Amendments to the Argentine Fiscal Consensus

1.         Stamp Tax

Item f) of the bill (the “Bill”) postpones the timeline established in item III.k of the Fiscal Consensus enacted by Law No. 27,429 (the “Fiscal Consensus”) in the event that the jurisdictions pass the agreement included in the Bill (named Fiscal Consensus 2018) for one calendar year.

Item III.k of the Fiscal Consensus sets a progressive tax rate reduction regarding Stamp Tax for activities and contracts, excluding the assignment of real estate and automotive and hydrocarbon activities and their complementary services. Based on this scenario, the maximum Stamp Tax rates would be 0.75% as of January 1, 2019, 0.5% as of January 1, 2020, and 0.25% as of January 1, 2021. Stamp Tax would be eliminated as of January 1, 2022.

If the Bill is approved and ratified by local legislatures, the abovementioned timeline would begin on January 1, 2020 and Stamp Tax would be abrogated as of January 1, 2023.

2.         Personal Assets Tax

Item e) of the Bill provides for the item II.q of the Fiscal Consensus suspension. This item contemplates the commitment assumed by the Argentine Government not to levy new national capital taxes or to increase the tax rate of Personal Assets Tax.

The Bill´s approval enables the Argentine Government to raise Personal Assets Tax. The amendment is connected with the exemptions’ amendment and tax rates of Personal Assets Tax bills which reached congressional status recently.

3.         Income Tax

Items a) and b) of the Bill are related to Income Tax. The first one determines the commitment to repeal any provision as of 2019 fiscal year (excluding Income Tax or any national legislation), that includes:

• a total or partial exemption or deduction of Income Tax taxable matter, of the amount earned by employees or national, provincial or municipal public officials for representation expenses, travel expenses, mobility, special bonus, protocol, professional risk, technical ratio, special or functional dedication, hierarchical responsibility, uprooting and any other compensation of a similar nature, whatever the denomination used; or
• any special provision that construes as mobility expenses, travel expenses or any similar compensations paid to employees or national, provincial or municipal public officials of the Executive Branch that are different from the definitions described in national labor legislation and Income Tax Law.

Item b) sets forth the Argentine Government’s commitment to repeal any provision that establishes an Income Tax exemption of the results from savings, credit and/or financial activities or insurance and/or reinsurance activities of cooperative and legal entities as of the fiscal year 2019. The commitment is linked to the amendment of Income Tax Law suggested by section 85 of the Budget Bill currently being analyzed by the Congress.