The courts have held that interest on capital is a natural consequence of default and not an updating mechanism.
A premise that has always been recognized when applying the corresponding interests in customs tax matters. Thus, in the event of a delay due to non-payment, the same are liquidated until due cancellation. Interests that also apply during the time that a debate lasts regarding these taxes, as a consequence of being questioned through some of the processes that the law grants to the administrator, for this purpose, whether on original or supplementary liquidations and that are enforceable if confirmed before a firm administrative or judicial decision.
Now, it is known that the Court was able to hold that customs duties are determined in US dollars and for the purposes of proceeding to their payment, by means of the national currency, the exchange rate of the business day prior to their cancellation must be applied, according to article 20 of law 23.905 (1).
In this regard, the former AFIP (current ARCA) issued General Resolution 3271 -in 2012-, by which it stipulated that customs tax obligations -original or supplementary- expressed in US dollars that, in accordance with the provisions of article 20 of Law No. 23.905 and its amendment, are entered in legal currency, for their conversion into pesos, the selling exchange rate reported by the Banco de la Nación Argentina at the close of its operations, corresponding to the business day prior to the date of its effective payment, will be used. Likewise, when interest is due, it must be calculated on the capital owed -in pesos- until the date of its payment, in accordance with the provisions of article 794 and related articles of the Customs Code. And determining that supplementary customs tax obligations will be settled and notified in US dollars. The foregoing must be stated in the notice or instrument of notification.
On the other hand, currently the updates mentioned in the Customs Code have become invalid in accordance with the provisions of article 10 of Law 23.928. (2)
Court ruling
Having said this, we find interesting the considerations introduced by the Court in a recent ruling of October 15, 2024 (3), where the highest Court has indicated:
Law
“With respect to the grievance relating to the interest rate, although it refers to the examination of questions of fact and common law, outside the jurisdiction of the Court, an exception to said rule is appropriate if a serious impairment of the constitutional rights of property and defense in court is alleged and a manifestly disproportionate result is reached that ignores the economic reality existing at the time of the ruling (Rulings: 347:472).”
Interest rate
“The devaluation of the currency may occur after the value of the debt is expressed in money and not before. In this case, the interest rate must be pure, that is, it must not consider other updating parameters so as not to grant unjustified enrichment to the creditor. Once the value of the compensable damage is expressed in money, an interest rate that also considers the monetary depreciation may be admissible.”
“In short, since there is no money owed, there is no decrease in monetary value and it is not appropriate to apply an interest rate that takes inflation into account.”
“As was evident, the appealed judgment set the compensation (with the exception of the amount for psychological treatment) at “current value.” Consequently, it is unreasonable to apply default interest at the active rate from the event until the judgment, based on grounds related to the impact of time and the reduction that this produces in the comprehensiveness of the compensation due to not having been paid immediately after the damage occurred.”
“Since compensation is set at “current values” -or real values in the terms of art. 772 of the Civil and Commercial Code of the Nation-, there is no basis for applying an interest rate that contemplates, among other variables, compensation for currency devaluation. The application of this type of rate on a “current value” alters the economic meaning of the capital recognized to the creditor and causes the enrichment of one of the parties to the detriment of the other.”
“That being the case, by ordering the calculation of interest with the nominal annual active general portfolio rate due thirty days from the Banco de la Nación Argentina from the time of the damage, on the obligations whose amount was determined at current values, the judgment yields a result that lacks proportion and reasonableness and represents a clear departure from the economic reality prevailing at the time of the ruling.”
It is not lost on us that the Court, in the ruling indicated here, has referred to an amount of compensation and not a tax debt, but this does not mean that its definitions can converge to be applicable to the case of customs duties, given the following notable points.
First, the Court points out that the devaluation of the currency may occur after the debt value is expressed in money and not before. Considering that since there is no money owed, there is no decrease in the monetary value and it is not appropriate to apply an interest rate that takes inflation into account.
If we apply this statement to customs duties, would it be possible to apply it?
For these purposes we must remember, as indicated at the beginning, that customs duties are determined in US dollars, but in practice their payment in such currency is not allowed, therefore, although the dollar may have the nature of money, in reality for these cases it acts as a “debt value”, and will only be conceived expressed in money, when it is transformed into national currency, granting a certain possibility to be able to face the payment through “concrete money”. Remembering that, “money fulfills legal functions: it is an instrument of payment and a legal means of settling obligations that have as their object the delivery of a sum of money”.(4)
In this sense, "we must distinguish between debts of value and debts of money. In the former, what is owed is a quid, a value. This value is measured and satisfied at the time of payment with money. In the latter, a quantum is owed, which is determined in currency at the time of its creation" (5).
From here, if to change the value of the debt conceived in dollars, the exchange rate related to the fact generating the obligation should not be taken, in customs terms, the taxable moment according to articles 637, 638, 639, 726, 727, 728 of the Customs Code, but rather, the one corresponding to the business day prior to its effective payment; it is evident that, from the moment in which the payment of taxes should have been faced -taxable moment-, of course in national currency, to the instance in which it must be paid, when the demand for the tax becomes firm, considering for the case the pesos that respond to the exchange rate of the business day prior to its payment, there would be no decrease in the monetary value and following the criteria of the Court, it would not be appropriate to apply an interest rate that considers inflation.
This is because the value of the debt has not depreciated, and it would only be necessary to analyze how many pesos would be necessary to face a tax debt at the time of the demand - when the event generating the obligation is conceived - and how many would be required to proceed with the cancellation - when such debt becomes final after an appeal is filed by the taxpayer. The amount of pesos will inevitably be much higher. This proves that the debt, being held in US dollars, knew how to act as a "debt value" and thus avoid depreciation as a consequence of inflation.
Therefore, in line with what the Court was able to point out in this recent ruling, the interest rate from the time of the event, on the obligations whose amount was determined at current values, would yield a result lacking in proportion and reasonableness and would mean a clear departure from the economic reality prevailing at the time of the final decision of the process that generated its challenge. Because the tax debt is set at "current values", there is no basis for applying an interest rate that contemplates, among other variables, compensation for currency devaluation. This would lead to the application of this type of rate on a "current value" altering the economic meaning of the capital recognized to the creditor and would cause the enrichment of the State to the detriment of the taxpayer.
Although it has been considered that the compensatory interest rate is applicable to late payment and it has even been indicated that in tax matters it has a purpose for the faithful fulfillment of these obligations, in our opinion this preaching has been distorted in customs matters, since article 794 of the CA has been
considered in accordance with the proper application of articles 639 and 728 of the Customs Code, that is, when the exchange rate applicable for the conversion was the taxable moment provided for by the customs regulation and not another. If this were to continue to be the case, the law provides for a rate that takes into account the time elapsed in arrears between that taxable moment and the effective payment date, thus ensuring that payment is made at the time when it is due without delay.
But since the change that has occurred in the interpretation of what will be the moment to converge towards the peso currency and to be applicable for this a totally different exchange rate with respect to the one corresponding to the time of the event generating the obligation -taxable moment-, it is evident that we are faced with another meaning of the interest rate. Observing, from this type of conversion scheme from dollar to pesos, with a rate that would be absent of reasonableness and proportionality. Especially, if we consider the rates that are applied in the event of delays since the Customs introduced the change of criteria in relation to the conversion of the currency since 2012.
From the rate table indicated above, it can be observed that the compensatory rate for pesos from 2012 to 2019 remained in terms of what was conceived exclusively for debts in pesos and not in dollars. A differentiation was only introduced in 2019, through Resolution 598/19, where a default rate of 0,83% and a punitive rate of 1% were established for the “dollar” currency until today.
Despite the differentiated rates since 2019, it is true that for the above cases due to any debts that may exist, the rates in force in each corresponding time period must be applied (6).
Therefore, if we observe the criteria of opportunity, merit and convenience that must be considered to establish an interest rate, as we have maintained on another occasion, before 2012, although customs tax settlements are expressed in dollars, it is true that they were required in pesos at the exchange rate at the date of the taxable moment as determined by article 639 and 728 of the Customs Code for import and export, respectively. Which did not generate any possibility of considering a differentiation of criteria regarding opportunity, merit and convenience. Obviously, since the rates set according to Resolution 314/2004 or its previous one, were intended for debts in pesos. Therefore, the application of a rate conceived on weights with respect to and intended for the currency in pesos -for tax credits in dollars-, was aligned with a criterion of opportunity, merit and convenience with the inflationary state that was necessary to establish in the face of the depreciation of the national currency.
However, starting in 2012, by AFIP General Resolution 3271/2012, it was decided to settle customs duties in US dollars, converting them into pesos for payment at the exchange rate of the business day prior to their effective cancellation, thus, it is undoubtedly the criterion that supported the imposition of the compensatory rate during the time period from 2002 to 2019 (following the referenced table) was based on considerations of opportunity, merit and convenience applied to debts in pesos and not to any other currency, seeking to compensate for the loss of value of the pesos.
In this sense, the interest rate based on the criterion adopted for the conversion into pesos taking the exchange rate of the business day prior to its actual payment, would cease to have the purpose that the legislator wanted to give when drafting article 794 of the CA, observing that the rate would move away from all reasonableness and proportionality, its purpose being denatured, in the face of a debt that ultimately at the time of conversion into pesos externalizes a "current value" and therefore, the purpose of the default rate would not be admissible by virtue of the considerations contained in the Court's ruling of October 15, 2024 (7).
Conclusions
In the Volkswagen Argentina case (8) the Court made its decision in accordance with the opinion of the Attorney General and in this regard, considered applicable article 20 of law 23.905, in order to determine customs duties in US dollars and take the exchange rate for their conversion into pesos corresponding to the business day prior to their effective payment. But as regards the interests, it did not issue a specific ruling, although it indicated that the interests have a compensatory purpose, having as a presupposition the debtor's default and that they accrue from the moment in which said situation is configured, adding that in fiscal matters, they have also been established with the purpose of encouraging compliance in time of tax and social security obligations, it is true that with respect to the inadmissibility of such accessories, it did not make any consideration due to lack of argumentation in the complaint.
From here, if the Court has held that customs duties must be determined in dollars in accordance with art. 20 of Law 23.905, but has not ruled on interest, at least in the ruling that had the opportunity to deal with both issues, now with the considerations made in the decision of October 15, 2024, regarding the inadmissibility of interest compared to an updated value, we consider it relevant to be kept in mind, since in fact, the determination of customs duties in dollars would act as a "debt value" and the final conversion into pesos would have the character of "updated value" and therefore, the Court's criterion is applicable, as the interest rate must be pure, that is, it must not contemplate other updating parameters so as not to grant unjustified enrichment to the creditor, in this case the State itself. Since it is impossible, at least until now, for the taxpayer to face the tax debt in dollars and has the obligation to do so in pesos, this would indicate that the tax debt would only be expressed in money when the conversion into pesos occurs, not observing a decrease in the monetary value and therefore it would not be appropriate to apply an interest rate that takes inflation into account.
- Law 23.905 – Article 20: Import duties, export duties, as well as other taxes levied on imports and exports shall be determined in US dollars. Payment may be made in the aforementioned currency, in export credit bonds in accordance with current regulations, or in australes. In the latter case, the equivalence shall be determined according to the exchange rate in effect on the day prior to the actual payment.
- Law 23.928 – Article 10: All legal or regulatory provisions establishing or authorizing price indexation, monetary updating, cost variation or any other form of re-potentialization of debts, taxes, prices or rates for goods, works or services are hereby repealed with effect from April 1, 1991. This repeal shall apply even to the effects of existing legal relationships and situations, and no legal, regulatory, contractual or conventional clause - including collective labor agreements - of an earlier date may be applied or invoked as a cause for adjustment in the amounts of pesos to be paid. The indicated repeal does not include financial statements, with respect to which the provisions of article 62 in fine of the General Law on Companies 19.550 (to 1984) and its amendments shall continue to apply. (Last paragraph incorporated by art. 5° of Law No. 27.468 BO 4/12/2018. Validity: on the day of its publication in the Official Gazette and will take effect as of the date established by the National Executive Power through its oversight agencies and the Central Bank of the Argentine Republic in relation to the balance sheets or financial statements presented to them) (Paragraph repealed by art. 1° of Decree No. 664/2003 BO25/3/2003) (Article replaced by art. 4° of Law No. 25.561 BO 7/1/2002).
- CIV 28577/2008/1/RH1, Barrientos, Gabriela Alexandra and others v. Ocorso, Damián and others s/ damages and losses (trans. acc. v. injuries or death), judgment of October 15, 2024.
- Wendy urfinkel, L., (2003), “Pesification and Readjustment”, Edit. Lexis Nexis, page 23
- Sarmasky, Luis, Monetary Update. Debts of value and debts of money, in Journal of Commercial Law and Obligations, No. 115, p.953, Depalma. SAIJ ID: DACJ890163.
- Resolution 3/2024 – Article 8: For the cancellation of obligations whose maturity occurred before the effective date of this resolution, the regimes in force during each of the periods they cover must be applied.
- CIV 28577/2008/1/RH1, Barrientos, Gabriela Alexandra and others v/ Ocorso, Damián and others s/ damages and losses (trans. acc. v/ injuries or death), judgment of October 15, 2024
- Volkswagen Argentina SA (TF 22.179-A) v. DGA – Judgment of August 23, 2011-V. 312. XLV.
The author is a lawyer and member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice.
