August 20, 2020
Argentine Congress approves bill establishing new tax settlement plan
On 13 August 2020, Argentina’s Congress approved a bill that would establish a new tax settlement plan for individuals and companies doing business in Argentina. The President is expected to sign the bill into law in the coming days. The bill will be enacted once it is published in the Official Gazette.
Once the President signs the bill, taxpayers should continue to monitor the release of further regulations by the Executive Power and the tax authorities.
Characteristics of the plan
The bill would allow taxpayers to settle their outstanding debts as of 31 July 2020, including national taxes, social security taxes (certain exceptions apply) and certain customs debts.
Individuals and corporations not considered small or medium-sized enterprises (MiPYMEs for the Spanish acronym) would not qualify for the settlement plan if they hold financial investments outside Argentina (e.g., deposits in non-Argentine bank accounts, ownership in any non-Argentine entities, trusts, common investment funds or any other investment in non-Argentine instruments). However, those individuals and corporations may qualify for the plan if they repatriate to Argentina 30% of the funds obtained from the sale of those investments within 60 days of entering into the plan. Tax liabilities subject to administrative or judicial procedures could also benefit from this regime.
The deadline to apply for the settlement plan would be 31 October 2020 and the first installment payment would be due on or after 16 November 2020 (depending on the taxpayer and the installment plan chosen).
Taxpayers could enter into an installment payment plan of up to 120 monthly payments. The monthly interest rate would be 2% for the first six months, and a variable interest rate (BADLAR rate in Argentine pesos for local private banks) would apply for the following months.
Taxpayers would receive the following benefits under the settlement plan:
If individuals and corporations not considered as MiPYMEs perform any of the following transactions within 24 months of the enactment date, the settlement plan will terminate, and the plan’s benefits will be lost:
Benefits for compliant taxpayers
Taxpayers that comply with the current tax obligations will have the following benefits:
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 Abogados, Latin American Business Center, Madrid
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific