In its opinion issued on August 12, 2026, in the case *“L’Oréal Argentina S.A. v. Municipality of Posadas, administrative litigation action”*¹, the Office of the Attorney General of the Nation (the “Office of the Attorney General”) took the view that the rejection of the claim for reimbursement of the DIRSC and of the issuance of the certificate excluding the claimant from the Withholding and Collection Regime applicable to such Tax was arbitrary and improper. This was so because the Superior Court of Justice of Misiones (the “SCJ”), in upholding such rejection², reasoned that the claimant was registered as a taxpayer under the Multilateral Agreement, reported business activity in the Province of Misiones, and conducted transactions with taxpayers located in the City of Posadas (even where such transactions were carried out outside the municipal boundaries), a circumstance which, in its view, provided sufficient “territorial nexus” to support the collection of the DIRSC.
The opinion, however, held that the SCJ of Misiones’ dismissal of the claim was arbitrary because it failed to duly address the arguments advanced by the claimant from the administrative stage onward and reiterated in its complaint: namely, the absence of the taxable event giving rise to the DIRSC (among other grounds, because the claimant was not a taxable person subject to the Tax), the absence of a territorial nexus (due to the claimant’s lack of a physical presence within the municipal jurisdiction), and the lack of actual provision of the public services described in the applicable legislation. Nor did the court assess the evidence submitted in the proceedings.
In reaching its conclusion, the Office of the Attorney General held as follows:
i) The DIRSC are taxes in the nature of fees, as the claimant has maintained since its initial filing in the proceedings.
The opinion reaches this conclusion by applying the case law of the Supreme Court of Justice of the Nation (the “SCJN”), including the decisions in Laboratorios Raffo S.A. v. Municipality of Córdoba³ and others⁴, from which it follows that taxes are classified as: taxes in the strict sense, fees, and special assessments, irrespective of the nomen juris assigned to them by the legislature. Thus, fees are levies whose collection necessarily presupposes that the State organize, make available, and actually provide taxpayers with a service, payment for which the taxpayer may not refuse, even if it does not use such service or has no interest in it, insofar as the service is intended to serve the general interest.
Accordingly, there can be no reasonable doubt that the Posadas legislature, under the current Article 109 of the Municipal Tax Code (Ordinance XVII-155, hereinafter, the “MTC”), characterized the DIRSC as a fee, since its purpose would be to compensate the State for a series of governmental activities concerning the taxpayer, in accordance with the SCJN’s decision in Berkley International A.R.T. S.A. v. E.N. (M° E Y OSP) – Decree 863/98 – action for protection under Law 16,986⁶, among others⁷.
Accordingly, the taxable event giving rise to the DIRSC requires, as a condition for its accrual, the actual provision of the services described in the applicable legislation to the person from whom payment is demanded. In the present case, since the claimant denied having received such services, the burden rested upon the Municipality to establish that the services had in fact been provided, as discussed below.
ii) Based on the foregoing, the opinion held that the absence of any business premises, warehouse, or real property of any kind duly authorized in the claimant’s name entails the absence of the territorial nexus required for the collection of the DIRSC.
At this point, it is important to note that, although the opinion under consideration does not expressly address this issue, under the current Article 110 of the MTC (Article 108 under the numbering in effect at the time of the events giving rise to the case), persons liable for the DIRSC include those engaging in profit-making commercial, industrial, professional, or other activities—whether or not conducted for profit, and whether on a regular, temporary, occasional, or sporadic basis—carried out, performed, completed, or established within the municipality, regardless of whether they maintain business premises or offices from which to conduct such activities. The provision expressly includes transactions or services performed from other jurisdictions with respect to persons, property, or assets located or economically used within the boundaries of Posadas, “such as transactions between absent parties.”
Nevertheless, for years the Municipality—with the purpose of ensuring collection of the DIRSC from persons lacking a physical presence in Posadas—has maintained a Withholding and Collection Regime established by General Resolution No. 1/2012 of its Directorate General of Revenue.
Accordingly, under General Resolution No. 1/2012, persons subject to such withholdings include merchants, manufacturers, distributors, among others, whose products are marketed in Posadas even if they do not maintain duly authorized premises within the Municipality.
In short, the municipal regulations seek to collect the Tax even from persons who do not maintain business premises, real property, or an establishment of any kind in Posadas and, in order to secure collection of the DIRSC, established the aforementioned Withholding and Collection Regime. As a result, withholding agents were required to withhold the Tax from the claimant even though the claimant lacked a territorial nexus with Posadas and did not sell its products there, but rather such products were brought into the municipal jurisdiction by independent third parties.
iii) Direct application of the SCJN’s longstanding and uniform doctrine establishing that the collection of a fee must always correspond to the concrete, actual, and individualized provision of a service relating to something that is itself no less individualized—whether property or an act—of the taxpayer.⁸
This requirement is significant beyond the academic sphere, insofar as it is precisely the actual provision of the service that, pursuant to Article 9(b) of Law No. 23,548, permits fees charged in consideration for services to be exempted from the prohibition against imposing local levies analogous to shared national taxes.
Likewise, the opinion reiterates that the burden of proving the existence of a territorial nexus and the actual provision of divisible public services rests upon the State, in accordance with the aforementioned case law.
On the basis of these three grounds, the Office of the Attorney General concluded that the complaint should be upheld, that the extraordinary federal appeal had been improperly denied, that the challenged judgment should be reversed, and that the competent authority should be instructed to issue a new decision in accordance with law.
Evidence Produced in the Proceedings
One of the most relevant aspects of this type of litigation—and one that the Office of the Attorney General expressly emphasized by placing the burden of proof upon the Municipality—is the concrete evidence that the claimant was able to assemble to establish the absence of a territorial nexus and of actual provision of the service, as contrasted with the limited evidentiary activity undertaken by the Municipality, upon which the burden of proof in fact rested.
In this regard, the opinion notes that the Municipality failed to submit to the proceedings any inspection or audit report concerning the claimant, nor any records evidencing surveys or inspections conducted by the Municipality regarding the health and safety conditions under which the claimant allegedly operated in the Municipality of Posadas. In short, the Municipality produced no document, resolution, or formal demand evidencing the provision or making available of any specific, actual, and individualized service.
The Office of the Attorney General’s Doctrine: Territorial Nexus and Actual Provision of the Service
As noted above, guided by these premises, the opinion expressly disagrees with the reasoning adopted by the Municipality and the SCJ of Misiones, which led them to reject the claim for reimbursement and the issuance of the exclusion certificate. According to that reasoning, the mere “final destination” of products sold and delivered in another jurisdiction (which their purchasers subsequently transport to and market in Posadas) would be sufficient to establish that the company conducts economic activity within the municipal boundaries and that such circumstance constitutes a territorial nexus.
The Office of the Attorney General explains that the allocation of revenues to a jurisdiction for purposes of determining the unified coefficient under the Multilateral Agreement, for purposes of calculating the Gross Turnover Tax, does not establish that the taxable event giving rise to a fee has occurred, nor does it establish the existence of a territorial nexus. This is particularly noteworthy because the existence of such revenues, derived from the conduct of a profit-making activity, gives rise to the taxable event for purposes of the Gross Turnover Tax, but can never, in and of itself, be sufficient to constitute the taxable event of a fee. As already noted, fees require a territorial nexus, evidenced by the existence of duly authorized business premises or real property and by the actual provision of divisible public services to the taxpayer—an element which, according to the Office of the Attorney General, both the Municipality and the challenged judgment failed to identify.
Along the same lines, the opinion rejects the proposition that the so-called “benefit derived from the advantages” that a major city may provide to persons marketing products intended for that city can substitute for the absence of a specific, actual, and individualized service. Accordingly, neither the Municipality nor the challenged judgment succeeded in identifying or establishing the existence of inspection reports, health and safety surveys, or any other documentation evidencing the provision of the services described in the applicable legislation or the making available of such services to the claimant, in accordance with the SCJN’s case law, including, for example, Compañía Química S.A. (cited above).⁹
Conclusions
The opinion issued by the Office of the Attorney General of the Nation discussed herein reaffirms, once again, that a territorial nexus and the concrete, actual, and individualized provision of a service are indispensable and inseparable requirements for the constitutional validity of a municipal fee. Neither requirement may be deemed established through generic presumptions—such as registration under the Multilateral Agreement or the “final destination” of goods sold to third parties—or by shifting the burden of proof onto the taxpayer.
For companies that, despite having neither business premises nor a physical presence in a municipality, are nevertheless subject to local tax withholding or collection regimes, this opinion, consistent with the longstanding doctrine cited therein, constitutes a strong and current legal basis for seeking permanent exclusion from such regime and, consequently, preventing withholding agents from continuing to deduct amounts without legal cause from each commercial transaction.