The Supreme Court of Justice Reaffirms its Holding in “Tradigrain”

On May 24, 2011, the Supreme Court ruled in the “Aceitera General Deheza S.A.” case, where it had to decide if an exporter was entitled to receive the “factor de convergencia”, a benefit as explained below, in connection with certain export transactions of agricultural products contained in Law No. 21,453.

It is worth remembering that Law No. 21,453 stipulates certain aspects of the export of some agricultural products, setting forth that such transactions have to be registered by submitting an affidavit. In addition, Decree No. 803, issued in year 2001, set forth a regime to promote exports through the payment of a benefit called “factor de convergencia”, that was applicable to the export of agricultural products.

Aceitera General Deheza S.A. requested the assessment and payment of the “factor de convergencia” in connection with certain export transactions, but the Customs Authority denied the payment of the benefit. The Authority argued that, even though the benefit was in force when the company closed the sales with the foreign buyer and registered the transactions through the submission of the affidavits, the benefit had been repealed by the time the company submitted the export permits to the Customs Authority.

The case was solved by the Supreme Court of Justice in favor of the company.

In this decision, the Supreme Court reaffirmed its holding in re “Tradigrain S.A.” (ruling dated December 10, 1997), where it had held that the tax treatment and the benefits applicable to the export of agricultural products under Law No. 21,453 are those in force at the date the deal is closed with the foreign purchaser and not those in force at the date the export transaction is performed.

This case is important because the Supreme Court reaffirms, with its current composition, the holding of a case solved in 1997.