On February 12, 2026, Courtroom B of the National Tax Court (Tribunal Fiscal de la Nación, “TFN”) issued its ruling in the case “Estilo Brokers SRL S/ Apelación”, whereby it overturned by majority the resolutions issued by the Customs Collection and Control Agency (Agencia de Recaudación y Control Aduanero, “ARCA” or Tax Authority), through which Income Tax and Value Added Tax had been assessed ex officio, together with interest and penalties, as well as the extension of joint and several liability to the managing partner of Estilo Brokers SRL (the “Company”), in connection with real estate operations conducted under a RE/MAX franchise.
What was the Tax Authority’s position?
ARCA took the view that there had been an artificial splitting of invoicing and an undue reduction of the taxable base, on the grounds that the Company had failed to declare income derived from real estate transactions carried out by agents and auctioneers associated with the franchise. It also challenged the economic validity of the agreements entered into with those independent agents by invoking the economic reality principle.
The Company appealed the resolutions before the TFN, arguing that:
- Its activity consisted solely in providing ancillary services, administrative support, and marketing to independent agents and auctioneers, without directly participating in real estate brokerage.
- It was the auctioneers who invoiced for real estate brokerage services.
- The agents did not act as employees, but as independent parties who invoiced clients directly for their promotional services.
- The agency agreement was the appropriate legal instrument, supported by private law.
- The economic reality principle may only be applied where there is a manifest discrepancy between legal form and substance.
The TFN’s key findings are summarized below:
- Auctioneers: Both the majority and the dissenting opinion agreed that the participation of the auctioneers in the real estate transactions was indispensable, and therefore their income should be excluded from the tax adjustment.
- Real estate agents: The majority found that it had not been established that the income earned by the agents belonged to the franchised company. It noted that the use of agents’ fees as a basis for calculating royalties does not, in itself, mean that such funds belong to the company.
- Accounting expert evidence: The Court noted that invoices were issued directly by the agents and auctioneers to third parties, not to the audited company, thereby confirming their economic and operational independence.
- Economic reality principle: The majority held that the Tax Authority may not apply this principle on the basis of mere suspicion or generic assertions, but must demonstrate in concrete terms that the legal forms used conceal an economic reality that is different from, and contrary to, the applicable tax rules.
Why does it matter?
The ruling is significant because it limits the expansive use of the economic reality principle by the Tax Authority, and reaffirms that a franchise or commercial cooperation structure alone does not give rise to a presumption of undeclared income or tax simulation. It also underscores the importance of accounting and documentary evidence in establishing the autonomy of independent agents and the proper allocation of tax responsibilities within business models based on commercial networks or franchises.
Status of the case:
The TFN overturned the tax adjustments and penalties imposed, with costs awarded against the Tax Authority.
