The federal tax authority (FTA) extended to 16 April 2021 the deadline for the presentation of the affidavit and the payment of the “solidarity and extraordinary contribution to help mitigate the effects of the pandemic” (“Contribution“) created by Law No. 27,605 (“Law“).
- In more detail
- Who must pay the Contribution?
- What assets are subject to the Contribution?
- What are the applicable tax rates?
- What is meant by repatriation?
- What powers of the FTA stand out within those contemplated by the Argentine tax regime?
In more detail
On 30 March 2021, Resolution No. 4954/2021 was published in the Official Gazette, by means of which the FTA extended to 16 April 2021 the deadline for the presentation of the affidavit and the payment of the Contribution by the Law.
As a reminder, the main aspects regulated by the Law are as follows.
Who must pay the Contribution?
1. Individuals and undivided estates considered Argentine tax residents, for all of their assets in the country and abroad must pay the Contribution. The taxable basis includes contributions to trusts, private interest foundations and other similar structures, participation in companies, other entities of any type without legal personality for tax purposes and direct or indirect participation in companies or other entities of any type, existing at the date of the entry into force of the law.
2. Individuals of Argentine nationality whose domicile or residence is in “non-cooperating jurisdictions” or “jurisdictions with low or no taxation” will be considered Argentine tax residents for the purposes of the Contribution and, therefore, will be subject to the Contribution for the total assets located in the country and abroad. The taxable basis includes contributions to trusts, private interest foundations and other similar structures, participation in companies, other entities of any type without legal personality for tax purposes and direct or indirect participation in companies or other entities of any type existing at the date of the entry into force of the law.
3. Individuals not included in point 2 and undivided estates, both with tax residence abroad, for all of their assets in Argentina on the date of the entry into force of the Law must pay the Contribution.
What assets are subject to the Contribution?
Individuals and undivided estates are exempt from the Contribution when the value of all their assets does not exceed ARS 200 million (approximately USD 2.5 million). When the aforementioned amount is exceeded, all the assets will be taxed by the Contribution.
What are the applicable tax rates?
Assets located in Argentina are subject to the following tax rates:
|Total value of the assets||Will pay||Plus||On the surplus of ARS|
|More than ARS||To ARS|
|ARS 0||ARS 300,000,000, inclusive||ARS 0||2%||ARS 0|
|ARS 300,000,000||ARS 400,000,000, inclusive||ARS 6,000,000||2.25%||ARS 300,000,000|
|ARS 400,000,000||ARS 600,000,000, inclusive||ARS 8,250,000||2.5%||ARS 400,000,000|
|ARS 600,000,000||ARS 800,000,000, inclusive||ARS 13,250,000||2.75%||ARS 600,000,000|
|ARS 800,000,000||ARS 1,500,000,000, inclusive||ARS 18,750,000||3%||ARS 800,000,000|
|ARS 1,500,000,000||ARS 3,000,000,000, inclusive||ARS 39,750,000||3.25%||ARS 1,500,000,000|
|ARS 3,000,000,000||Onward||ARS 88,500,000||3.5%||ARS 3,000,000,000|
Assets located abroad that are not repatriated are subject to the following tax rates:
|Total value of the assets located in Argentina and abroad||For the total amount of the assets located abroad, will pay|
|More than ARS||To ARS|
|ARS 200,000,000||ARS 300,000,000, inclusive||3%|
|ARS 300,000,000||ARS 400,000,000, inclusive||3.375%|
|ARS 400,000,000||ARS 600,000,000, inclusive||3.75%|
|ARS 600,000,000||ARS 800,000,000, inclusive||4.125%|
|ARS 800,000,000||ARS 1,500,000,000,
|ARS 1,500,000,000||ARS 3,000,000,000,
What is meant by repatriation?
Repatriation is the entrance into Argentina, within 60 days, inclusive, counted from the entry into force of the law, of the following: (i) holdings of foreign currency abroad; and (ii) the amounts generated as a result of the realization of financial assets abroad, which represent at least 30% of the total value of said assets. The Executive Branch may extend the aforementioned term by 60 additional days.
Once the repatriation is made, the funds must remain, until 31 December 2021, deposited in an account opened in the name of its holder in Argentine financial entities included in the regime of Law No. 21,526 and its modifications or affected to any of the destinations to be established by the Executive Branch.
What powers of the FTA stand out within those contemplated by the Argentine tax regime?
When the FTA presumes that an operation constitutes an evasive scheme or it is intended to evade the payment of the tax as a result of variations operated in the assets subject to the Contribution during 180 immediate days prior to the date of entry into force of this law, unless proven otherwise, the FTA may order that those assets be computed for the purposes of the tax audit.