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Argentina: Tax on the Acquisition of Foreign Currency – Extended to new transactions and introduction of new Collection Regime of 25%

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In brief

  • On 13 October 2022, Decree No. 682/2022 (“Decree“) and Resolution No. 5272/2022 (“Resolution“) were published in the Official Gazette. With respect to certain transactions covered by the Tax on the Acquisition of Foreign Currency (“Tax“), the Federal Tax Authority (FTA) added a new Collection Regime at a rate of 25% to the acquisition of foreign currency for certain payments through the Resolution.
  • By means of the Decree, payments for the (i) acquisition abroad of personal, cultural and recreational services (not including education), in accordance with the Central Bank of Argentina (BCRA) regulations, and (ii) the import of goods listed as “sumptuous” are also levied by the Tax at a rate of 30%.
  • The Decree and the Resolution will apply to the operations carried out as of 13 October 2022.

In focus

1. General considerations

On 13 October 2022, the Decree and the Resolution were published in the Official Gazette.

The Tax was created by Law No. 27,541 of Social Solidarity and Productive Reactivation in the framework of Public Emergency (“Emergency Law“) back in December 2019 and is applicable to Argentine tax residents (at rates of 30% or 8% depending on the transactions) for the following activities: 

  • Acquisition of foreign currency, including travel checks, for saving purposes or without any specific purpose related to the payment of obligations under the terms of the existing FX regulations, made by Argentine residents.
  • Exchange of foreign currency made by Argentine financial entities, in the name of a local party, intended to pay for the acquisition of goods or services rendered abroad, canceled using a credit, purchase or debit card or any other payment method determined by the regulations, including extractions of cash made abroad. Acquisitions made using websites and any other type of operations that imply a remote acquisition of foreign currency are also included.
  • Exchange of foreign currency made by Argentine financial entities intended for the payment, in the name of a local party, of services rendered by nonresident parties, canceled using a credit, purchase or debit card, as well as any other payment method determined by the regulations.
  • Acquisition of services abroad using travel and tourism agencies of Argentina.
  • Acquisition of land, air and water passenger transportation services in which it is necessary to acquire foreign currency for its payment for destinations outside of Argentina.

2. Extension of the Tax at a rate of 30% to new transactions

The Decree extended the application of the Tax at a rate of 30% to the following transactions:

  • The acquisition abroad of personal, cultural and recreational services (not including education), in accordance with the BCRA regulations, or their acquisition in the country when rendered by nonresidents.
  • The import of goods included in the following tariff positions of the “Mercosur Common Nomenclature” (NCM) related to “sumptuous” goods. Click on this link.

3. Subjects liable for the new Collection Regime at a rate of 25%

  • Taxpayers liable for the new Collection Regime at a rate of 25% are individuals or legal entities, undivided estates and other taxpayers, and residents in the country who (i) carry out transactions covered by the Tax mentioned in item 1. b) and c) if the payments exceed the amount of USD 300 per person and per month, (ii) carry out transactions for any amount mentioned in item 1. d) and e), or (iii) import the “sumptuous” goods listed in item 2.
  • The purchase of foreign currency for savings purposes is not affected by the new Collection Regime at a rate of 25%.

4. Collection agents

  • The subjects designated by the Emergency Law, such as financial entities, travel and tourism agencies, and transport companies in Argentina must act as collection agents.
  • If intermediaries intervene in such payments, they must apply the corresponding collection.

5. Characteristics of the collection

  • The collected tax rate will be 25% on the amounts in Argentine currency (ARS) of each operation reached by the Tax.
  • The collection will be computable in the annual tax return of the Personal Assets Tax (PAT) when collected from an individual or undivided estate, or of the Income Tax (IT) when collected from other taxpayers (corporations), corresponding to the fiscal year in which the payments were made.
  • If the collections generate a tax credit, it will be applied for the cancellation of other federal tax obligations, or request its reimbursement.
  • If subjects that are not taxpayers of the IT or PAT paid the collection, they may request the reimbursement of the payments made once the calendar year is concluded.

6. Effective date

The Decree and the Resolution will apply to the operations carried out as of 13 October 2022.

Click here to access the Spanish version.

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Author

Martin Barreiro is experienced in various areas of tax law. He is a member of the Buenos Aires Bar Association, the American Chamber of Commerce in Argentina, the Tax Sub-Committee and the Argentine Association of Taxation Studies. His extensive list of publications include "New Argentine Social Security System" for the International Company and Commercial Law Review and "The S.R.L. in the tax planning of US investors in Argentina" for the Economic and Tax Journal.

Author

Juan Pablo Menna is a partner in the Tax Practice Group in Baker McKenzie, Buenos Aires. He is a member of the Buenos Aires Bar Association and the Argentine Association of Fiscal Studies, and was a professor in Austral University.

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