inability to extinguish the debt resulted only from the administrative denial of a mechanism whose applicability ARCA itself later recognized. Consequently, there was no taxpayer default that could justify the assessment of interest.

According to the court, allowing ARCA to collect interests under these circumstances would improperly shift to the taxpayer the economic consequences of an interpretative position adopted by the State and subsequently abandoned, which is contrary to the principles of good faith, legitimate expectations, legal certainty, and the doctrine prohibiting contradictory conduct.

Why is this ruling important?

This ruling demonstrates that a regulatory amendment does not, by itself, render a judicial dispute moot. On the contrary, when the regulatory change confirms the correctness of the position the taxpayer consistently maintained, it may constitute a genuine recognition of the taxpayer’s substantive right.

The ruling also establishes an important limitation on the tax authority’s ability to claim interests where the default is not attributable to the taxpayer but rather to the administration’s own actions. If the taxpayer attempts to extinguish the debt through a lawful mechanism and it is the tax authority that prevents such payment based on an interpretation it later abandons, there is no legally attributable default that could justify imposing compensatory interest.