The Supreme Court of Justice made a key decision this Thursday by resolving four cases related to the differential rates on the Gross Income Tax. The Court affirmed that provinces cannot impose a more burdensome treatment on companies operating from other jurisdictions.
The rulings affect Bridgestone Argentina, Nestlé Argentina S.A., ENOD S.A., and Sucesores de Alfredo Williner S.A., including both precautionary measures and final rulings against the tax regimes applied by the City of Buenos Aires and the province of Río Negro. In the cases of Bridgestone and Nestlé, the Court declared its jurisdiction and granted the requested precautionary measures, preventing the City of Buenos Aires from imposing the differential rates during the process.
The City’s justification for applying higher rates was based on the fact that these companies have their establishments in other provinces and then sell those products in Buenos Aires. The decisions were signed by ministers Horacio Rosatti, Carlos Rosenkrantz, and Ricardo Lorenzetti.
Regarding the cases brought by ENOD S.A. and Sucesores de Alfredo Williner S.A., the Court issued final rulings, siding with the companies’ claims and declaring the differential rates unconstitutional due to their location outside those jurisdictions. To support its ruling, the Court reaffirmed the doctrine established in the “Bayer S.A. vs. Province of Santa Fe” decision, which referred to the same tax and was pronounced in 2017.
In the mentioned case, Bayer challenged the application of a rate of 3.5% by Santa Fe, arguing that it was unfair compared to the rates of 1% and 2% that the company was using. The Court maintained that the taxpayer’s location did not justify a more severe tax treatment, emphasizing that such a distinction violated the equality principle of the Constitution and could affect interprovincial trade. This doctrine has become relevant in the recent decision regarding the regimes applied by the City of Buenos Aires and Río Negro.
Source: www.infobae.com
