Scope of the limitations to payments in excess of Argentine Pesos 1,000

On August 12, 2003 General Resolution No 1547/03, issued by the AFIP (Argentine tax authority), was published in the Official Gazette. Among other things, this regulation abrogated General Resolution No 151/98, that had been issued in 1998 by such authority. The abrogated regulation established that payments in excess of Argentine Pesos 10,000 had to be made through nominative checks, deferral payment checks, automatic debit or credit cards, purchase or debit cards, banking compensation, etc. Otherwise no deductions, tax credits and other tax effects contemplated by the legislation would be allowed.

But some years later, with the enactment of the Prevention of Tax Evasion Law No 25,345 (Official Gazette 11/17/2000), certain contradictions had arisen. This established that payments in excess of Argentine Pesos 1,000 had to be made by any of the means mentioned therein (deposits in financial entities’ accounts, banking drafts or transfers, checks or cancellation checks, credit cards, purchase or debit cards, etc.). Otherwise the payments would not be effective among the parties and vis-à-vis third parties, and, in addition, tax consequences similar to those provided by General Resolution No 151/98 were provided. But General Resolution No 151/98 was never coordinated with the provisions of the Prevention of Tax Evasion Law.

General Resolution No 1547/03, which abrogated General Resolution No 151/98, makes the referred coordination, eliminating the inconsistencies mentioned above. Therefore at present, payments for amounts in excess of Argentine Pesos 1,000 must be made by one of the means detailed in the Prevention of Tax Evasion Law. Otherwise, they will not be effective among the parties and vis-à-vis third parties, and no deductions, tax credits and other tax effects contemplated by the legislation will be allowed.