Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

December 24, 2019
2019-6659

Argentina amends Tax Consensus between the Federal Government and provincial governments, postponing reductions on certain provincial taxes

On 20 December 2019, the Argentine Senate approved and sent to the House of Representatives the agreement reached between the Federal Government and provincial governments on 17 December 2019, amending the Tax Consensus to postpone reductions on certain provincial taxes. Once approved by the House of Representatives and enacted by the Argentine Executive Power, the amendment must be ratified at the provincial level.

Background

Law 27,429 (later amended by Law 27,469) enacted the Tax Consensus, an agreement between the Argentine Federal Government and provincial governments to implement certain tax policies designed to promote and increase investment, as well as private employment, by reducing the burden of taxes that adversely affect businesses.

Amendment to Tax Consensus

The amendment would suspend until 31 December 2020, the application of the Tax Consensus for the following items agreed to by the provinces:

  • Repeal of the turnover tax on exports of goods (except mining and hydrocarbon activities and related services)
  • Repeal of the turnover tax on exports of services
  • Introduction of caps on turnover tax rates applicable to certain activities
  • Introduction of a real estate tax with rates ranging from 0.5% to 2%
  • Freeze on stamp tax rates for transfers of real estate, automobiles, hydrocarbon activities and complementary services
  • Introduction, for other transactions, of a maximum stamp tax rate of 0.75% beginning 1 January 2019, 0.5% beginning 1 January 2020, and 0.25% beginning 1 January 2021, and elimination of the tax beginning 1 January 2022
  • Repeal of the different treatments of social security taxes based on the place of birth or domicile of employees, except for different treatments based in the place of work
  • Repeal of payroll taxes
  • Repeal of specific taxes on transfers of fuel, gas, electric energy and sanitary services, except for sales to final consumers

Companies doing business and different stakeholders investing in Argentina should consider the consequences of the changes and evaluate the effect on their current Argentine operations.

For additional information with respect to this Alert, please contact the following:

Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

ATTACHMENT

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2023, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct