Analysis of the judgment in “Mutual de Ayuda entre Ferroviarios Activos y Jubilados de la Fraternidad Sección Pergamino FC Mitre v. Municipalidad de Pergamino, declaratory action for legal certainty” (CSJN, Case No. 1105/2023/RH1, 10 September 2026).
On 10 September 2026, the Supreme Court of Justice of Argentina (the “CSJN” or the “Court”) granted the complaint filed by Mutual de Ayuda entre Ferroviarios Activos y Jubilados de la Fraternidad Sección Pergamino FC Mitre, admitted the federal extraordinary appeal, and set aside the judgment issued by the Supreme Court of Justice of the Province of Buenos Aires (the “SCJBA”), which had upheld the collection of the Safety and Hygiene Inspection Fee (TISH) by the Municipality of Pergamino.
The central issue addressed by the CSJN concerned the constitutional limits applicable to the taxing powers of municipalities. Although the case reached the CSJN after having gone through the various levels of the administrative litigation courts of the Province of Buenos Aires, with differing views expressed at the various stages of the proceedings, the plaintiff’s claim was ultimately upheld by the Court.
From the outset of the proceedings, the Mutual based its claim on a number of arguments of different kinds. In particular, it relied on the exemption applicable to mutual associations from all taxes, fees and special assessments imposed on their assets and transactions, as provided for under Article 29 of the Organic Law on Mutual Associations (Law No. 20,321); the prohibition against the application of analogy set forth in Article 9(b) of the Federal Tax-Sharing Law (Law No. 23,548); and Articles 17, 28 and 31 of the Argentine Constitution. It also based its claim on Article 41 of the Constitution of the Province of Buenos Aires, which requires the provincial government to promote the organization and development of cooperatives and mutual associations and to grant them tax treatment consistent with their nature.
However, the core argument of the claim challenged the constitutionality of the TISH on the grounds that the service that would justify its collection had not been effectively provided. As an additional argument, the Mutual relied on the exemption established under Article 29 of Law No. 20,321.
The Merits: What the Court Held Regarding the Validity of the Fee
i. Burden of Proof and Protection Against the Requirement to Prove a Negative Fact
The Court reaffirmed two closely related principles. First, where a taxpayer denies having received the service, the taxpayer cannot be required to prove a negative fact that is practically impossible to establish. Second, and as a corollary of the foregoing, it is the municipality that must provide conclusive evidence that the relevant activity or inspection was actually carried out, since the municipality is in a better technical and operational position to do so.
This allocation of the burden of proof is not an innovation introduced by this judgment. It is grounded in precedents such as “Quilpe S.A. v. Municipalidad de La Rioja, action for a declaration of unconstitutionality” (Fallos 335:1987, judgment of 9 October 2012) and, further back, the doctrine established in “Llobet de Delfino, María Teresa v. Provincia de Córdoba, action for recovery” (Fallos 275:407, judgment of 28 November 1969), subsequently consolidated in “Compañía Química S.A. v. Municipalidad de Tucumán, administrative litigation appeal and action for a declaration of unconstitutionality” (Fallos 312:1575, judgment of 5 September 1989), among many others.
In the present case, the municipality was only able to prove that one inspection had taken place, on 21 October 2016, i.e., after service of process of the complaint on 14 October 2016. The Court identified a logical contradiction in the judgment of the provincial Supreme Court: on the one hand, it acknowledged, based on that single documentary record, that the Mutual had only been inspected in 2016; on the other hand, it held that the absence of inspections during the preceding half-century “had not been proven.”
In the CSJN’s view, this amounted to a “serious and evident contradiction,” since the party bearing the burden of proving the provision of the service could not benefit from the lack of evidence concerning the period actually at issue.
ii. Rejection of the “Reasonable Periodicity” Theory Based on Voluntary Compliance
The CSJN specifically addressed and rejected the central argument adopted by the SCJBA, according to which periodic inspections should not be required because doing so would run counter to “modern regulatory techniques based on voluntary compliance founded on deterrence.”
The Court held that this reasoning incorrectly transfers the logic applicable to taxes—where the risk of inspection operates as a deterrent against non-compliance and the tax is not linked to any specific government service—to the logic of fees levied in consideration of services, where the inspection is not intended to encourage payment, but rather constitutes, in itself, the service that the State must provide.
In the Court’s words, the requirement that the service be “effectively” provided, reaffirmed by Article 9(b) of Law No. 23,548, makes the periodicity of the service “an essential attribute of the fee, ensuring that the services are actually provided and that the fee does not constitute a disguised tax.”
iii. Moving Beyond Confiscatory Taxation as the Sole Standard of Review
This is one of the most significant aspects of the judgment. The Court made clear that, in order to constitutionally challenge the amount of a fee, it is not necessary to establish that the tax is confiscatory. A fee may also be invalid where, even if it does not reach that threshold, its amount is unreasonable or disproportionate in relation to the service it is intended to finance. Accordingly, confiscatory taxation is not the sole standard for assessing the constitutional validity of a fee.
Instead, the Court revisited a line of precedents such as “Ana Vignolo de Casullo v. Municipalidad de la Ciudad de Buenos Aires” (Fallos 192:139, judgment of 6 March 1942); “Banco de la Nación Argentina v. Municipalidad de San Rafael” (Fallos 234:663, judgment of 16 May 1956); “Empresa de Transporte de Pasajeros Navarro Hnos. S.R.L. v. Municipalidad de Puerto Tirol, action for a declaration of unconstitutionality against Ordinance No. 068/90” (Fallos 319:2211, judgment of 10 October 1996); “Empresa Pesquera de la Patagonia y Antártida S.A. v. Tierra del Fuego, Antártida e Islas del Atlántico Sur, Province of, action for a declaration of unconstitutionality” (Fallos 338:313, judgment of 29 April 2015); and “Esso Petrolera Argentina SRL v. Municipalidad de Quilmes, administrative litigation action” (Fallos 344:2123, judgment of 2 September 2021).
Building on these precedents, the Court developed an analysis based on the reasonableness and proportionality of municipal fees, identifying two limits: first, the total amount collected in relation to the cost of the service; and second, the use of the taxpayer’s ability to pay as a criterion for allocating that cost among taxpayers.
The first limit means that the revenue generated by the fee cannot disproportionately exceed the overall cost of organizing and making the service available. In this regard, the Court accepts as a benchmark an amount of up to twice such cost, such that, once that threshold is exceeded, the surplus may indicate that the levy has, in substance, become a tax.
The second limit concerns the use of ability to pay. This criterion may be used to allocate the cost of the service among different taxpayers, so that those with greater economic capacity bear a greater proportion of that cost. However, it may not be used to distort the nature of the fee and transform it into a tax.
Conclusion
This judgment confirms and further develops the CSJN’s line of precedent concerning municipal fees, reaffirming that the burden of proving the effective provision of the service lies with the municipality, while moving beyond confiscatory taxation as the sole permissible standard for reviewing the amount of the levy, in favor of a stricter proportionality test, with a quantitative benchmark of up to twice the overall cost of the service.
From a substantive standpoint, this is neither an isolated decision nor a complete departure from prior case law. Rather, the judgment applies and further develops a line of precedents consolidated over more than three decades: the requirement that a service be concrete, effective and individualized, together with the allocation of the burden of proof to the municipality where the taxpayer denies having received it, is common to those precedents.
What is more novel within this continuity is the Court’s development of the proportionality and confiscatory-taxation analysis described above, which moves beyond the standard that had been applied by the highest provincial courts.
From a procedural standpoint, however, the case does present a distinctive and relatively uncommon feature: the specific combination of a preventive declaratory action for legal certainty, initiated exclusively within the provincial jurisdiction, without resort to federal jurisdiction, which proceeded through four levels of review with differing outcomes before triggering the standard of manifest arbitrariness before the CSJN.