It is not in vain to remember that the update of losses, the tax update and the comprehensive adjustment are not impacted by Law 23,928 on the convertibility of the austral.
At the same time, it must be kept in mind that the methodology for updating losses is different and independent from other types of updates contained in the LIG (eg computable costs or amortizable values), as stated in the eleventh paragraph of the current art. 25 of the law:
“The losses will be updated taking into account the variation of the Internal Wholesale Price Index (IPIM), published by the NATIONAL INSTITUTE OF STATISTICS AND CENSUS, a deconcentrated body acting within the scope of the MINISTRY OF FINANCE, operated between the closing month of the fiscal year in which they originated and the closing month of the fiscal year that is settled.”.
The aforementioned Law 27,430 replaced article 19 (today 25) of the LIG, so we interpret that the updating of losses can be sustained from article 86 of the tax reform law, which establishes its “…effect for fiscal years or fiscal years beginning on or after January 1, 2018, inclusive…”without any exception.
For all of the above, we interpret that the Legislator has reinstated with Law 27,430 the updating of losses, with full effects and without limitations. This occurs in a context where the same tax reform restored the validity of the tax adjustment for inflation (Title VI of the LIG) and the update of computable costs and amortizable values, with some conditions in both cases.
Informal and non-binding opinion
Some time after having published our opinion on the update of losses, strikingly the National Treasury published on its website, in the “ABC – Frequently Asked Questions and Answers” section, an informal and non-binding opinion with the following scope:
“The first paragraph of article 93 of the Profit Law provides that the updates provided for in the law will be carried out in accordance with the provisions of article 39 of law 24,073.
In turn, the second paragraph of said article establishes the update based on the percentage variations of the general level consumer price index (CPI), which is applicable to the costs and deductions mentioned there, with respect to acquisitions and investments made in fiscal years that begin on or after January 1, 2018, and to assets that have been revalued in the terms of Chapter I of Title X of Law No. 27,430.
By virtue of the above, in the case of tax losses, the updating mechanism provided in the first paragraph of article 93 of the LIG applies.
Source: SDG CTI (12/19/2019)”
More than once we have argued that that opinion is wrong, from a strictly technical point of view. The art. 93 of the LIG is not applicable to all the updates contained in said standard, but only to those that expressly refer to it.
This is the case, for example, with the update of computable costs where all the articles that deal with the topic refer directly or indirectly to art. 93. But there are other updates that are carried out independently of art. 93, such is the case of personal deductions.
On the other hand, art. 39 of Law 24,073 is not applicable to the updating of losses. There it is stated that “For the purposes of the updates of values provided for in Law 11,683… and in the rules of taxes governed by it, not covered by the provisions of Law 23,928, the tables and indices prepared for these purposes by the GENERAL TAX DIRECTORATE to be applied from April 1, 1992, they must, in all cases, take as the maximum limit the variations operated until the month of March 1992, inclusive…”.
The art itself 25 (previously 19) of LIG, when referring to the methodology for updating losses, mentions nothing about tables prepared by the DGI, but rather that the update will be carried out based on the variation of the index that must be determined by the taxpayer himself.
Recently, the opinion of the Undersecretariat of Public Revenue was known in a professional forum, where the highest authority stated that the losses are not updated.
Inspection actions
These days, we see taxpayers who updated ARCA (former AFIP) inspection failures, with inspection requirements that inform the administrator that “…according to the interpretation of the AFIP, the losses are not susceptible to updating…”.
There is no doubt that the Treasury and individuals are the two parties in the tax legal relationship, which is a relationship of law, not power. In a rule of law, as is the case of the Argentine Republic, both have the right to give their opinions differently and discuss their differences in justice.
But whatever concern it may be, what it raises is that of carrying out, by the Treasury, a discussion with a foundation that, technically, is very weak and contrary to the opinion of the majority of the professions with competence in the matter (accountants and lawyers).
And there is more… When decree 18229/1943 introduced a series of modifications to the income tax, the explanatory memorandum of the Ministry of Finance reported the following regarding losses:
“In this way, the cyclical variations of business are taken into consideration and the inconsistency of making taxpayers subject to the tax who, in certain cases being in the process of decapitalization, obtain a lower profit in a certain and extraordinary period, is avoided. amount.
To avoid these INJUSTICES and be closer to the ECONOMIC REALITYthe project allows the compensation of positive and negative results…”.
Contributory capacity and private property
The CSJN expressed a similar opinion in the “Maleic” case.
In other words, The updating of losses makes the correct measurement of the contributory capacity.
The Court has resolved in some cases claims against the impossibility of updating obligations. The conclusions of the case are very interesting. “Chiara Díaz”. It has been said there that, in the context of an “indexed” economy, in which the generality of prices and wages are periodically updated automatically, the omission to readjust a concept is equivalent in practice to diminishing it.
As a result of the previous doctrine, and given that the LIG currently allows the application of the Comprehensive Adjustment (Title VI) and the updating of costs and values (conditional on the date of acquisition or the tax revaluation), it is valid to conclude that The refusal to update the losses constitutes a reduction of them.
Vicente O. Díaz expressed categorically in 1993, “…that already in 1962 the legislator in power had considered losses as a consolidated right and forming part of the subject’s global contributory capacity. // In the “Fundimetal” case the legal root of the value of the loss appears unequivocally. For those who pontificate that they are mere rights in expectation, it is worth remembering that their essence lies as “acquired” rights, protected by norms of substantial category” (2).
Returning to those considerations, at this point we cannot overlook something basic: Losses are part of a taxpayer’s assets, they are part of his “private property”.
Final words
The Executive Branch of the Nation currently defends the inviolability of private property as a basic premise of its management. The May Pact documents this in its first point, with the objective of reconstituting the Foundations of Argentina and reinserting our people into the path of development and prosperity (sic).
Without a doubt, Disregarding the right of taxpayers to update losses due to inflation is contrary to the defense of the inviolability of private property.
The years closed on 12/2023 had an inflation of 211%, those closed on 06/2024 of 270%, the closings of 12/2024 will have an inflation close to 110%. With those figures, Not allowing the updating of losses implies serious damage to the private property of taxpayerscontrary to current law.
For all of the above, we maintain that the position of the National Treasury and the Undersecretary of Public Revenue must be reviewed, in light of the positive law in force, as well as the premises of the May Pact.
Public accountant. Partner of Lisicki Litvin and Assoc. X Studio: @mrcaranta
(1) Martín R. Caranta, “Tax losses, their update”, Errepar Tax Doctrine (DTE), June 2019.
(2) Vicente O. Díaz, “Definition of the legal institute of tax loss”, Errepar Tax Doctrine (DTE).
Source: Ambito
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