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07 May 2024

Argentina applies 17.5% tax on purchases of foreign currency for dividend and profit distributions

On 6 May 2024, the Argentine National Executive Branch published in the Official Gazette Decree No. 385/2024, amending Decree No. 99/2019 with regard to the tax on purchases of foreign currency ("Impuesto PAIS," in Spanish).

Specifically, the amendments apply the Impuesto PAIS to the remittance of profits and dividends abroad at a rate of 17.5%, under the following circumstances:

  1. Transfers of dividends with access to the official foreign exchange market through item I03 according to the Monthly Accounting Information System for Foreign Exchange Transactions ("Regimen Informativo Contable Mensual para Operaciones de Cambio," in Spanish) of the Argentine Central Bank (BCRA)
  2. Purchases of foreign currency for the repatriation of nonresidents' portfolio investments generated in the collection of profits and dividends in Argentina since 1 September 2019, inclusive

    In this case, the financial entity through which the operation is carried out should act as a collection and settlement agent of the applicable Impuesto PAIS.

  3. Subscription in Argentine Pesos of "Bonds for the Reconstruction of a Free Argentina" (BOPREAL) issued by the BCRA when they are acquired to: (i) pay profits and dividends and/or (ii) repatriate nonresidents' portfolio investments generated in the collection of profits and dividends in Argentina received since 1 September 2019, inclusive1

The tax must be determined on the total amount of the transaction and collected at the time the debit of the subscription is made.

The subscriber must pay the tax, but the financial entity through which the subscription is made shall act as collection and settlement agent.

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Endnote

1 For background, see EY Global Tax Alert, Argentine Central Bank allows subscription of BOPREAL to pay profits, dividends to nonresidents, dated 3 May 2024.

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Contact Information

For additional information concerning this Alert, please contact:

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

Document ID: 2024-0923

 
 

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