New interpretation of the scope of application of the Tax on Credits and Debits in foreign bank accounts

In Ruling N° 19/2007[1], the Federal Tax Authority (“AFIP”) analyzed a binding ruling request made by a local taxpayer regarding the application of the tax on credits and debits in bank accounts on transfers of funds between foreign bank accounts originated in (i) deposits to fund a capital increase made by the majority shareholder, and (ii) the subsequent debit to pay a loan granted abroad.

First, the AFIP analyzed if the foreign bank transactions constituted an “organized system of payment” (sistema organizado de pago) created to replace the use of bank accounts in financial entities and therefore subject to the tax. The AFIP concluded that the capital increase and the payment of the loan were not activities performed on regular basis by the taxpayer; therefore, it could not be interpreted that it had developed an “organized system of payment” to replace the use of bank accounts.

Afterwards, the AFIP sustained that the tax did not apply because the transactions involved bank accounts located outside Argentina.

The ruling is important because it helps to define the meaning of “organized system of payment” (sistema organizado de pago) and the territorial applicability of the tax.