Taxpayer's Alternatives In Relation To A Tax Claim: Appeal The Tax Assessment Or Pay And File A Refund Claim?

Author:Ms María Inés Brandt, Walter C. Keiniger and Sergio Daniel Vergara
Profession:Marval O'Farrell & Mairal
 
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A Superior Court of Justice of the City of Buenos Aires' ruling resolved a case where a tax on gross income debt was assessed, and the taxpayer, who had previously appealed the assessment, required a plan to pay the tax debt in monthly installments. Then, the taxpayer filed a refund claim. The Court analyzed whether once the taxpayer filed an administrative appeal against an assessment the tax payer is able to initiate a refund claim in relation to the same debt.

  1. Background

    The Tax Authority of the City of Buenos Aires (hereinafter, the “AGIP”) assessed taxpayer's tax on gross income debt. The latter decided to challenge the assessment through the filing of the corresponding administrative appeals and obtained an administrative final decision which dismissed its tax position. Subsequently, the taxpayer requested the AGIP to instate a plan to pay the tax debt in monthly installments -but alleging that such requirement does not imply the recognition of the debt- which was accepted by the tax authority. Then the taxpayer made a payment in advance and the first plan installment; after that he filed the claim to obtain the refund of such payments.

    The AGIP  requested the rejection of the refund claim, considering that once the final administrative decision had been issued, the taxpayer had 90 days to challenge such decision legally (in accordance to Section 7 of the Administrative and Tax Litigation Code). This was not the case. Rather, the taxpayer had initiated the refund claim after the lapsing term had passed. According to the taxpayer, he had taken the right decision, considering that neither the local Tax Code nor the Administrative and Tax Litigation Code established a lapse term in order to initiate a refund claim once the payment was made. Therefore, there is no time-based impediment for the refund claim whenever the claim is initiated within the statute of limitations term (five years).

    Both the First Instance Court and the Court of Appeals in Administrative and Tax Matters considered the Tax Authority's position proper and stated that the refund claim was inadmissible. These decisions were based on the fact that once the taxpayer chooses to file an administrative appeal and obtains an administrative final decision, he/she or it has 90 days to file a lawsuit before the Justice. On the contrary, the administrative final decision becomes definitive and may not be able to be challenged.

    The taxpayer appealed the Court of Appeals' judgment before...

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