January 10, 2019 Argentina establishes temporary duties on export of services Exports of services were previously not subject to export duties. By virtue of a new decree, companies exporting services from Argentina will be subject to an export duty capped at ARS 4 per US dollar from January 1, 2019, until December 31, 2020. On January 2, 2019, the Argentine Executive Power issued Decree No. 1201/2018, establishing a duty on exports of services until December 31, 2020. Background On September 4, 2018, export duties were introduced on the exports of goods until December 31, 2020; since then, further regulations establishing export duties on exports of services have been awaited. As reported in Tax Alert 2018-2470, Law 27,467, published in the Official Gazette on December 4, 2018, amended the Argentine Customs Code to include the export of services within the scope of exports in the Customs Code, thus allowing the application of export duties to them. In turn, the law allowed the Executive Power to impose duties on those exports until December 31, 2020. According to the Treasury Secretary during a press conference and the "whereas" section of the Decree, the Government introduced these new duties on exports as a temporary measure, considering the need for greater tax collection and the significant increase in the exchange rate of the US dollar vis-à-vis the Argentine peso during 2018. Decree No. 1201/2018 The Decree establishes an export duty on exports of services at a rate of 12% with a maximum limit of Argentine pesos (ARS) 4 per each US dollar (USD) of the amount arising from the invoice or equivalent document. Considering an exchange rate of approximately ARS 40 per USD, this limit would currently represent approximately 10% of the value of the service export. For future increases of the foreign exchange rate, the burden of the export duties will decrease in terms of effective percentage. The Decree defines exports of services as services carried out in Argentina whose effective use is carried out abroad. The duty applies to exported services rendered and invoiced since January 1, 2019, including services originated in contracts or transactions initiated before that date, but rendered since that date. Taxpayers must file a return (not yet released) and pay the export duties on services within 15 business days of the month following the month in which the exported services are invoiced. Those companies that exported services for less than USD 2 million in the previous calendar year, however, will have an additional 45 days to pay the duties, counted from the due date of the return (i.e., the 15th business day). Micro and small enterprises, as defined in Law No. 24,467, that export services will pay duties on the export of services that exceeds USD 600,000 in a calendar year. The Decree establishes that the Federal tax authorities will issue the interpretative and complementary rules to enforce these duties and will indicate in those rules which body will be in charge of collecting the duty. ———————————————
| |||||||||||||||||||||
| |||||||||||||||||||||
