Export Taxes for Mining Companies that are Beneficiaries of Fiscal Stability

On November 19, 2013, the Argentine Supreme Court of Justice rendered a decision in the “Procesadora de Boratos Argentinos S.A. c/ DGA” (File TF 28.448-A) case, accentuating the criteria adopted in re: “Minera del Altiplano S.A. c/ Estado Nacional – PEN y Otra” (Case: 335:1315).
In re: “Procesadora de Boratos Argentinos S.A. c/ DGA”, due to the imposition of export taxes of 10% of the FOB value of exported minerals, the plaintiff filed an action before the Argentine Tax Court against the Custom Authority’s decisions that imposed said tribute. The plaintiff was a company which acquired the fiscal stability right established in Law No. 24,196; “fiscal stability” fixes taxes in force at the time the mining company submits its feasibility report for a period of 30 years.
While the Argentine Tax Court rendered a favorable decision for the plaintiff, Tribunal II of the Federal Court of Appeals in Contentious Administrative Matters revoked said decision. Therefore, the plaintiff filed an extraordinary appeal before the Supreme Court which confirmed the decision of the lower Court on the following grounds:
a)  According to the decision rendered in re: “Minera del Altiplano” neither the dispositions of Law No. 24,196 nor its regulation exempt the beneficiaries of said regime from the payment of new taxes, or any increase to existing taxes, after filing the feasibility study (Section 8, Law No. 24,196).
b)  Both Law No. 24,196, as well as  its regulation allude to the avoidance of increasing the “total tax burden” (Section 8, Law No. 24,196), for which it establishes a compensation or reimbursement procedure to recover payments made in excess by the company which is the beneficiary of fiscal stability right (Section 4.c, Annex I, Decree No. 2686/1993).
c)  As pointed out in “Minera del Altiplano” case, the State is not allowed to: (i) increase the “total tax burden” (Section 8, Law No. 24,196) to companies that are beneficiaries of fiscal stability under Law No. 24,196; or (ii) refuse the compensation or reimbursement of payments made in excess by the company (Section 4.c, Annex I, Decree No. 2686/1993).
d)  There is no conflict between the payment of exports rights and the regime of Law No. 24,196, given the fact that in the event that an increment of the “total tax burden” is demonstrated, the compensation or reimbursement procedure for payments made in excess must be applied in the terms and conditions established by the applicable rules.