Under the so called “Ley Blanqueo de Capitales” the Tax Amnesty Regime entered into force on 25 July 2016. Assets that have existed prior to 22 July 2016 may now be disclosed. This includes funds in local and foreign currency and in particular real estate, shares, ownership interests in companies, ADRs, units, and the like as well as other assets in the country and abroad.
Depending on the type of assets there has to be distinguished between the following disclosure methods:
- Funds or securities held abroad: by reporting their deposit with financial institutions. Disclosing individuals/entities will not be under the obligation to bring their funds/securities into the country.
- Funds in local or foreign currency in the country: by making a deposit prior to 31 October 2016.
- Other real and personal property located in the country or abroad: filing of a return including a detail of such property.
Funds in local or foreign currency in cash deposited with Argentine banks must remain deposited for a term of no less than 6 months or until 31 March 2017.
Tax rates and benefits
When disclosing the assets the following special tax rates apply, replacing the ordinary tax rates*:
- Assets, including real estate, whose value, as a whole, is lower than ARS 305,000: 0%.
- Assets, including real estate, whose value ranges from ARS 305,000 and ARS 800,000: 5%
- Assets, including real estate, whose value exceeds ARS 800,000:
- Disclosed prior to 31 December 31 2016: 10%
- Disclosed between 1 January 2017 and 31 March, 2017 paid with Argentine BONAR y GLOBAL 2017: 10%
- Disclosed between 1 January 2017 and 31 March, 2017: 15%
*Before, on real estate the special tax rate of 5% has always been applied.
The special tax will not be applied when the funds disclosed are used for the acquisition of any of the following securities:
- IPO Argentinian Government Bond in U.S. dollars with a maturity of 3 years (it must be acquired prior to 30 September 2016).
- IPO Argentinian Government Bond in U.S. dollars with a maturity of 6 years (it must be acquired prior to 31 December 2016).
- The subscription or acquisition of units in mutual funds, whose purpose is the investment in instruments aimed at financing projects related to infrastructure, productive investments, real estate, renewable energies, SMEs, mortgage loans. Investments shall be maintained for a minimum term of 5 years.
Individuals adhering to this temporary regime will benefit from the following:
- Unpaid taxes are not required to be paid.
- They will not be subject to any adjustment for unjustified equity increases.
- They will not be subject to any action for violations to the tax criminal law, the exchange criminal law, the customs law, or administrative infringements.
The benefits do not include money laundering actions.
Exceptional regularization of tax, social security and customs liabilities – INSTALLMENT PLAN AND BENEFITS
The plan covers all taxpayers and individuals and entities responsible for tax, social security and customs liabilities with some specific exclusions such as individuals who are prosecuted for tax criminal actions.
The plan covers all taxes with tax liabilities overdue as of 31 May 2016 -inclusive – or breaches related to such liabilities, excluding withholdings and contributions to the health insurance plan, workers’ compensation insurance (ART), and installments to be paid as part of the regime for the regularization of tax liabilities.
The Benefits of adhering to the plan are forgiveness of applicable (tax, social security and customs) fines and penalties and forgiveness of part of the compensatory and punitive interest on the outstanding principal covered by the plan, according to the amount of principal that the interest accounts for.
The plan provides the different payment methods, which are:
- Spot payment: in this case, there is a reduction of 15% of the debt.
- Full payment through the installment plan, subject to the following conditions:
- Payment on account equivalent to 5% of the debt.
- Remaining balance: up to 60 monthly installments, at a financing rate of 1.5% per month.
Benefits applicable to complying taxpayers
Taxpayers who have complied with their tax liabilities for the fiscal periods 2014 and 2015, and meet the following requirements may benefit as following from participating in the program:
- During the 2 fiscal periods immediately prior to fiscal period 2016, they have not adhered to the voluntary disclosure regime, or to the tax liabilities regularization regime set forth by Law 26860, or the specific payment plans granted by the Tax Authorities.
- They do not have any debts to be foreclosed by the Tax Authorities, they have not been subject to a tax foreclosure or convicted, by a final conviction, for tax fraud, during the two fiscal periods immediately prior to fiscal period 2016.
- Wealth tax exemption for fiscal periods 2016, 2017, and 2018 – inclusive. Substitute taxpayers are covered by this benefit.
Changes in Wealth Tax
In addition, changes to the wealth tax have been included to the law.
- 2016: 1%
- 2017: 0.5%
- Since 2018 and forward: 0.25%
Non Taxable Minimum:
- 2016: 800.000 AR$
- 2017: 950.000 AR$
- Since 2018: 1.050.000 AR$
Taxpayers may adhere to the regime until 31 March 2017. However, we advise to seek professional advice from tax advisors with wide experience in wealth management vehicles in advance to be able to plan the process.
On 16 November 2016, Switzerland signed a joint declaration with Argentina on the introduction of the Automatic Exchange of Information. The two countries intend to collect the data according to the global AEoI standard from 2018 and to exchange it from 2019 onwards.
Read more on how KPMG tackles the challenges filing voluntary disclosures such as under the Argentinian Tax Amnesty under www.kpmg.ch/voluntarydisclosures.