Consequences of Criminal Court rulings in the factual issues discussed in the Argentine Tax Court

On March 30, 2006, Division “C” of the Argentine Tax Court (“Tribunal Fiscal de la Nación”) ruled in the case “Apatur S.A. - Appeal – Income Tax”, where discussion was revolving around assessments related to Income Tax, Value Added Tax and Personal Assets Tax carried out by the fiscal authority.

Aside from the technical issues being discussed, the interesting question was that at the same time as proceedings were being carried before Argentine Tax Court, another file related to tax evasion was in course in a criminal court; and before the Argentine Tax Court ruled, the criminal court had absolved the tax payer.

Apatur, the tax payer, invoked this favorable ruling in the file before the Argentine Tax Court, making express reference to the accountant’s expert report, which was decisive for such holding, because it concluded that the facts alleged by the tax authority to construe the presumptions that led to the tax assessments did not exist.

The Argentine Tax Court, making a “prudent” interpretation of the Criminal Tax Law (“Ley Penal Tributaria”) understood that ignoring the criminal absolving sentence, which was not appealed by the fiscal authority, could lead to contradictory rulings. The Argentine Tax Court pointed out with special emphasis that in the criminal cause enough evidence was produced to dismantle the presumptions on which the tax authority had construed the tax assessments.

This sentence constitutes an important judicial precedent because the Argentine Tax Court stressed the importance of criminal court’s ruling as far as factual issues are concerned (i.e. facts and evidence) in order to rule on the technical issues it has to solve.