Statute of Limitations on Local Taxes: A U Turn from the “Filcrosa” Case Law, back to Local Autonomy

In the "Fornaguera Sempe" [i] case, the Superior Court of Justice of the City of Buenos Aires (the "SCJBA") -by unanimous vote of all of its members- upheld the constitutional complaint filed by the Government of the City of Buenos Aires (the "GCBA") and revoked the first instance ruling which had declared the statute of limitations of the GCBA’s faculties to pursue the payment of taxes for lighting, sweeping and cleaning services, for the periods 01 to 09 of 1991.

The SCJBA pointed out that, since the "Marini" [ii] leading case, it had followed the case law of the Argentine Supreme Court of Justice (the "ASCJ") in the "Filcrosa" [iii] ruling, in order to respect the ASCJ’s institutional authority and for procedural economy purposes. However, the enactment of the new Argentine Civil and Commercial Code (the"CCC") [iv] allows them to differ in their rulings and return to the case law of the "Sociedad Italiana de Beneficencia". [v]

The SCJBA included the following grounds:

i. Section 2532 of the CCC sets forth that local legislation may regulate the term of the statute of limitations regarding local taxes. This new legislation endorses the case law outlined by the SCJBA, which grants local autonomy to regulate the statute of limitations of local taxes. Therefore, "regardless of the date of enforcement of the new legislation and the aspects regarding intertemporal law," the SCJBA ruled that there is sufficient reason to depart from the case law outlined by the ACJN in the "Filcrosa" case (vote of Judge Casás).

ii. The Argentine Congress has always considered that the statute of limitations to pursue the payment of local taxes is a power reserved for local authorities. The specific regulation contained in Law No. 11,683 regarding the statute of limitations for national taxes proves as much. Thus, the Argentine Congress considers that the regulation of statute of limitations is not a Common Law institute, and each local authority is enabled to legislate on this matter in their own way (vote of Judge Lozano).

iii. Upon the enactment of the CCC, the Congress now expressly recognizes the interpretation it has always held, that local authorities are entitled to legislate on the statute of limitations for local taxes. Thus, such interpretation works regardless of the date of enforcement of the CCC (vote of Judge Lozano).

iv. Since the enactment of the CCC, it is clear that, contrary to the criterion followed by the ACJN in the "Filcrosa" case, the statute of limitations regarding local taxes is an institute of Local Public Law. According to the legislative delegation of the Argentine Congress, local authorities are entitled not only to settle the commencement of tax obligations within their jurisdiction, but also to regulate on their enforceability and redemption, including all the other aspects related to such institute (vote of Judge Weinberq).

This new ruling of the SCJBA raises several questions.

On the one hand, is it valid to apply a new law –CCC- which was enforced after the tax obligation was already barred according to the previous applicable legislation and thus revive the power of local authorities to pursue the payment of such obligations?

On the other hand, and regardless of its constitutional validity, what is the extent of the “legislative delegation” issued by the Argentine Congress upon Section 2532 of the CCC that sets forth that local authorities may govern the term of the statute of limitations?Does this opinion apply only to the setting of the term or does it also include the power to determine other aspects related to the institute such as causes for suspension and interruption?

Any answers provided are bound to bring about diverse consequences. Therefore, new ruling of the ASCJ is required in order to clarify the matter and unify the interpretation to guide local courts.

 

[i] SCJBA, “Fornaguera Sempe, Sara Stella y otros c/ GCBA s/ Otros demandas contra la Autoridad Administrativa”, dated October 23, 2015.

[ii] SCJBA, “Marini, Osvaldo Oscar s/ Queja por recurso de inconstitucionalidad denegado en: ‘GCBA c/ Osvaldo Marini s/ Ejecución Fiscal – Avalúo’”, dated October 6, 2013.

[iii] ASCJ, “Filcrosa S.A. s/ Quiebra s/ incidente de verificación de la Municipalidad de Avellaneda, dated September 30, 2003. In this case it was upheld that, according to Section 75 Subsection 12 of the Argentine Constitution, the Argentine Congress is the one and only agency entitled to regulate the statute of limitations to pursue the payment of local taxes. Such conclusion derives from the fact that “the statute of limitations –even for pursuing the payment of local taxes- is not an institute of the Public Local Law, but a Common Law institute” regulated by the Argentine Civil Code.

[iv] The Argentine Civil and Commercial Code was passed by Law No. 26,994, dated October 1, 2014, which and came into effect on August 1, 2015, according to Law No. 27,077.

[v] SCJBA, “Sociedad Italiana de Beneficencia en Buenos Aires s/ queja por recurso de inconstitucionalidad denegado en: ‘Sociedad Italiana de Beneficencia en Buenos Aires c/ DGR [R. (DGR) 1881/2000] s/ recurso de apelación judicial c/ decisiones de DGR (art. 114, CF), dated November 17, 2003. In this ruling it was upheld that if local authorities are empowered to create taxes, they should also be entitled to determine all the aspects regarding enforceability and redemption, such as the statute of limitations’ institution.