Broad Tax Moratorium Approved in the City of Buenos Aires

1) The Regime for the Regularization of Tax Obligations

Law No. 6195 (the “Law”) approved a Regime for the Payment of Tax Obligations (the “Regime") that would allow taxpayers and/or those responsible for taxes whose application, perception and/or inspection is responsibility of the Government Administration of Public Revenue (the “AGIP") to regularize obligations due on or before July 31, 2019, or infringements committed on that date.

The following are the main aspects of the Regime:

• Term and modality of the acceptance

The term to adhere to the Regime will be determined by the AGIP in its regulations, which may not exceed December 31, 2019.

Taxpayers and/or those responsible will have the option to adhere to the Regime in whole or in part except in the case of debt in judicial management in which case the application must be for the total of the debt claimed in trial.

In addition, it is important to consider that adherence to the Regime also implies acceptance by the taxpayer and/or those responsible for the interruption of the limitation period of the actions and powers of the Treasury to assess and demand the payment of liens for the regularized periods, regardless of their cancellation form.

 

• Exclusions

The following are excluded from the Regime: a) Those declared bankrupt; b) Those sentenced for any of the crimes foreseen in the Criminal Tax law Regime; c) Those sentenced for common crimes against the Central Administration and/or Decentralized Agencies and/or Autarchic Entities of the Government of the City of Buenos Aires; d) The expiration of the regime established by Law; and e) The plans in effect as of July 31, 2019 of Law No. 5616.

• Debt regularization in judicial instance

Debts in judicial management can be included in the Regime in f the taxpayer or responsible party applies for the plan and rejects  the right and legal actions initiated by them against the Government of the City of Buenos Aires.

The payment of the debts in judicial instance will imply the acquiescence in the claim of the tax authority including the total of the debt claimed.

The application to the payment plan means the suspension of court deadlines of ongoing legal cases. In the event of its expiry or nullity, the procedural deadlines will be resumed, taking into account what was paid on account of the final settlement.

Against acceptance of the Regime, precautionary measures will be lifted on funds or securities deposited in financial institutions or on accounts receivable.

The acceptance to the Regime implies the obligation to pay the court costs, expenses and fees of the mandataries.

• Effects of the acceptance. Criminal Tax Law Regime.

The acceptance of the Regime will produce the suspension of the criminal charges in progress and the suspension of the statute of limitation, even if these charges had not been carried out at that moment or whatever the stage of the process in which the cause is, as long as the same one does not have final judgement and/or agreement of homologated compromise.

The total payment of the debt under the conditions provided for in the Regime - in cash or by means of a payment plan - will result in the extinction of the criminal action.

The expiration of the payment plan will imply the resumption of the criminal action or will enable the promotion by the AGIP of the corresponding criminal complaint, in those cases in which the acceptance has been given prior to the filing. Likewise, it implies that the deadlines of the statute of limitation of the criminal action will restart.

• Debt and interest remission

Article 12 of the Law determines the total remission of compensatory and penalty interests of the regularized tax obligations for those taxpayers and/or responsible who adhere to the Regime, with the exception of the withholding agents for the retained and/or received and not deposited taxes.

On the other hand, article 13 of the Law establishes different circumstances in which the remission of fines for substantive and/or formal breaches committed up to July 31, 2019, which have not been paid and do not have a final judgement on the date of the implementation of the Law, will proceed.

 

In general terms, regarding the fines for substantive breaches, the remission includes:

a) Surcharges, fines and other sanctions corresponding to substantial obligations accrued as of July 31, 2019, provided that the principal obligation is paid in cash, by means of the Regime or by any of the payment plans in force.

b) Surcharges, fines and other penalties for substantial obligations accrued as at 31 July 2019 provided that the principal obligation had been cancelled by that date.

c) The withholding agents that adhere to the Regime are released from surcharges, fines and any other sanction provided that they cancel or have cancelled the amount that, having been retained or received, has not been paid in due time.

d) In the case of fines that do not have a final judgment and that have been cancelled  through payment plans that are in force, the forgiveness operates on the unpaid dues.

In all cases, if there is a judicial claim for the fines remitted, the beneficiary must pay the court costs, expenses and fees for the ongoing lawsuit.

Fines remitted are not considered in the Record of Recidivism of Tax Infractions.

 

• Regimes of debt Regularization according to the type of contributor:

a) Special regime for taxpayers not included in Resolution No. 161/AGIP/2019 and its supplements

For taxpayers and/or responsible parties not included in the current Verification System for Large Taxpayers, the expiration of the first due of the payment plan will operate as from the ninety (90) calendar days following its subscription.

The debts regularized according to the Regime, may be cancelled: a) In a single payment or; b) in several dues, under a payment plan provided by AGIP in this regard, where the regularized debts may be cancelled up to one hundred and twenty (120) dues, with financing interest ranging from 1% to 1.5% monthly, depending on the dues.

b) Subjects covered by the Verification System for Large Taxpayers

Taxpayers and/or responsible included in the current Verification System for Large Taxpayers may regularize their tax obligations in the following way: a) In a single payment or; b) in several dues, under a payment plan provided by the AGIP, which may cancel the debts regularized in up to sixty (60) dues, with financing interest ranging from 1% to 1. 25% per month, depending on these dues; or c) paying an advance of 10% (ten percent) of the tax to be regularized and the remaining balance in up to ninety (90) dues, as provided by the AGIP, with financing interest ranging from 1% to 1.5% monthly, depending on the dues.

c) Withholding Agents for taxes withheld and/or collected but not deposited

The Withholding agents for withholdings and/or perceptions made and not paid as of July 31, 2019, may cancel the regularized debts in up to thirty-six (36) dues, with financing interest ranging from 2% to 3% per month, depending on the dues.

 

• Debts are under assessment by the Argentine Tax Authority

An additional benefit is granted for those taxpayers and/or responsible parties who are under verification or assessment by the Argentine Tax Authority and pay in a single payment the total amount claimed. These taxpayers and/or responsible parties may continue with the discussion in administrative instance, in accordance with the rules of the AGIP.

 

2) Tax remission and exemption in special cases

a) Liens for Use, Occupation and Work in Public Space (Surface, Subsoil and Air Space) and Supply

On the other hand, the Law condone taxpayers and/or responsible who are not included on the actual Verification System for Large Taxpayers of Turnover tax regulated by Resolution Nº 161/AGIP/2019, the tax obligations and their accessories, accrued until July 31, 2019, for the charges that affect Supply and charges for occupation and/or public road use of  Carrousels, flowers selling Kiosks, metallic boxes denominated containers, tables and chairs, awning and/or sun visors for commercial use and platforms for recreation; provided that they have not been paid nor have been subject of tax ejection judgment in the event that been transferred for recovery by judicial means. 

Ift the tax obligations described at the preceding paragraph have been included at the

Payment plans whose status is current, the remission includes non-paid dues.

 

b) Stamp Tax

With respect to Stamp Tax, the Law extends the benefits established in  Law Nº 6.169, until December 31, 2019  which exempts the purchase and sale operations of certain brand new or unused cars from Stamp Tax.