In the midst of the debate over tax reform, there is a legal and accounting battle unleashed between the lawyers of large companies and ARCA by the income tax. It is about the possibility of deduct payments from that lien for losses that companies have had during previous years.
The Government defends its share of collection and offered the companies, as a negotiation pledge, a payment plan without penalties so that the firms join and abandon the legal bid. Clarion He anticipated that the treasury would point out a group of companies for deducting some $100,000 million from their profit declaration through this mechanism.
In essence, this is a discussion about what accountants and tax lawyers call the brokennessthat is, the accounting losses that companies can record when preparing their balance sheets. The law allows companies to deduct these losses from their income statements for the next 5 years.
Its application, for different reasons, is not linear and It is a matter of discussion between the legal representatives of the firms and ARCA. The central point of the debate has to do with the inflation update of those breakdowns.
That is, if a company lost $100 million during a year, when in subsequent years it wants to deduct that amount to calculate its profit payment, inflation will have caused it to lose real value at that amount.
The conflict is not new and there is already legal precedent, with rulings even from the Supreme Court of Justice. The tributary Sebastian Dominguez mentions that the highest court already ruled in the Telefónica ruling, in October 2022, where it considered that, if the treasury does not allow the amounts of losses to be updated for inflation, can be confiscatory and an impact on property rights.
With that ruling in hand, companies are pushing to pay less profits. In general, there are lawyers who advise on tax issues, those who have the backbone to fight the treasury are the ones large firms and specific sectors, such as banks and oil companies.
The Casa Rosada, meanwhile, argues that the Income Tax Law does not explicitly provide that accounting losses can be updated for inflation and that just a change in the wording of the law I could enable it. The tax agency did not respond to a query from Clarion.
The tax lawyer Diego Fraga He explained that “there was a wave of rulings on updating for inflation and companies began to update losses.” “Few did it, but when they saw solid jurisprudence, they did it more. ARCA does not accept it and went out to supervise and make ex officio determinations of the Income Tax, he mentioned.
In this context, in April ARCA determined a payment plan in up to 36 installments so that companies adhere to and pay the difference in Profits that companies would have discounted incorrectly, according to the position of the Executive Branch. Last September the Ministry of Economy, through the National Tax Directorate, added one more “carrot”: there will be no fines.
The attraction that the Government tried to add to this payment plan is that the taxation of Profits with the discounted losses that the companies made are not considered as tax omission or fraud to the treasurywhich by definition would have economic sanctions that range up to an amount 10 times higher than the unpaid taxes.
Among the companies and the lawyers who advise them, they do not believe that there is any change in the bankruptcy scheme in the company. tax reform that the Casa Rosada is preparing for discussion in Congress in the coming weeks. The key point is that involves considerable revenue and the Government is not in a position to give up tax revenues because it needs to meet the fiscal surplus goals.
At the UIA they assure that, in the case of the manufacturing industry, the lack of inflation updating of accounting losses implies an annual collection of US$3 billion annually. In the case of the manufacturing sector, 90% of the total of these balances is concentrated in 15 firms.