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Supreme Court Blocks Provincial Tax Penalties on Out-of-Province Companies

The rulings reaffirm a 2017 precedent to protect free movement of goods across provinces.

Overview

  • The Supreme Court, which ruled Thursday, struck down Salta and Santa Fe rules that set higher gross‑receipts taxes or tied exemptions to having a plant inside the province under the Ingresos Brutos system.
  • Three cases were decided and signed by Horacio Rosatti, Carlos Rosenkrantz and Ricardo Lorenzetti, who followed the Court’s 2017 Bayer ruling on discriminatory tax rates.
  • Two companies, Panificadora Veneziana and Comercial Rossi, challenged a Salta code article that denied a manufacturer’s exemption to firms without local plants, and tax officials charged a 3.6% rate for April through December 2017.
  • Rieles y Cosas sued Santa Fe after the province demanded a 4.5% Ingresos Brutos rate instead of the 3.5% basic rate from October 2012 to June 2017 because the firm is based in Buenos Aires Province.
  • The Court said differential rates work like internal customs barriers and breach equality and free circulation, a stance that could cut costs for multi‑province businesses and press other provinces to redo their tax codes or face new lawsuits.