In focus
The Resolution established the following:
- It suspends the application of exclusion certificates for the payment of (i) income tax advance payments on the importation of certain goods and (ii) VAT advance payments on the importation of certain goods until 30 June 2025, inclusive.
- It stipulates that, until 30 June 2025, inclusive, (i) income tax advance payments on the importation of certain goods will not be deductible when calculating the monthly income tax payments due annually and (ii) VAT advance payments on the importation of certain goods may be fully credited without any restrictions.
- It excludes the following imports from the regime: (a) imports for consumption by micro and small companies with a valid "MiPyME" certificate at the time of importation; (b) imports for consumption on behalf of the National State; and (c) imports for consumption exempt from national taxes under Law No. 27701.
Effects
The application of the Resolution could, in many cases, lead to an increase in VAT and income tax credit balances.
To understand the full impact of the Resolution, we have included a description of the import duties and taxes payable upon the importation of goods.
The importation of goods into Argentina is governed by the Customs Code (Law No. 22415), its regulatory Decree No. 1001/82 and other provisions issued by the Customs Authority. Import duties generally range from 0% to 35%, calculated on the CIF value of the goods. Through Law No. 24425, Argentina approved the World Trade Organization Agreement and the Uruguay Round of the GATT, including the valuation rules.
In addition to the import duties, an importer is required to pay: (i) a statistics fee of 3% of the customs value (normally CIF value) of the imported products, subject to a maximum of USD 150,000, depending on the value of the goods; (ii) VAT, at the applicable rates, based on the tariff classification number of the goods, calculated on the aggregate of the CIF value, import duties and the statistics fee; (iii) a 10% or 20% VAT advance payment and a 6% or 11% income tax advance payment on the importation of certain goods as described in (ii); and (iv) an advance gross receipts tax.
The following formula shows how to calculate the total import duties and taxes for a shipment imported into Argentina:
Import duty + statistics fee + VAT + VAT advance payment + income tax advance payment + advance gross receipts tax = total import duties and taxes
- Import duty = (value of merchandise + freight + insurance) x (duty rate, 0% to 25%)
- Statistics fee (if applicable) = [0.5% of (value of merchandise + freight + insurance)]
- VAT = [(value of merchandise + freight + insurance) + import duty + statistics fee] x 21% or 10.5%, as applicable
- Income tax advance payment = [(value of merchandise + freight + insurance) + import duty + statistics fee] x 6% or 11%, as applicable
- VAT advance payment = [(value of merchandise + freight + insurance) + import duty + statistics fee] x 10% or 20%, as applicable
- Advance gross receipts tax = [(value of merchandise + freight + insurance) + import duty + statistics fee] x applicable rate
VAT impact
Among other taxable events, VAT is levied on the importation of goods as described in points 3. and 5. above. In these cases, the local importer is required to pay the VAT arising from the importation of goods (VAT debit) in cash to the FTA. However, the importer is entitled to compute a VAT credit for the same amount to offset the VAT collected from customers on transactions subject to VAT.
Normally, if certain requirements are met, importers of goods can apply for VAT exemption certificates to be exempted from the obligation to pay VAT advance payments on certain definitive import operations.
According to the Resolution, until 30 June 2025, (a) VAT exemption certificates will be suspended, meaning importers will have to pay the VAT advance payment described in point 5. above; however, (b) the VAT advance payment may be fully credited without any restrictions.
Income tax impact
Corporate taxpayers are required to make 11 monthly payments on account of their annual income tax liability. For these monthly payments, the income tax advance payments described in point 4. above, among other items, are deducted from the taxable base. This means that the final amount of the 11 monthly payments is calculated after deducting, among other items, the income tax advance payments described in point 4. above.
Normally, if certain requirements are met, importers of certain goods can apply for income tax exemption certificates to be exempted from the obligation to pay income tax advance payments on definitive import operations of certain goods.
According to the Resolution, until 30 June 2025, (a) income tax exemption certificates will be suspended, meaning importers will have to pay the income tax advance payment described in point 4. above, and (b) income tax advance payments described in point 4. above will not be deductible when calculating the monthly payments on account of the annual income tax.
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