On December 28, the National Executive Branch issued Decree 1201/2018, establishing the Tax on the Export of Services through this administrative means. To do so, it takes as a legal basis Law 27.467 (Budget Law) which, among other issues, introduced modifications to arts 10, 91 and 735 of the Customs Code. Thus, subsection c was incorporated into article 10 of the CA determining that the provision of services emanating from the country for exploitation abroad will be considered as merchandise. Through art 91, it is established that those who are providers or transferors of said services will be considered exporters. Finally, through the modification to art 735, it is put into consideration how the taxable value should be considered for the purposes of applying the tax.
However, despite having been issued by the Budget Law, it is not exempt from legal flaws. Let us begin by considering that in fiscal matters, taxes can only be created by the corresponding body as provided by the National Constitution, and that body is the National Congress, where the will of the citizens is expressed. Therefore, the creation of taxes such as those arising from this Resolution issued by the Executive Branch is clearly unconstitutional because they have not been imposed by the Legislative Branch, through which the consent of the taxpayers is expressed in the political representation. Therefore, when imposing tax burdens, the instrument of legality issued by the National Congress is necessary, since it is an exclusive function and therefore exclusive of another branch of the State.
In our legal system, the supremacy of the National Constitution and International Treaties are the supreme law of the nation, to which all other norms of lower hierarchy, such as laws, decrees, resolutions, etc., must be subject. That is to say, this supremacy establishes a hierarchical order in which the highest in the pyramid subordinate the lowest and, in a harmonious conjunction, all must submit to the Constitution. If this subordination is ignored, then we are faced with a vice of legality that we call unconstitutionality. Having said this, it is then appropriate to consider that here it has been Congress that has been the body that, by sanctioning the budget law (Chapter XI of tax policy and administration), has given powers to the Executive Branch to determine said taxes, through art. 81 of that law, mentioning the powers delegated to the Executive Branch expressed in art. 755 of the Customs Code. It is unacceptable that the National Congress itself has been unable to observe the open violation of the supremacy of the National Constitution, since such powers are clearly prohibited in the constitutional text (art. 4, 17, 52, 75 inc. 1, 76, and 99 inc. 3, third paragraph), which is why Decree 1201/2018 is not legally enforceable. In addition, such export duties are set until December 2020, when the budget law clearly covers only the year 2019.
In short, the National Congress has used an illegal instrument to agree with the Executive Branch on the implementation of export duties on services. The wording of articles 78 to 81 of Law 27.467 is more than evident in terms of the violation of the principle of supremacy of the National Constitution and therefore, of the principle of fiscal legality. In addition, it once again violates the Mercosur Treaty, since both the law and the decree do not discriminate whatsoever in terms of exports to Mercosur or outside the zone.
Article 81 of the budget law states that within the framework of the powers granted to the Executive Branch (it has already been made clear that such powers are inappropriate) “may set export duties.” Congress itself should have set them and determined the rate corresponding to the fiscal period of 2019. On the other hand, the decree speaks of “addressing the needs of public finances”; and it has no better idea than to do so with an illegal instrument and also harming technological innovation, the software and services industry, at a time when income from exports is needed.
By: Dr. Guillermo Sueldo
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
