The elimination of the caps on payments of debts abroad as of December 17, 2015, will make it easier for taxpayers to pay debts on the importation of goods and services and to participate in the foreign exchange market.

On April 21, 2016, the Argentine Central Bank issued Communication "A" No. 5,855, which eliminates the scheduled timetable established in December 2015 for the payment of outstanding debts abroad related to the importation of goods and services.

Background

On December 10, 2015, when the new Argentine government took office, important measures dealing with foreign exchange matters, as well as customs duties, were announced. The main purpose of the new measures is to relax and regularize several restrictions that the prior government imposed on the foreign exchange market. (For more information, see Tax Alert 2016-41.)

Communication "A" No. 5,850 established a payment schedule for outstanding debts abroad existing as of December 17, 2015, for imports of goods and services. Under the payment schedule, the outstanding debts had to be paid in monthly installments subject to specific caps. The payment schedule eliminated the caps for debts abroad from June 2016 onwards.

Communication "A" No. 5,855

Communication "A" No. 5,855 eliminates the payment schedule as of April 22, 2016. The elimination of the payment schedule means Argentine companies with outstanding debts for importations of goods and services will be allowed to enter the Argentine foreign exchange market and pay debts abroad with no caps on the amount that can be paid.

With the issuance of Communication "A" No. 5,855, the new Argentine government is trying to: (1) eliminate existing restrictions and barriers to the free circulation of funds; (2) attract new investments and capital into the country; (3) promote Argentine export sectors; and (4) reinsert Argentina into international markets.

EY Argentina has an experienced group of professionals specialized in customs, international trade, foreign exchange and tax matters, who can assist you in the evaluation of the effect of these measures, as well as any decision to be taken as a result of these measures.

———————————————