Obtention of Tax ID for Simplified Corporations

1. Introduction

On April 12, 2017, Law No. 27,349 on Entrepreneurship (the “Law”) was published in the Official Gazette, whose aim was to “encourage entrepreneurial activity in the country and its international expansion, as well as the generation of entrepreneurial capital in the Argentine Republic”, where the Ministry of Entrepreneurs and Small and Medium Sized Enterprises of the Ministry of Production is the enforcement authority.

The Simplified Corporation (“SC”) is a new corporate type with lower complexity and administration costs which also has greater flexibility to regulate internal corporate affairs. The SC stands out for the expeditiousness of the initial registration process, which can be obtained within 24 hours as from the business day following the filing of the relevant documentation, provided that the template approved by the Public Registry of Commerce (“IGJ”) is used.

The SC can be incorporated by digital means and its mandatory book and records should be identified and kept by the IGJ through electronic means. Because of this feature, the SC is regarded as a step towards the modernization and digitalization of the Argentine companies’ legal framework. For further information, please refer to: Law to Encourage Entrepreneurship.

On July 27, 2017, IGJ General Resolution No. 6/2017 was published in the Official Gazette, by which the legal regime applicable to the SC that was created by the Law was regulated. It will come into force on September 1, 2017.

Said General Resolution states that IGJ will act exclusively as a registry as regards the SC, and that the SC is not subject to the IGJ’s scrutiny during operations, dissolution and liquidation. For further information, please refer to: Regulation of Simplified Corporations.

In this context, and on the same day, joint General Resolution No. 4098/2017 (the “Resolution”) was published in the Official Gazette, by which the process to request a Tax ID by SCs is established.

2. Main Aspects

The Resolution states that the Argentine Tax Authority (“AFIP”) will establish an online service by which the registration request forms for SCs will be submitted through the use of the legal representative’s or other authorized person Tax ID (CUIT), Labor Tax ID (CUIL) or Tax ID Code (CDI), and a Tax Code with, at least, Level 2 security.

Said form will contain the company’s and its partners’ information, a Tax Electronic Domicile and the appointment of a tax code administrator (Administrador de Relaciones). The truthfulness of the information submitted will be the taxpayer’s or the tax code administrator’s responsibility.

The AFIP will generate a CUIT for the company and will enable the use of the Tax Electronic Domicile. Said CUIT will be reported to IGJ and IGJ will inform that Tax ID number to the registrant together with the completion of the registration process through the same online service used to request the registration.

The Resolution establishes a template model for incorporation instruments and of publication edicts. If those templates are used, the registration process will not require the presentation of legal opinion and the registration may be obtained: (i) automatically in the specific cases provided for in Section 32, subsection 1 of the Resolution, or (ii) within the term of 24 hours, as of the following business day to the filing of the applicable documentation, when not in the aforementioned cases.

On the contrary, if the template of incorporation instrument is not used, a legal opinion by a notary public or lawyer, as applicable, must be filed. In these cases, the Resolution sets no term by which the registration will be completed.

Finally, all registry offices of all provincial jurisdictions are invited to issue a joint resolution together with the AFIP to set forth the rules to implement a similar procedure to the one mentioned above in matters of registration before Public Registries and of assignment of Tax ID for SCs with legal domicile in said jurisdictions.