Equal Treatment of Creditors and Tax Credits in Reorganization and Bankruptcy Cases

Section 32 of Argentine Bankruptcy Law states that, prior to the filing of a bankruptcy proceeding, creditors of a cause or title prior to the filing of the bankruptcy proceeding must request recognition of their credit with the trustee, even if they are a public entity.

The Argentine Tax Authority (the “AFIP”, after its Spanish acronym) often tries to avoid this burden, common to every creditor, by arguing that the trustee has the obligation to complete  form No.735 (Res. AFIP 1975/2005), that obliges the party to inform the AFIP of the bankruptcy proceeding’s initiation and the debts of the person and/or company declared bankrupt.

However, both jurisprudence and doctrine agree that the AFIP has the burden of informing its credit to the liquidator of the bankruptcy like any other creditor (Ex. CNCom, Sala E, 22/09/1982, en Fisco Nacional c/ Hijos de Ybarra Argentina SA s/ concurso, Lexis Nexis 11/10784).

Both doctrine and jurisprudence agree also as a rule, that the tax paid in the determination procedures ex officio (with real or presumed basis) makes sufficient evidence of the cause to obtain the recognition of this type of credit, without having the need to go further into the verification of the cause of the tax credit (Ex. CNCom. Sala A, “Estudio Falcón S.R.L. s/Quiebra s/Incidente de revisión por AFIP-DGI” del 13/06/08,  among many others).

The AFIP usually seeks to assert its verification claim with the sole presentation of a debt certificate, without indicating either the cause or the origin of its credit, or add as supporting titles of the tax returns sworn by the taxpayer or the ex officio determinations. With this single document, the AFIP has often been successful in obtaining the recognition of its credit based on the presumption of legitimacy of its acts.

Notwithstanding, in a recent ruling, Room D of Commercial Court (CNCom., Sala D –  28 de febrero de 2019 “Servisa Agro S.A. s/Quiebra s/Incidente de revisión de crédito de AFIP), changed the criteria it has been applying lately. It ruled that although debt certificates issued by the AFIP enjoy a presumption of legitimacy and good faith, the collecting entity is the party which has the burden of proving the cause of the credit that it intends to enter into the liabilities of the bankrupt party (section 32 of Bankruptcy Law)

In this case, the AFIP credit check was rejected, confirming the sentence of first instance, which placed the AFIP on an equal footing with the rest of the creditors, alleging the need to prove the cause of the claim and supporting documents as required by section 32 of Bankruptcy Law.

The Commercial Court stated that in the review process that every litigant has the burden of proving the statements that they invoke as basis of their claim, defense or exception, and that they must fulfill that part when it comes to trial as required by section 37 of the Bankruptcy Law.

In this case, the final ruling referred directly to the commercial district attorney’s opinion, in which he highlighted that the AFIP had the necessary procedural framework to offer the evidence to prove and justify the origin and cause of the alleged credit. The conclusion was that AFIP had not exercised this right. Based on those grounds, the Commercial Court indicated that these procedural rules are not unrelated to the situation in which the collecting entities are located, so in a bankruptcy proceeding, the unilaterally issued evidence neither shows good faith nor carries sufficient weight to prove the cause of a credit.

The trustee when filing the report as provided by section 35 of Bankruptcy Law and when responding to the AFIP revision lawsuit argued that:

1. AFIP did not provide administrative records to support or quantify the estimated ex officio determination;
2. AFIP has to prove the cause of its credit (CNCom., Sala D, “Malfatti Vilma s/quiebra s/incidente de revisión por AFIP”, 04/12/2001);
3. AFIP did not provide determinative statements that serve as the basis for the ex officio determination (CCCom. Rosario, Sala III, 24/4/96, Z. 72-2, N°5540).

The judge of first instance rejected the AFIP’s claim arguing that the collecting entity did not provide new elements that may allow to change the opinion alleged by the trustee at the moment of the report provided by section 35 of Bankruptcy Law nor the section 36 resolution.

The review action has the characteristics of an ordinary claim and section 278 of Bankruptcy Law admits the application by reference of section 377 of the Argentine Civil and Commercial Procedural Code, a norm that provides that the party alleging a controversial fact must prove it, in this case, the cause of the credit.

The judge stated that "the possibility of ex officio determination of the debt requires to be assumed jurisdictionally in the revision trial an evidence support of the sequence prior to the determination in order to prove the cause of it" (conf. CNCom, Sala B, September 1, 1999, “Vimana SA s/Quiebra s/Incidente de revisión por DGI”).

Finally, the judge stated that although the certificates issued by the AFIP are public instruments in terms of section 289 of the Argentine Civil and Commercial Code, this means that good faith in the content may be assumed, but not in the cause of the credit itself.

If other courts follow suit and adopt this change of criteria, the AFIP will be treated like any other creditor in bankruptcy cases. Then, it will have to give evidence that proves the cause of its credit in order to obtain recognition in Chapter 7 and Chapter 11 cases.