Provincial Collection Regimes Face Supreme Court Scrutiny

On August 27, 2026, the Argentine Supreme Court issued two significant decisions in “Cannon Puntana Sociedad Anónima c/ Misiones, Provincia de s/ acción declarativa de certeza” and “Establecimiento Las Marías S.A.C.I.F.A. c/ Agencia Tributaria de Misiones A.T.M. s/ acción mere declarativa de inconstitucionalidad.” Both cases involved challenges to withholding, collection, and advance payment regimes applicable to the Turnover Tax (Impuesto sobre los Ingresos Brutos) in the Province of Misiones.

In both cases, the taxpayers had argued that Misiones' collection regimes applied to transactions carried out outside the province, which resulted in the accumulation of significant tax credit balances that were difficult, if not impossible, to recover.

The Court held that the claims raised a sufficient federal issue to fall within its original jurisdiction, as the dispute requires determining whether the challenged regimes affect constitutional principles relating to the free movement of goods, interprovincial commerce, and the prohibition of internal customs barriers. In “Establecimiento Las Marias,” the Court further noted that the dispute involved the territorial limits of provincial taxing powers, as the challenged regimes allegedly capture income derived from export activities carried out in other provinces.

The Court also issued favorable rulings regarding the injunctions the taxpayers sought:

•    In “Cannon,” the Court ordered the Province of Misiones to take the necessary measures to prevent the application of the withholding and collection regime established by General Resolution (DGR) 3/93 to activities carried out outside the province until a final judgment is rendered.
•    In “Establecimiento Las Marias,” the Court upheld the preliminary injunction previously granted, thereby maintaining the suspension of the challenged regimes, including withholding regimes, collection regimes, bank account collection mechanisms, and advance payments on goods entering the province.

These decisions are particularly relevant for companies that accumulate significant Turnover Tax credits as a result of provincial collection regimes. Although the Supreme Court has yet to rule on the merits of the dispute, the decisions represent an important precedent and strengthen taxpayers' ability to challenge provincial collection mechanisms on constitutional grounds. More importantly, they may reopen the door to the Court's original jurisdiction in disputes involving issues that currently represent a significant component of the tax burden Argentine companies face.