Banco Galicia wins municipal tax dispute in Supreme Court

Banco Galicia secured a favorable ruling from Argentina's Supreme Court in a tax dispute against the Municipality of Córdoba. The top court overturned a previous decision by the Superior Court of Justice of Córdoba that had endorsed the collection of a municipal charge on the lender's activity.

The dispute started in 2008 when Córdoba's tax agency assessed a debt against Banco Galicia for its contribution on commercial, industrial, and service activities. The assessment covered fiscal periods between 2001 and 2005, along with added interest and penalties.

Supreme Court President Horacio Rosatti and judges Carlos Rosenkrantz and Ricardo Lorenzetti established that a municipal fee cannot become a tax under another name. The court held that municipalities must prove they organized and made a specific service available to the taxpayer, and that the fee must bear a reasonable relationship to the overall cost of providing that service.

The ruling comes amid ongoing clashes between national authorities and local governments over municipal levies. In late 2024, Economy Minister Luis Caputo prohibited charging non-related municipal fees on essential utility bills, while other lenders such as Banco Nación and Banco Santander have closed or relocated branches in jurisdictions like La Matanza to avoid heavy local taxes.