Neuquén money laundering tax, if not analogous, only applies to local subjects

Despite the provincial coordination requested in national law, through Neuquén Local Law 3450 (07/30/2024), the following are established:

In turn, the provincial standard was regulated by Res. DPR 297/2024 (BO NQN, 9/23/2024).

Scope of the regulations

The purpose of this comment is to warn regarding its inapplicability for taxpayers (in particular, of the Gross Income Tax) that are not local or that do not have their main headquarters under the terms of the Multilateral Agreement in that province. This argument extends to the numerous specific and additional funds that regularly appear to those covered by the Multilateral Agreement.

Literally, the new provincial norm seems to aim to reach taxpayers outside the jurisdiction of Neuquén (see article 16 mentioned at the bottom), an issue that – in our opinion – does not seem to be possible to extend in a generalized manner; This is so in the first place because the power of local sovereignty does not extend beyond its territory.

Additionally, it is challengeable based on the rules of Law 23,548 on Co-Participation. Regarding this last question, it was explored in depth from this same column by Enrique Condorelli (2) and by Gerardo E. Vega (3) to whose qualified observations it is worth referring.

Analogous taxation

It must be clear that the provinces are absolutely sovereign with respect to their tax powers and retain those powers that they have not delegated or resigned in some way. But just as this broad authority must be recognized within its own territory, the counterpart is the extraterritorial restriction applicable when it is projected outside its jurisdiction. (4)

In the present case, since the Province has dictated its own regulations regarding money laundering, then it should resign its co-participation fee under the terms of Law 23,548 to be able to freely apply the local tax; Even so, payment could only be required, but only from the province’s own residents.

In other words, the provincial tax can only be applied to local taxpayers or those who have jurisdiction based in Neuquén because it is not extended to residents outside the province; In subsidy, since the local tax falls on the regularized assets, it is analogous to the national co-participating tax under the terms of Law 23,548, and therefore is prohibited by the prohibition of analogy enshrined in the Co-participation Law.

It is common to invoke that the distribution of co-participating funds must be proportional to the powers, services and functions (CN art. 75, inc. 2, paragraphs 3 and 5), an issue that is both difficult to define and apply and easy to violate.

The crisis of the Argentine constitutional system does not seem to be so much an issue of resource allocation but rather a management problem: the reasons why certain provinces exhibit much better indicators than expected, while other jurisdictions cannot overcome secularly the minimum parameters that could be expected of them is an issue that has not yet been clarified in depth.

Final words

In summary, in the event that in a possible discussion the prohibition of analogy enshrined in Law 23,548 of Federal Co-participation is overcome, The new tax would only be applicable to local taxpayers and to those covered by the rules of the Multilateral Agreement based in that province, for the proportion attributable to Neuquén.(5)

Public accountant. Tributary.

(1) CHAPTER II PROVINCIAL REGIME FOR ASSET REGULARIZATION

Article 16: For the purposes of calculating the special tax, it is considered without admitting evidence to the contrary that the total amount of the assets voluntarily declared in the Regime of Title II of National Law 27743 corresponds to income omitted in the tax on the gross income of the Province of Neuquén, in the case of direct taxpayers.

For taxpayers included in the Multilateral Agreement Regime, the amount resulting from multiplying the total amount of assets declared before the AFIP in compliance with National Law 27743, by the unified coefficient corresponding to the jurisdiction of Neuquén that arises from the last DDJJ CM 05 expired on the date of placement in this jurisdiction.

For those subjects who pay taxes under any of the special regimes of the Multilateral Agreement, the percentage that arises from the proportion of the income attributed to the jurisdiction of the Province of Neuquén over the total declared income arising from the last DDJJ CM is taken as a coefficient. 05 of the taxpayer or responsible party expired on the date of placement in this jurisdiction.

Article 17: The subjects mentioned in article 14 of this law must pay a special tax, one time only, on the total amount of assets and holdings declared under the Asset Regularization Regime established in Title II of the National Law 27743, attributable to the Province of Neuquén, in accordance with the provisions of article 16 hereof, which is graduated based on the stages established in article 23 of National Law 27743, in accordance with the following percentages:. . (Omisis).

(2) The unconstitutionality and inappropriateness of taxing money laundering with Gross Income, Fiscal News, 8/27/24

(3) Municipal taxes, federal co-participation and the necessary adherence to regulations, Tax News, 8/13/24

(4) Strictly there is a difference about the power to legislate and the power to demand (Alberto Xavier) but developing it exceeds the purpose of this comment.

(5) The extraterritoriality of powers in general (and tax powers in particular) without an adequate legal basis to support them has given rise to excesses as previously commented. Among others: Local tax power exercised outside provincial jurisdiction. Tax Magazine No. 19; October 2002, page 1605 and Scope of the powers of local jurisdictions: Another perspective on the implications of the Papel Misionero SA case. Rev. Taxes.