Procedure for the Use of Seized Funds for Payment of Fiscal Obligations

The Argentine Tax Authority (AFIP) General Resolution No. 4,262/18 provides for the mechanism to use seized funds within the framework of a judicial execution procedure for the payment of tax or social security debts. This mechanism was incorporated in article 92 of the Tax Procedure Law No. 11,683 through Tax Reform Law No. 27,240 (article 216).

 

1.         Modification of article 92 of Tax Procedure Law No. 11,683

Article 216 of Law No. 27,240 replaced paragraph 11 of article 92 of Law No. 11,683. The article was drafted as follows: “[t]he taxpayer or liable party (“responsable”) may offer in payment directly to the AFIP, according to the procedure that AFIP will establish, the seized sums in order to cancel, total or partially, the executed debt …”

AFIP’s General Resolution No. 4,262 provides for the procedure for the offer of seized sums as payment of the tax and/or social security executed debts.
 

2.         General Resolution No. 4,262

General Resolution No. 4,262 provides two alternatives for the offer of seized sums as payment. The offer can be made through the Tax Accounts System; or with the intervention of the Treasury’s Representative. The mechanism cannot be used if the seizure has been locked in foreign currencies, public securities, shares and other securities, fixed term deposits pending maturity, or I safe deposit boxes.
 

2.1       Procedure through the Tax Accounts System

This procedure is applicable for registered obligations in the Tax Accounts System. In this case, the system will issue a provisional tax settlement of the amounts that are able to be cancelled, according to the debts included in the claim, together with its accessories and fees. It will also issue a proposal to include the debts in the seized funds.

If the taxpayer agrees to the provisional tax settlement, the system will issue an Electronic Payment Receipt (VEP) based on each account/bank and the debts to be canceled. Once the VEPs have been issued, the banks will proceed to cancel them and will lift the precautionary measures, provided that an equivalent amount to the total amount of the seizure order has been paid.

If there is a remnant of unpaid debt, the taxpayer or liable party must cancel it in cash or through an installment plan.

The Treasury’s Representative will control the total cancellation of the debt claimed in the tax execution procedure. To that extent, said Representative is authorized to carry out a re-settlement of the amounts claimed and communicate it to the taxpayer.

This procedure can only be used once for each tax execution procedure. Also, once the offer in payment of the seized funds has been made, it cannot be modified or waived by the taxpayer or liable party.
 

2.2       Procedure with the Intervention of the Treasury’s Representative

This procedure is applicable in the case of obligations that are not registered in the Tax Accounts System; in case an offer of seized funds as payment has already been made; or in the event that the taxpayer and/or liable party does not comply with the provisional tax settlement issued by the system.

In this case, a written request must be filed to the Agency where the taxpayer and/or the liable party is registered into. Once the request has been received, the Treasury’s Representative will issue a preliminary tax settlement of the debt and legal fees. Once the preliminary tax settlement has been issued, the taxpayer and/or liable party must accept it. Once accepted, the respective VEPs will be issued and the cancellation will be ordered to the banks.

If the payment made with seized funds is equivalent to the amount of the seizure, the precautionary measures will be lifted immediately. Regardless of whether there is a remnant of unpaid debt. There are no limitations as to the number of times this procedure can be used.