Sign up for tax alert emails GTNU homepage Tax newsroom Email document Print document Download document | |||
December 18, 2023 Argentina implements new economic measures with impact on tax and foreign exchange matters
The recently inaugurated Argentine Government announced, on 12 December 2023, a series of emergency measures to address the current economic situation. Among the measures' main objectives are reducing the fiscal deficit and regularizing the foreign exchange market. The package of measures includes an increase in the official exchange rate to an average of 800 Argentine Pesos (ARS 800) per USD (on 13 December, the exchange rate at the Banco de la Nación Argentina was ARS 780 for purchase and ARS 820 for sale) — previously, the average exchange rate was ARS 365. The measures also included cuts in public expenditures, reduced energy and transportation subsidies, increases in certain taxes and the elimination of some restrictions on imports and access to the foreign exchange market. Highlights of the main tax and foreign exchange measures follow. Differential exchange rate for exports Decree No. 28/2023, published in the Official Gazette on 13 December 2023, establishes that 80% of the value of goods and services rendered in the country and used or exploited abroad must be entered into the country in foreign currency and/or negotiated through the Free Foreign Exchange Market (FFEM or "Mercado Libre de Cambios" in Spanish), and the remaining 20% through purchase and sale operations in negotiable securities acquired with settlement in foreign currency and sold with settlement in local currency. The rule clarifies that the payment of the corresponding export duties must be made based on the value provided for in the previous paragraph. Increase in "tax for an inclusive and supportive Argentina" on certain transactions On 23 December 2019, the Argentine Government enacted Law No. 27,541. Among the changes implemented, this tax reform law established a new tax on certain purchases of foreign currency ("Impuesto PAIS," in Spanish), including the purchases of foreign currency intended for acquiring certain goods and services from abroad. Decree No. 29/2023 (Official Gazette 13 December 2023), increased the Impuesto PAIS rate applicable to certain operations, according to the following:
These measures will take effect for foreign currency purchases carried out on or after 13 December 2023, inclusive, aimed at canceling the aforementioned transactions. In line with these modifications, the Federal Administration of Public Revenues ("Administración Federal de Ingresos Públicos" or AFIP, in Spanish), through General Resolution No. 5464 (Official Gazette 12/13/2023), increased to 16.625% (previously 7.125%) the prepayment requirement on Impuesto PAIS for the importation of goods now subject to 17.5% tax, according to the modification of Decree No. 29/2023. The increase in the prepayment will apply to import destinations formalized since 13 December 2023. It should be noted that the rates applicable to payments for services, generally 25%, and for imports of luxury goods, generally 30%, remain in force without changes. Reduction of Income Tax and Personal Assets Tax reverse withholdings General Resolution (AFIP) 4815 (Official Gazette 16 September 2020) and amendments, established a reverse withholding regime for Income Tax and Personal Assets Tax on certain purchases of foreign currency. Through General Resolution (AFIP) No. 5463 (Official Gazette 13 December 2023), the reverse withholdings of Personal Assets Tax on purchases are eliminated (previously the rate was 25%), and reverse withholdings on Income Tax are reduced to 30% (previously they amounted to 100%). These reverse withholdings will be considered as tax credits for the local taxpayers and will be creditable in their annual Income Tax return (for taxpayers registered in that tax) or in the annual Personal Assets Tax return (for individual taxpayers registered in the "Monotributo" — a simplified individual tax regime — that are not registered in Income Tax) corresponding to the fiscal year in which the tax was withheld (previously they could be credited in the fiscal year subsequent to the one in which they had been withheld). These modifications will apply to operations carried out after 13 December 2023. Access to the FFEM — Communication "A" 7917 of the Central Bank of Argentina Effective as of 13 December 2023, the Central Bank of Argentina ("BCRA" in Spanish) issued Communication "A" 7917 establishing a series of modifications for accessing the FFEM for payments of goods and services abroad. Payment of imports of goods
Payment of service imports
——————————————— 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
Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor | |||