Last Monday, August 8, the Federal Court of First Instance No. 1 of Corrientes, in the case “Intra, Manuel Ulises c/AFIP s/Acción Mere Declarativa de Inconstitucionalidad” declared the unconstitutionality of Law No. 27,605, which requires the payment of the “Aporte Solidario y Extraordinario para Ayudar a Morigerar los Efectos de la Pandemia” (commonly known as the “Aporte Solidario y Extraordinario para Ayudar a Morigerar los Efectos de la Pandemia”, commonly known as the “Impuesto a la Riqueza”, or “Wealth Tax”). Throughout the ruling, the Judge analyzes whether or not the application of the “Solidarity Contribution” to the particular case affects the principle of non-confiscation.
In his ruling, the Judge understands that the legal figure which the legislator calls “contribution” is not the correct one. He stipulates that such “contribution” should actually be considered as a new -and additional- national tax on all assets existing as of 12/18/2020 of individuals and undivided estates, whose total value exceeds the amount of $200,000,000. Therefore, and considering the jurisprudence of the Supreme Court of Justice of the Nation, it concludes that being a public charge of economic nature, the Solidarity Contribution must not be confiscatory and must respect the right to property.
In this line, the Supreme Court has established that, in order for confiscation to occur, there must be an absorption by the State of a substantial portion of the income or capital, adding that for the purposes of its quantitative assessment, the actual value of the assets must be taken into account.
In the specific case, according to the accounting expertise produced, the Solidarity Contribution would absorb approximately 118,658.78% of the total income for the year 2020. This causes a clear absorption of the income -already taxed by the Personal Property Tax and the Income Tax- resulting confiscatory in the light of the doctrine issued by the Supreme Court. Furthermore, it is added that the percentage absorbed by the Solidarity Contribution, added to the Personal Property Tax for the period 2020, would be 155,326.59% of the total income of the plaintiff during the tax year 2020. Furthermore, from the expert accounting evidence, together with the documentary evidence provided, it is evident how excessive the required burden is, and that it restricts excessively the taxpayer’s assets, seriously affecting his property rights.
There is no doubt that the Solidarity Contribution is genuinely a tax, since it has a tributary nature. If it were to be considered as a contribution properly speaking, it should not be compulsorily applied, but each taxpayer should have the right to decide whether he/she wishes to contribute with such contribution.
At the same time, we emphasize that the ruling we are commenting on is only applicable to this specific case, and will surely be subject to appeal by AFIP.
Notwithstanding this positive precedent, it will be necessary to wait for the rulings issued by the Courts located in the Federal Capital, since, due to the importance and number of cases filed in this jurisdiction, they will be the ones that will set the trend in this matter.
