Additional Advance Payment on Account of Turnover Tax in the Province of Buenos Aires

Article 136 of Law 15479, published in the Official Gazette of the Province of Buenos Aires on January 2, 2024, empowers the Tax Authority of the Province of Buenos Aires (ARBA) to establish an extraordinary advance payment on account of Turnover Tax for the fiscal year 2024.

Said advance payment may amount up to four times the sum of the advance payment corresponding to October 2023. It will be applicable to the taxpayers—both local or Multilateral Convention—ARBA determines, based on income or invoicing segments and/or certain indexes specified in the regulation.

The law also authorizes ARBA to liquidate and demand the payment of the advance payment taking as basis for calculation up to four times the amount of any non-prescribed advance payment, increased by up to 70%, for those taxpayers and/or responsible parties who have not filed a sworn return or who have not declared income in October 2023.Further, the law establishes that such advance payment will not accrue interests in favor of the taxpayer and/or responsible party and that it must be allocated to the 2024 Turnover Tax in the form and under the conditions ARBA establishes. ARBA is authorized to provide an installment accounting method for its payment and to determine the due date of each installment.

Although implementing this advance payment is subject to regulation, applying it could violate constitutional principles and guarantees, such as the principle of legal reserve in tax matters, of contributive capacity, and the unnamed guarantee of reasonability. The reason for this is that, since the advance payment seems to bear no relation with the taxable event of the Turnover Tax, which is levied on the gross income arising from the exercise of paid activities in monthly periods, in these conditions it could be assimilated to a forced loan.

The property damage that could result from the potential regulation and application of this additional advance payment will be even greater for those taxpayers who have a credit balance, because the real value to be computed in the future would be pulverized by the inflation.

Likewise, the law’s delegation entitles ARBA to determine the taxpayers to whom the additional advance payment will apply, even though this is an essential element of any tax obligation and must be determined by law.