On April 8, 2025, Chamber III of the National Court of Appeals in Federal Administrative Matters, in the case “Yege, Juan Martín Amado v. EN-AFIP-DGI-RESOL 13/22 on declaratory process”, issued a judgment concerning the moment at which tax residency is lost and its legal effects.
Applicable Law
Tax residency in Argentina is governed by the Income Tax Law (Ley de Impuestos a las Ganancias, hereinafter, the “Law”), specifically Articles 116 to 123 of Title VIII, Chapter I. Article 117 of the Law provides that tax residency is lost in the following situations:
1. Acquisition of permanent residency in a foreign country: when a person obtains permanent resident status abroad under that country’s migration laws.
2. Continuous presence abroad for 12 months: if permanent residency abroad has not been previously acquired, then a continuous 12‑month stay abroad results in the loss of Argentine tax residency. Temporary presences in Argentina not exceeding a total of 90 days—whether consecutive or not—within any 12‑month period do not interrupt the continuous stay abroad.
In accordance with the final paragraph of Article 117, the loss of residency takes effect “from the first day of the month immediately following the one in which permanent residency was acquired abroad or the 12‑month period was completed,” as applicable.
Article 119 of the Income Tax Law outlines how to prove loss of Argentine residency depending on the situation:
1. If the event occurs before leaving Argentina, the taxpayer must notify the tax authority1 ..
2. If it occurs after departure, proof must be submitted at an Argentine consulate in the country where the taxpayer is located at the time. The consulate must then inform the tax authority.
Factual Background
Juan Martín Amado Yege (the “Plaintiff”) had been residing permanently in Paraguay since January 11, 2019.
On March 26, 2020, he filed for de-registration from Income Tax and Personal Assets Tax effective retroactively to January 11, 2019, claiming that he had fallen under Article 117’s first clause upon becoming a Paraguayan resident on that date per Paraguayan migration law.
The Federal Administration of Public Revenues (“AFIP”, after its spanish acronym, renamed “ARCA”) processed the request, terminating his registration as of February 2020, but denied the retroactive date back to January 11, 2019. AFIP argued:
1. The 12‑month continuous absence ended on January 11, 2020.
2. The Plaintiff continued filing tax returns without disclosing his foreign residency.
3. He failed to request de‑registration in a timely manner after losing residency.
AFIP also noted non-compliance with Articles 3 and 4 of General Resolution 2322/2007:
1. Article 3 requires the deregistration request be submitted no later than the last business day of the month following cessation of taxable conditions.
2. Article 4 holds that missing this deadline means continued legal obligations until the request is actually made, and any legal consequences are borne by the taxpayer.
The Plaintiff appealed this administrative denial, which was rejected. He then filed a contentious-administrative suit against AFIP in Federal Court No. 5, which ruled on March 11, 2023, that Article 117 refers solely to residency status, not to tax obligations of a non-resident, and affirmed that the law sets the conditions for changing residency for tax purposes. Consequently, his claim was dismissed and he appealed.
Chamber III’s Decision
Chamber III undertook a detailed analysis of tax residency and deemed it reasonable that loss of residency severs the taxpayer’s relationship with Argentina and its taxing authority over income not sourced in the country.
They emphasized that residency is lost automatically and takes effect as specified in the final paragraph of Article 117—i.e., from the first day of the following month.
Furthermore, they stated:
“There is no contradiction between the moment when, under the law, the effects of losing residency begin (Art. 117, in fine) and when this is reported or proven; although consequences for late reporting are foreseen, they do not alter the taxpayer’s link to the national tax system regarding the taxes under review.”
Therefore, the Court concluded that reporting or proving loss of residency is a procedural control, not a constitutive legal requirement.
Chamber III reversed the lower court’s judgment and annulled AFIP’s resolution. Each party was responsible for its own legal costs given the novel nature of the question.
ARCA has filed an extraordinary federal appeal with the Supreme Court of Justice of the Nation, which remains pending, and thus the decision is not yet final.
