Argentina: Tax on Foreign Currency Acquisition – Extended to New Transactions and Introduction of a New 25% Collection Regime

In short

  • On October 13, 2022, Decree No. 682/2022 (“Decree“) and Resolution No. 5272/2022 (“Resolution“) have been published in the Official Journal. With regard to certain transactions covered by the tax on the acquisition of foreign currency (“Tax“), the Federal Tax Authority (FCA) has added a new recovery regime at a rate of 25% to the acquisition of foreign currency for certain payments through resolution.
  • By means of the decree, payments for (i) the acquisition abroad of personal, cultural and recreational services (excluding education), in accordance with the regulations of the Central Bank of Argentina (BCRA), and (ii) the importation of goods listed as “sumptuous” are also levied by the Tax at the rate of 30%.
  • The decree and the resolution will apply to transactions carried out as of October 13, 2022.

On point

1. General Considerations

On October 13, 2022, the decree and the resolution were published in the Official Journal.

The tax was created by Law No. 27,541 of social solidarity and productive reactivation in the context of public emergency (“emergency law“) in December 2019 and is applicable to Argentine tax residents (at the rates of 30% or 8% depending on the transaction) for the following activities:

  • Acquisition of foreign currency, including traveler’s checks, for savings purposes or without a specific purpose related to the payment of obligations under the terms of the exchange regulations in force, made by Argentine residents.
  • Foreign currency exchange carried out by Argentine financial entities, on behalf of a local party, intended to pay for the acquisition of goods or services rendered abroad, canceled by means of a credit card, purchase or debit or any other method of payment determined by the regulations, including cash withdrawals made abroad. Also included are acquisitions made using websites and any other type of operation involving remote acquisition of foreign currencies.
  • Foreign currency exchange carried out by Argentine financial entities intended for the payment, on behalf of a local party, of services rendered by non-resident parties, canceled using a credit, purchase or debit card, as well as any other method of payment determined by the regulations.
  • Acquisition of services abroad through Argentine travel and tourism agencies.
  • Acquisition of land, air and maritime passenger transport services in which it is necessary to acquire foreign currency for its payment to destinations outside Argentina.

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

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

  • The acquisition abroad of personal, cultural and recreational services (excluding education), in accordance with BCRA regulations, or their acquisition in the country when rendered by non-residents.
  • The import of goods included in the following tariff headings of the “Common Nomenclature of Mercosur” (NCM) relating to “lavish” goods. Click on this link.

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

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

4. Collection agents

  • Subjects designated by emergency law, such as financial entities, travel and tourism agencies and transport companies in Argentina must act as collection agents.
  • If intermediaries are involved in these payments, they must apply the corresponding levy.

5. Characteristics of the collection

  • The rate of tax collected will be 25% on the amounts in Argentinian currency (ARS) of each operation affected by the tax.
  • The collection will be chargeable in the annual declaration of the Tax on the Heritage of Physical Persons (PAT) when it is collected from an individual or joint estate, or of the Income Tax (IR) when it is collected other taxpayers (companies), corresponding to the fiscal year in which the payments were made.
  • If the recoveries generate a tax credit, the credit will be applied towards the cancellation of other federal tax obligations, or will seek its refund.
  • If subjects who are not IT or PAT taxpayers have paid the collection, they can request reimbursement of the payments made once the calendar year has ended.

6. Effective Date

The decree and the resolution will apply to transactions carried out as of October 13, 2022.

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