Argentina: The FTA extends the deadline for the presentation of the affidavit and the payment of the "solidarity and extraordinary contribution to help mitigate the effects of the pandemic"

In brief

The federal tax authority (FTA) extended to 16 April 2021 the deadline for the presentation of the affidavit and the payment of the "solidarity and extraordinary contribution to help mitigate the effects of the pandemic" ("Contribution") created by Law No. 27,605 ("Law").


In more detail

On 30 March 2021, Resolution No. 4954/2021 was published in the Official Gazette, by means of which the FTA extended to 16 April 2021 the deadline for the presentation of the affidavit and the payment of the Contribution by the Law.

As a reminder, the main aspects regulated by the Law are as follows.

Who must pay the Contribution?

1. Individuals and undivided estates considered Argentine tax residents, for all of their assets in the country and abroad must pay the Contribution. The taxable basis includes contributions to trusts, private interest foundations and other similar structures, participation in companies, other entities of any type without legal personality for tax purposes and direct or indirect participation in companies or other entities of any type, existing at the date of the entry into force of the law.

2. Individuals of Argentine nationality whose domicile or residence is in "non-cooperating jurisdictions" or "jurisdictions with low or no taxation" will be considered Argentine tax residents for the purposes of the Contribution and, therefore, will be subject to the Contribution for the total assets located in the country and abroad. The taxable basis includes contributions to trusts, private interest foundations and other similar structures, participation in companies, other entities of any type without legal personality for tax purposes and direct or indirect participation in companies or other entities of any type existing at the date of the entry into force of the law.

3. Individuals not included in point 2 and undivided estates, both with tax residence abroad, for all of their assets in Argentina on the date of the entry into force of the Law must pay the Contribution.

What assets are subject to the Contribution?

Individuals and undivided estates are exempt from the Contribution when the value of all their assets does not exceed ARS 200 million (approximately USD 2.5 million). When the aforementioned amount is exceeded, all the assets will be taxed by the Contribution.

What are the applicable tax rates?

Assets located in Argentina are subject to the following tax rates:

Total value of the assets

Will pay

Plus

On the surplus of ARS

More than ARS

To ARS

ARS 0

ARS 300,000,000, inclusive

ARS 0

2%

ARS 0

ARS 300,000,000

ARS 400,000,000, inclusive

ARS 6,000,000

2.25%

ARS 300,000,000

ARS 400,000,000

ARS 600,000,000, inclusive

ARS 8,250,000

2.5%

ARS 400,000,000

ARS 600,000,000

ARS 800,000,000, inclusive

ARS 13,250,000

2.75%

ARS 600,000,000

ARS 800,000,000

ARS 1,500,000,000, inclusive

ARS 18,750,000

3%

ARS 800,000,000

ARS 1,500,000,000

ARS 3,000,000,000, inclusive

ARS 39,750,000

3.25%

ARS 1,500,000,000

ARS  3,000,000,000

Onward

ARS 88,500,000

3.5%

ARS 3,000,000,000

 

Assets located abroad that are not repatriated are subject to the following tax rates:

Total value of the assets located in Argentina and abroad

For the total amount of the assets located abroad, will pay

More than ARS

To ARS

ARS 200,000,000

ARS 300,000,000, inclusive

3%

ARS 300,000,000

ARS 400,000,000, inclusive

3.375%

ARS 400,000,000

ARS 600,000,000, inclusive

3.75%

ARS 600,000,000

ARS 800,000,000, inclusive

4.125%

ARS 800,000,000

ARS 1,500,000,000,
inclusive

4.5%

ARS 1,500,000,000

ARS 3,000,000,000,
inclusive

4.875%

ARS 3,000,000,000

Onward

5.25%

 

What is meant by repatriation?

Repatriation is the entrance into Argentina, within 60 days, inclusive, counted from the entry into force of the law, of the following: (i) holdings of foreign currency abroad; and (ii) the amounts generated as a result of the realization of financial assets abroad, which represent at least 30% of the total value of said assets. The Executive Branch may extend the aforementioned term by 60 additional days.

Once the repatriation is made, the funds must remain, until 31 December 2021, deposited in an account opened in the name of its holder in Argentine financial entities included in the regime of Law No. 21,526 and its modifications or affected to any of the destinations to be established by the Executive Branch.

What powers of the FTA stand out within those contemplated by the Argentine tax regime?

When the FTA presumes that an operation constitutes an evasive scheme or it is intended to evade the payment of the tax as a result of variations operated in the assets subject to the Contribution during 180 immediate days prior to the date of entry into force of this law, unless proven otherwise, the FTA may order that those assets be computed for the purposes of the tax audit.

Spanish version

Contact Information

Copyright © 2023 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.