Limit To Penalties For Unpaid Taxes.

On March 30, 2017, the National Court of Appeals on Civil and Commercial Matters (the "Court"), courtroom "D", in the case captioned "Plásticos Arcobaleno S.A. s/ quiebra s/incidente de revisión por AFIP", affirmed by majority the judgment rendered by the first instance court, and confirmed the 30% limit to penalties for unpaid taxes owed to the Tax Authorities (Administración Federal de Ingresos Públicos, "AFIP").

The Court held that if the penalty imposed by the collection authority exceeds said percentage, then the penalty will be considered "disproportionate" and "contrary to the principle of reasonableness".

The Court asserted that AFIP's power to impose penalties for...