Interest Rate Hike Applicable on Unpaid Fiscal Obligations

From March 1 until March 31, 2019, the compensatory interest rate rises to a monthly rate of 4.5% from the current 3% rate. The punitive interest rate (those that start to accrue after judicial collection proceedings have been started) rise to a monthly rate of 5.6%  from the current 4% rate.

Beginning on April 1, 2019, automatic adjustments to these rates are to take place quarterly and the Argentine Federal Tax Authority  (the “AFIP” after its Spanish acronym) will publish the applicable rates in each trimester. These quarterly rates will be fixed by using a formula that will be based on the annual nominal interest rate payable by the Banco de la Nación Argentina (BNA) upon certain kind of fixed term deposits (180-day term deposits), plus a 20% increase for the compensatory interest rate and a 50% increase for the punitive interest rate.

The reference interest rate will be that offered by the BNA on day 20 of the month prior to the start of the trimester; therefore, the rates for the second quarter will be fixed on those offered by the BNA to its depositors on March 20, 2019.

The aforementioned resolution lacks legal status due to the fact that the Argentine Treasury intends that these rates are also accrued on unpaid amounts of customs duties which are set in US dollars (according to Section 20, Law No 23,905).

It is -clear that the Customs Code authorizes the Treasury to fix the compensatory interest rate only up to two times the discount rate for commercial documents offered by the BNA (according to Section 794, Customs Code), so the reference rate must be the discount rate for commercial documents in US dollars offered by the BNA.

This action taken by the Treasury also lacks legal status as it keeps the monthly 0.5% the interest rate (6% annual) that the AFIP owes taxpayers claiming reimbursements on taxes or duties already paid.