New regularization regime for the cancellation of tax and social security obligations

On December 15, 2009, the Argentine Tax Authority (“AFIP”) issued General Resolution No 2,727 (the “Resolution”) by which it established a regularization regime of tax, customs and social security obligations due between January 1, 2008 and October 31, 2009.

The obligations that are included in this new regularization regime include:

(i)   debts included in the regularization regime set forth by General Resolution No. 1,966 that are rejected or matured;

(ii)  tax withholdings or perceptions either carried out or not;

(iii) tax obligations, interest and fines which are being administratively or judicially contested; and

(iv)  the interest corresponding to the prepayments and/or payments on accounts that matured between January 1, 2008 and October 31, 2009.

Likewise, those taxpayers that have entered into other regularization regimes in force may enter into this new regularization regime provided that the regime established by the Resolution is more advantageous than the one that they are following if those debts are for the mentioned period.

Those obligations corresponding to taxpayers that are being criminally prosecuted for crimes established by Laws 22,415, 23,771 and 14,769 or for other crimes that are related to the non-fulfillment of tax, customs or social security obligations may not be entered into this regularization regime provided that the order of the trial initiation has been issued.

Unlike the regularization regime set forth in Law No 26,476 as regulated by General Resolution AFIP No 2,537, the cancellation of debts included in the regime set forth in the Resolution does not grant a reduction in the interest or the extinction of any sanction that may be applicable.

The regularization regime may be entered in 22, 23 or 24 installments, depending on the moment in which the taxpayer enters into the regime. The maximum of 24 installments is applicable if the taxpayer enters into the regime during the month of December, 2009. If the taxpayer enters into the regime during the months of January and February, 2010, 23 and 22 installments will be, respectively, available. The applicable interest is 0.8% monthly. The taxpayers may enter into the regularization regime through the Internet between December 17, 2009 and February 28, 2010.