January 11, 2024
Argentine Executive Branch sends bill to Congress that includes new tax measures
The Argentine Executive Branch sent the Congress a bill entitled "Law of Bases and Starting Points for the Freedom of Argentines" (Ley de Bases y Puntos de Partida para la Libertad de los Argentinos, in Spanish) which includes tax developments, among other changes.
Exceptional regularization regime for tax, customs and social security obligations
Under the bill, those with tax, customs and social security obligations may apply to the Regularization Regime with regard to their obligations and infractions due as of 30 November 2023. The application may be filed as of the date that the regulations issued by the Argentine Tax Authorities (AFIP) enter into force and up to 150 calendar days from that date, inclusive.
Applying to the regime will result in the suspension of criminal tax, customs and social security actions in progress and will freeze the criminal statute of limitations.
The following benefits are established for the taxpayers that are included in this regime:
In all the cases, 100% of the fines applied shall be forgiven.
Assets Regularization Regime
Whether or not they were considered Argentine tax residents as of 31 December 2023 or are registered as taxpayers before the AFIP, individuals, undivided estates and corporations may adhere to the Asset Regularization Regime. Likewise, all individuals who do not qualify as Argentine tax residents, but have assets located in Argentina or income they have obtained from Argentine sources, may also adhere to the Regime.
The term to adhere to the Regime will be extended until 30 November 2024.
Adherence with this Asset Regularization Regime requires the taxpayer to adhere to the regime in the manner indicated in the regulations. Subsequently, the taxpayer must file a return. The regulations will establish the formal requirements of the return, which will include the documentation and other information to be provided.
The regime will be divided into three stages. The date of the taxpayer's declaration of adhesion will define the stage of the regime applicable to the taxpayer and/or to the assets regularized in that stage.
The following assets may be subject to this regularization regime:
The taxable base to determine the "Special Regularization Tax" will be calculated in United States (US) dollars and the tax to be paid will be calculated on the total value of the assets, both in Argentina and abroad on the excess of US$100,000.
Depending on the date of adherence to the regime (there are three stages), the tax rate should be 5%,10% or 15% of the value of the assets, on amounts exceeding US$100,000.
Special Regime for the Tax on Personal Assets
The Regimen Especial de Ingreso del Impuesto sobre los Bienes Personales (REIBP) is created for all tax periods until 31 December 2027.
Individuals and undivided estates that are tax residents in Argentina, substitute taxpayers, and individuals who, as of 31 December 2023, are not considered residents, but had been tax residents in Argentina before that date, are covered by the Regime.
Local corporations can also adhere to the Special Regime as substitute taxpayers, for the tax corresponding to their foreign shareholders on their holding ownership interest in the local entity.
The option to adhere to the REIBP is individual and voluntary; taxpayers may choose to adhere until 31 March 2024, inclusive.
Taxpayers who choose to adhere to the REIBP will pay the Tax on Personal Assets corresponding to the fiscal periods 2023, 2024, 2025, 2026 and 2027 in one single payment.
To determine the taxable amount, the total amount of the assets as of 31 December 2023 (or net equity value of the Argentine company as of that date, if ownership interests in those entities are held by foreign shareholders) must be considered and the resulting value, expressed in US dollars, must be converted into Argentine Pesos using the official exchange rate as of 31 December 2023. The resulting amount will be multiplied by five.
Individuals and undivided estates that adhere to the REIBP will apply the 0.75% tax rate on the taxable base and substitute taxpayers will apply the 0.5% tax rate.
To determine the payment to be made under the REIBP, a compensatory interest must be added equivalent to 125% of the interest rate applied by the Banco de la Nación Argentina for 30-day fixed terms for the period between 1 January 2024 and the day before the effective payment.
The regulations will establish the method and other requirements for filing the REIBP return and calculating the tax payable. The total tax liability must be paid by 31 May 2024, inclusive.
New rates for Tax on Personal Assets:
The tax rates applicable will range from 0.50% to 1.50% in 2023; from 0.50% to 1.30% in 2024; from 0.50% to 1.10% in 2025; from 0.50% to 1.00% in 2026; and 0.50% in 2027.
Other tax modifications in the bill include changes in excise taxes and abrogation of the real estate transfer tax for individuals. Non-fiscal changes include changes in the Commercial Societies Law, Insurance Entities Law, and Civil and Commercial Code — including the creation of a new incentive Regime for Large Investments.1