Taxpayers should monitor the release of a new procedure for the payment of capital gains tax incurred by non-residents.

On January 12, 2018, Argentina published General Resolution No. 4190-E/2018 (the Resolution) in the Argentine Official Gazette, revoking General Resolutions No. 4094-E/2017 and 4095-E/2017, which had respectively established and suspended a procedure for paying capital gains tax incurred by non-residents.

The Resolution indicates that the tax authorities consider appropriate the elimination of the procedure included in Resolution No. 4094-E/2017, because a new procedure will be implemented as a result of the recent tax reform enacted through Law 27,430.

For transactions involving non-listed shares that have taken place since September 2013 and were subject to the non-resident capital gains tax, taxpayers should review each particular case and monitor the issuance of new regulations.

Background

On July 18, 2017, General Resolution No. 4094-E/2017 was published in the Argentine Official Gazette, establishing the procedure for withholding and paying capital gains tax incurred by nonresidents, which was introduced into the income tax law in 2013. While the 2013 tax required nonresident buyers to assess and pay the tax in certain circumstances, no regulations addressed the procedure and steps to be followed.

On July 20, 2017, General Resolution No. 4095-E/2017 was published in the Argentine Official Gazette, suspending for 180 days the application of General Resolution No. 4094-E/2017.

Resolution No. 4190-E/2018

The 180-day suspension period would have expired in mid-January 2018, but the Resolution now eliminates the payment procedure implemented by General Resolution No. 4094-E/2017. Such procedure was based on the fact that non-resident buyers were required to remit the tax payment. As commented, a new procedure following the provisions of Law 27,430 will be established, and such new procedure will be based on the fact that foreign sellers, through representatives appointed in Argentina, will be responsible for paying the tax.

Different stakeholders involved in transactions dealing with the transfer of non-listed shares of Argentine companies should monitor these rules and the issuance of a new procedure for the payment of the non-residents' capital gains tax.

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