Tax ID as Personal Data

In view of alleged tax breaches related to the failure to file sworn statements, the Argentine Tax Authority (the “AFIP” after its acronym in Spanish) inactivated the Tax ID of a company, which made it impossible –among other things– to finalize the sale of a previously reserved property.

In view of the above, the company filed a protection action (namely, amparo) in Inversiones Virasol S.A. v. Administración Federal de Ingresos Públicos (AFIP) y otro s/ Amparo Ley 16986, and requested a precautionary measure against the AFIP in order to proceed with the immediate reactivation of its Tax ID. The Federal Court of Appeals for Administrative Matters (Tribunal IV) revoked the first instance decision and granted such measure.

To reach this result, the Court began by limiting the action filed by the plaintiff, pointing out that it was an innovative precautionary measure (insofar as it required the suspension of certain fiscal verification, and the new issuance of the Tax ID), directed against the State (i.e., the AFIP).

Later, the Court indicated that the AFIP alleged “repeated breaches” by the plaintiff, in particular, with regard to the failure to submit various sworn statements. However, the Court continued by stating that the plaintiff had prima facie proven compliance with its tax / fiscal obligations, and that there were no factual circumstances that allowed a sanction such as the suspension of the Tax ID. Given this, the Court concluded that the action was well-founded.

As to the danger of delay argument, the Court emphasized that the Tax ID is far from being a “mere accessory or secondary element”, but that it constitutes an essential requirement for the exercise of commerce. In addition, the Court pointed out that its importance transcends the tax aspect, and –in order to validate its reasoning– referred to the Data Protection Law No. 25,326, which qualifies the Tax ID as personal data, and regulates its treatment (Articles 2 and 5). Finally, the Court warned that the frustration of the sale operation proved –even more intensely– the danger of delay.