November 14, 2022
Argentine Lower House of Congress approves Budget bill for 2023
On 26 October 2022, the Argentine Chamber of Deputies approved the Budget bill for 2023. The bill includes a new disclosure program for unreported foreign currency and the expansion of the normalization program of local and foreign currency for construction investments.1 In addition, the bill incorporates the possibility of deferring the positive tax inflationary integral adjustment in three fiscal periods.
The new bill has been sent to the Chamber of Senators for final approval.
New disclosure program for unreported foreign currency
The bill incorporates a new disclosure program for unreported foreign currency intended for the promotion of investments and production. The disclosure program permits individuals and corporations residing in Argentina to voluntarily declare before the federal tax authorities, the holding of foreign currency in Argentina and abroad within 360-calendar days of the date that the disclosure program enters into force.
The bill imposes a special tax on the value of the declared holdings, according to the following rates:
Individuals and corporations may only use the declared funds for the payment of imports of goods and services destined to their productive activity.
Normalization program of local and foreign currency for construction investments
The normalization program of local and foreign currency for construction investments established by Law 27,613 allowed individuals and corporations residing in Argentina to voluntarily declare the holding of foreign and/or local currency in Argentina and abroad, within 120 calendar days of 12 March 2021.
The normalization program stated that the declared funds were to be used to purchase domestic government bonds and invest in the development of real estate projects in Argentina. The new bill admits the application of the declared funds for the acquisition of a second-hand real estate, provided that one of the two conditions is met:
Deferral of the positive tax inflationary integral adjustment
The bill also provides the possibility for Argentine corporations to defer the positive tax inflationary integral adjustment for income tax purposes under the following conditions:
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
1 For more information, see EY Global Tax Alert, Argentina enacts tax incentives and voluntary disclosure program to promote construction and access to housing, dated 23 March 2021.