The Supreme Court stopped the internal customs imposed by Salta and Santa Fe

The Supreme Court of Justice issued a ruling with a strong impact on the Argentine tax system and placed a concrete limit on one of the most frequent provincial abuses: charging higher Gross Revenue to companies located outside their territory. In three decisions against Salta and Santa Fe, the highest court declared these schemes unconstitutional, considering that they functioned as true “internal customs”, something expressly prohibited by

the Constitution.

The decision was signed by Horacio Rosatti, Carlos Rosenkrantz and Ricardo Lorenzetti, and consolidates a line of jurisprudence that had already started in 2017 with the “Bayer” case. Provinces retain fiscal autonomy, but they cannot use it to harm competitors from other jurisdictions or to break the unity of the

national market.

One of the key files was that of Pbricadora Veneziana S.A., a Cordovan firm that discussed a rule of the Salta Tax Code that granted benefits only to those who had their industrial plant located within the province. Within this framework, the Directorate General of Revenue intended to apply a rate of 3.6% and also a fine of 60%. A similar approach reached Comercial Rossi S.A., also from Córdoba. The Court had already cautiously curbed these advances, and now it has set firm on the substantive criteria.

In Santa Fe, the case was that of Rieles y Cosas S.A., a company based in Buenos Aires, which had to tax a rate of 4.5%, while the Santa Fe industries paid 3.5%. The province tried to justify that difference as a local promotion policy, but the court rejected that argument and found that it was a direct barrier to interprovincial trade

.

The ruling highlights that these maneuvers violate three constitutional pillars: the principle of equality before the law, the commercial clause that reserves the regulation of trade between jurisdictions to Congress, and the historic prohibition of establishing internal customs. No province can disguise as a local incentive what is actually fiscal punishment for those who produce or invest from another

province.

The Court reminded the provinces that federalism does not enable economic fragmentation or the creation of internal barriers to trade.