New Applicable Regime for the Acquisition of Tourism and Transport Services Paid for in Cash

On December 17, 2015 the Federal Tax Authority’s General Resolution No. 3819 was published in the Official Gazette, which establishes a new collecting regime applicable only to transactions related to travel and tourism services that are cancelled by cash payment.

General Resolution No. 3819, enforceable from the date of its publication in the Official Gazette, establishes a new collecting regime applicable to:

1. operations of service acquisitions abroad through travel and tourism agencies in the country, which are cancelled by cash; and
2. operations of service acquisitions of land, air and water transportation of passengers to travel abroad, which are cancelled by cash.

According to the tax status of the liable subject, such collections may be considered account payments of personal assets tax for those individuals who are under the simplified regime for small taxpayers and are not liable for Income Tax, and for the rest of individuals, account payments of Income Tax. If the collection is applied to individuals who are not subject to Income Tax or Personal Assets Tax, they may request the reimbursement of the amounts collected according to the provisions of General Resolution No. 3420.

Travel and tourism agents for operations described in i) should act as withholding agents, as should providers of land, air or water transportation for operations described in ii).

Collection must be made at the moment of the service’s payment, even if it is paid in part or in installments, in which case the total amount of the collection must be fully collected at the first payment.

The amount to be collected will be determined by applying a rate of 5% to the total amount of each transaction. If the operation is expressed in a foreign currency, it will be converted to the equivalent in local currency at the selling rate settled by the Banco Nación de Argentina at the close of the last business day immediately preceding the operation’s date.

Last but not least, General Resolutions No. 3450 and No. 3583 were annulled. The former had established a collection regime applicable to: (i) acquisitions of goods, services and /or cash advances made abroad by Argentine residents which are cancelled by credit cards, debit cards and /or purchase cards (also including online purchases expressed in foreign currency), at a rate of 35%; and (ii) acquisitions of services to travel abroad through travel and tourism agencies located in the country; acquisitions of land, air and water transportation to travel abroad; and purchase of foreign currency for travel and tourism expenditures with a rate of 35%. General Resolution No. 3583 had established a collection regime applicable to acquisitions of foreign currency made by individuals for possession of foreign currency in the country, at a rate of 20%.