Imagine you want to buy a car, and to do so, you sign up for a savings plan . In these "savings" plans, subscribers pay a monthly fee until, by lottery or auction, they receive the vehicle. Sounds good, right? But this is where something called Stamp Duty comes into play.
What is Stamp Duty?
Stamp duty is a type of tax levied by the provinces. It's as if the provinces were saying, "Every time you sign an important contract, like a savings plan, you're going to have to pay me something for having signed that contract." This tax varies depending on where you live, as each province decides it independently.
What's the problem?
The problem begins when a person living, for example, in the Province of Buenos Aires pays this tax on their car savings plan. But that same person sees that someone living in another province doesn't have to pay it. Is it fair that some provinces charge it and others don't? This is where what is known as federalism and equality before the law comes into play: each province has its own rules, and this sometimes creates differences between citizens of the same country. Furthermore, in some cases, the Stamp Tax can be so high that it makes the savings plan more expensive, which can affect people's access to their vehicles.
What does the Supreme Court say?
To resolve these disputes, the courts often intervene. In a case called "Circulando SA v. Province of Buenos Aires," the Supreme Court of Justice of the Nation (which is our country's highest arbiter of legal matters) ruled that the Stamp Tax should not be charged on these contracts. The Court held that these types of contracts, being intended to save money, should not be subject to this tax. However, some provinces have refused to stop collecting it. It's as if the referee said "there was no foul," but some players continued to commit the infraction.
Why does the conflict continue?
This conflict has to do with fiscal federalism , which is the way the provinces and the national government divide the power to collect taxes. Some provinces depend heavily on these revenues, and that's why they don't want to stop collecting them, even though the Supreme Court has ruled against them.
How does this ruling affect us as citizens?
Now that the Court has ruled that this tax should no longer be charged on savings plan contracts, in theory , no one should pay it anymore. However , there's still a problem: some provinces disagree with this ruling and continue to charge the Stamp Tax on these contracts. It's as if the referee had given an order, but some players refuse to comply. This means that, depending on which province you live in, you may still be paying the tax. In other words, not all provinces immediately abide by the Supreme Court's ruling.
What can I do if I am being charged this tax?
If you're in a province that still charges stamp duty on savings plans, you could:
- Consult with a lawyer or accountant to see if you can request that the tax not be charged based on the court ruling.
- Taking legal action . Many individuals and businesses are taking their cases to provincial courts, relying on this Supreme Court ruling to stop the tax from being collected.