Solidarity Contribution Does Not Apply to Non-Residents

The Solidarity Contribution was established through Law 27605, published in the Official Gazette on December 18, 2020, and became effective that day. This tax applies to the following individuals, based on their ownership of assets as of December 18, 2020:

• Individuals residents in Argentina: for all their assets in Argentina and abroad.
• Non-resident individuals: exclusively for their assets in Argentina.

The paragraph before the last of article 2 of Law 27605 establishes that the Solidarity Contribution taxpayer status is established by applying the residence criteria defined in articles 116 to 123 of the Income Tax Law in force in 2019 (and its amendments) as of December 31, 2019.

In the case "F., D. E. c/ EN – AFIP- Ley 27605 s/ proceso de conocimiento," the taxpayer had filed a request for a declaratory judgement with two purposes:

1. He requested the court to determine whether the taxpayer should be considered an Argentine resident for the purposes of applying the Solidarity Contribution (Law 27605), despite having lost his tax residence in Argentina after December 31, 2019, but before December 18, 2020 (date of publication and entry into force of the Law).
2. Alternatively, if interpreted that he should be considered an Argentine resident, he sought to establish whether it was constitutionally admissible for Law 27605 to have retroactive effects by considering as Argentine residents individuals who no longer had that status on the date of its effective entry into force. 

On November 29, 2019, the taxpayer notified the Argentine Tax Authority he had lost his tax residence as of November 13, 2019, requesting the cancellation of VAT (due to cessation of activities), income tax, and personal assets tax. He also reported that his country of residence was Uruguay and provided his tax identification number.

On July 3, 2020, the General Director for Consular Affairs and Relations of the Ministry of Foreign Affairs of Uruguay decided to grant permanent residence to Mr. D.E.F. in that country. On July 31, 2020, the taxpayer filed the request for permanent deregistration of Income Tax and Personal Assets Tax starting in July 2020. On August 2, 2020, he filed the request for retroactive cancellation of said taxes.

The Federal Administrative Court 7 held in its ruling that, given that the taxpayer had acquired Uruguayan resident status on July 3, 2020, and on July 31, 2020, he had reported his definitive deregistration due to becoming a resident in another jurisdiction for immigration purposes, it was unreasonable to classify him as an Argentine resident based on the retroactivity of the law to his status as a resident for income tax purposes as of December 31, 2019.

The Tax Authority filed an appeal against the ruling, and on August 28, 2025, Chamber 1 of the Federal Court on Administrative Matters decided on the matter. The Court understood that it was not disputed that the taxpayer obtained permanent residence in Uruguay and highlighted that the Argentine Directorate of Migration reported that between January 1, 2020, and December 18, 2020, he was in Argentina for only 19 days.

The Court held that the taxable event established by Law 27605 was set at December 18, 2020 (temporal aspect), as was the wealth being taxed (objective aspect, comprising all the assets of a person existing in the country and abroad, and valued on that date), but the determination of the residence of the taxpayer (subjective aspect) was set at December 31, 2019. Therefore, the Chamber held that the paragraph before the last of article 2 of Law 27605 was manifestly illegitimate and arbitrary. According to a proper interpretation of the principle of legality in tax matters, it involved an improper retroactive application of the law, affecting the right to private property protected by articles 14 and 17 of the Argentine Constitution.

Quoting the ruling of this Chamber in the case "Hahn, Nicolás Rodolfo v. EN - AFIP - res. 4236 s/ proceso de Conocimiento” (date of judgment: 05/27/2025), the Court emphasized that “the loss of the tax residence is not an inconsequential fact for the law, because it matters for those persons the acquisition of a new legal status that is part of the right to private property and that cannot be ignored by subsequent legal regulations.”

The Chamber emphasized that the retroactive application of the Solidarity Contribution to the situation of individuals as of December 31, 2019 is not lawful since on that date there was no emergency situation caused by COVID-19, which was the legislative grounds for Law 27605.

Chamber I upheld the position of the first instance court regarding the unreasonableness of considering residence as of December 31, 2019. It ruled that Mr. D.E.F. should be considered a “resident abroad” for the purposes of determining the tax base for the Solidarity Contribution.

This is an interesting precedent in the current debates against the Solidarity Contribution. It reinforces the application of the principle of non-retroactivity in tax matters, and the legal and tax effects derived from the loss of tax residence.