Tax litigation in Argentina becomes more expensive

The National Tax Court is a jurisdictional and technical entity that, though being part of the Executive Branch, is known for its impartiality. Its function is to solve appeals against certain acts of the National Tax Authorities (Administración Federal de Ingresos Públicos – AFIP), when exercising their fiscal powers. It constitutes the appellate court for taxes assessment and penalties application by Tax Authorities.

New Law No 25,964 repealed the previous Law No 22,610, which regulated the previous terms and conditions of the fee. Consequently some important provisions which had been in force since 1982 were modified. The most significant changes are:

(i) the tax rate increased from 2% to 2.5%;

(ii) the base on which the fee must be calculated has been broadened. The new rate is applied on the total disputed amount, which includes claimed capital, interest and possible penalties. Pursuant to the previous law, the calculation did not include penalties;

(iii) regarding the timing of the payment, the total amount must now be paid when first appearing before the court, despite later adjustments. In accordance with the previous law, 50% of the amount had to be paid at the moment of the appeal before the court, and the remaining 50% within the 5 following days of the notification of the decision, if the taxpayer’s plea failed;

(iv) the new law establishes a fixed fee of AR$ 80 for protection proceedings from the Tax Authority (amparos) regulated by the Tax Procedural Law No 11,683; these kind of proceedings were exempted from the fee under the provisions of the former law; and

(v) those going through civil or commercial insolvency proceedings can pay a 50% reduced fee.

Not paying the fee will not prevent the normal development of the trial before the National Tax Court, but will allow the Tax Authorities to demand its payment even before judicial authorities, and taxpayers who do not bring the necessary elements for the correct determination of the fee could be punished.

Even though the above mentioned changes make appealing before the Tax Court more expensive than before, it continues to be the primary alternative for the taxpayer who wishes to question the Tax Authorities pretension, which considers to be unlawful.

Please be aware that the Argentine Association of Fiscal Studies (Asociación Argentina de Estudios Fiscales) has criticized these changes holding that they (i) discourage the choice of this appellate instance, (ii) lessen the principle of the gratuity of the administrative proceedings and (iii) contradict legal precedents of the Supreme Court of Justice when including penalties for purposes of calculating the fee.The National Tax Court is a jurisdictional and technical entity that, though being part of the Executive Branch, is known for its impartiality. Its function is to solve appeals against certain acts of the National Tax Authorities (Administración Federal de Ingresos Públicos – AFIP), when exercising their fiscal powers. It constitutes the appellate court for taxes assessment and penalties application by Tax Authorities.

New Law No 25,964 repealed the previous Law No 22,610, which regulated the previous terms and conditions of the fee. Consequently some important provisions which had been in force since 1982 were modified. The most significant changes are:

(i) the tax rate increased from 2% to 2.5%;

(ii) the base on which the fee must be calculated has been broadened. The new rate is applied on the total disputed amount, which includes claimed capital, interest and possible penalties. Pursuant to the previous law, the calculation did not include penalties;

(iii) regarding the timing of the payment, the total amount must now be paid when first appearing before the court, despite later adjustments. In accordance with the previous law, 50% of the amount had to be paid at the moment of the appeal before the court, and the remaining 50% within the 5 following days of the notification of the decision, if the taxpayer’s plea failed;

(iv) the new law establishes a fixed fee of AR$ 80 for protection proceedings from the Tax Authority (amparos) regulated by the Tax Procedural Law No 11,683; these kind of proceedings were exempted from the fee under the provisions of the former law; and

(v) those going through civil or commercial insolvency proceedings can pay a 50% reduced fee.

Not paying the fee will not prevent the normal development of the trial before the National Tax Court, but will allow the Tax Authorities to demand its payment even before judicial authorities, and taxpayers who do not bring the necessary elements for the correct determination of the fee could be punished.

Even though the above mentioned changes make appealing before the Tax Court more expensive than before, it continues to be the primary alternative for the taxpayer who wishes to question the Tax Authorities pretension, which considers to be unlawful.

Please be aware that the Argentine Association of Fiscal Studies (Asociación Argentina de Estudios Fiscales) has criticized these changes holding that they (i) discourage the choice of this appellate instance, (ii) lessen the principle of the gratuity of the administrative proceedings and (iii) contradict legal precedents of the Supreme Court of Justice when including penalties for purposes of calculating the fee.