Amendments in the regulations regarding repatriation of funds located in foreign countries by Argentine residents

During the year 2005 the General Resolution AFIP No 1926 (“Resolution 1926”) determined a mandatory report regime with respect to the repatriation of funds located in foreign countries.

Within Section 1 of the aforementioned resolution, it was determined that such mandatory reporting regime shall be followed by individuals and entities, estates or other residents, such as:

(a)    Individuals or entities with intermediation in financial entities;

(b)    Individuals or entities that directly repatriate funds from foreign countries;

(c)    Holders of funds when they act through a third party (e.g. other entity or individual) who is not considered as resident, that directly or through financial entities repatriates funds.

It is important to remark that Resolution 1926 determined that entities that must follow the mandatory report regime shall do so whenever the repatriation of funds is above US$ 50,000 (fifty thousand dollars) (i) by month; and (ii) by individual or entity.

In addition, Section 3 of Resolution 1926 also determined that they shall be considered as residents —among others— Argentine individuals, by nature or by option, and individuals with foreign citizenship who opt to acquire permanent Argentine residency.

With the purpose of facilitating the tax obligations reporting compliance of such operations, General Resolution AFIP No 2471 (“Resolution 2471”) amended the aforementioned concepts stating that for the purposes of the mandatory report regime the following are considered as residents:

(a) individuals with Argentine citizenship, whether native or by option, with the exception of individuals that acquire the condition of permanent residents in a foreign country, or who are based in a foreign country during a period of 12 (twelve) months.

In the case of Resolution 2471 the presence in the country refers to a period not exceeding a total of 90 (ninety) days, within a 12 (twelve) month period that not interrupting residence abroad.

(b) Individuals with foreign citizenship who have obtained permanent residency in the country or are based in the country with temporary authorization, within a period of 12 (twelve) months, without taking into account the absences that do not exceed a total of 90 (ninety) days within such period of 12 (twelve) months.

(c) Estates where the decedent, at the date of decease, complies with the conditions mentioned in sections a) and b) above.

Resolution 2471 does not amend the individuals that are included in section 69 (a) of the Revenue Income Law; other entities, companies, exploitations, entities and permanent establishments, constituted or located in the country; trusts regulated by Law No 24.441 and common investment funds included in Law No 24.083.

Finally, the resident must report to the authorities as soon as he/she has ordered or carried out the repatriation of said funds.