The AFIP's power to cancel the Unique Tax Identification Code (CUIT) becomes a citizen as of General Resolution No. 3358/12.
The Agency's control actions detected the creation and registration of commercial companies with reprehensible objectives, which in effect led to the emergence of such a drastic sanction. The following are cited as examples: functioning as "folders" or "factories" for the development of activities aimed at facilitating tax evasion; acting as "platforms" for the development of illegal foreign trade operations; hiding the true assets of individuals or creating supposed companies that "outsource" services to plan the true relationship between companies and workers.
Under these conditions, this preventive measure arises in order to combat illegal practices and prevent their generalization. The Customs Technical Legal Area and the DGA considered the issuance of the aforementioned regulations to be plausible.
However, this regulation was repealed by General Resolution No. 3832/2016, which "self-proclaims" itself to be superior to the former regime, by establishing a procedure for periodic evaluation of taxpayers and responsible parties through systemic controls executed in a centralized manner, based on non-compliance and/or inconsistencies that may occur.
In addition, it should be noted that it provides for a regularization procedure to fill the regulatory gap of the previous regime.
The look of justice
Well, the AFIP's powers have a direct impact on import and export operations. Consider the negative economic consequences that could be generated for a leading player in foreign trade if it were to be subject to a significant sanction.
In order to do so, the tax collection agency must carefully weigh the circumstances of the case before issuing such a measure. In this way, it is obligatory not to adopt the cancellation of the CUIT lightly.
In another order of things, the normative complex that the taxpayer must obey is not exempt from criticism; ultimately, it motivated the intervention of the judiciary to issue an in re “Gargiulo, Omar Eduardo vs. AFIP s/ Amparo Law 16.986".
Thus, the taxpayer went to court through an amparo action and, within the framework of said process, requested as a precautionary measure that the AFIP immediately be ordered to rehabilitate his CUIT and exclude him from the Database of Unreliable Taxpayers.
This is so, since the administration resolved based on art. 3 of Resolution No. 3832/16, understanding that the taxpayer's situation was apprehended within said norm. The same provides: "For all taxpayers and responsible parties registered with this AFIP, their inclusion in the "Unreliable Taxpayers Database" will be verified, which includes the subjects for whom inconsistencies have been verified or detected in relation to the operational, economic and/or financial capacity, which differ from the magnitude, quality or conditions externalized by the DDJJ, the supporting vouchers, or that do not reflect the operation they attempt to document, or the absence of these."
Please note, in relation to the cause, art. 7 states: “A condition for achieving the restoration of the CUIT will be to have fulfilled the following requirements: … inc. 8) Not being included in the Unreliable Taxpayers Database.”
The Court of First Instance decided to reject the precautionary remedy, since the amparo action had been initiated. It added that if the inaudita parte measure were granted, the defendant's right to defense would be violated, since it would put an end to the discussion to be elucidated.
Furthermore, it asserted as a basis in its decision that the requirements of “plausibility of the right” and the “irreparability” of the damages claimed have not been proven.
The plaintiff filed an appeal against this decision. The reviewing court in the case, Chamber V of the Federal National Administrative Litigation Court, resolved substantially the plaintiff's claim on 27/12/2017.
The main grievance of the plaintiff is that the cancellation of the CUIT prevents the generation of any type of receipt, such as invoices, which are necessary to engage in trade and pass the controls required by the Treasury, ultimately excluding it from any legitimate commercial circle. The Court accepts the taxpayer's arguments, since it accompanied in support of its claim having responded to the requirements made by the Treasury. The latter has in its database: the VAT Purchase and VAT Sales Books; the taxpayer is not registered as an Employer in the registered system because it does not have employees, since the activities it carries out are carried out through third party subcontracting; it also has the requested Income Tax returns.
For its part, in contrast, the administration did not attach copies or administrative acts stating the reasons invoked or the inconsistencies detected to deactivate the CUIT.
In light of the above, the Court decided to grant the precautionary measure - without prejudice to the decision on the merits of the matter to be issued in the proceedings - since it considers that the damage caused was proven in an arbitrary and disproportionate manner to the commercial nature of the business of the administrator.
As for the “danger of delay,” he emphasized, if the status quo is maintained, the taxpayer cannot comply with all the defendant’s requirements, nor work or carry out his activities. Finally, he established a sworn bond, meaning that the taxpayer does not have to present any type of guarantee.
Conclusion
The current regulations are not immune to criticism, despite the lofty objectives they aim to meet.
It can be inferred from the above, firstly, the appropriateness of the precautionary measure as a viable procedural remedy in the hands of the taxpayer to remove the obstacles imposed by the law.
Secondly, the cancellation of the CUIT turns out to be a measure of unusual economic severity for any importer or exporter, by excluding them completely from the commercial circuit.
Thirdly, the regulation is confusing and contradictory since, on the one hand, the CUIT is cancelled and, on the other, the taxpayer is simultaneously obliged to comply with the formal and material obligations imposed by the legislation.
As a result, in our opinion, the rule is questionable, since it does not comply with the constitutional precepts, seriously affecting the right to work, engage in lawful trade and industry, and the principle of reasonableness.
It should be noted that the cancellation of the CUIT should be a sanction applicable to extremely serious cases. This forces us to rethink a procedure that regulates the sanction, and it is desirable that the sanction be imposed by the judicial body at the request of the tax collection agency.
By: Cristian F. Anderson. Lawyer
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