A Bill Regarding an Easy Payment Plan and Tax Amnesty Was Recently Released

Introduction

In these last few days, a bill regarding a new easy payment plan (“Moratorium”) and a tax amnesty (“Tax Amnesty”) was released. By means of the Tax Amnesty, this bill grants the possibility of paying a special tax with reduced applicable rates depending on the purpose of the assets and funds of the investment. If the assets and funds are transferred to Argentina, the rates are also reduced. Furthermore, the bill sets forth some benefits for those taxpayers that comply with their regular tax reporting obligations before the Tax Authority.

Moratorium

It includes overdue tax obligations and social security contributions as of December 31, 2015, including those undergoing administrative or judicial proceedings before the courts.

The bill also includes obligations as of December 31, 2015 included in overdue easy payment plans, and easy payment plans currently in force may also be changed to fit this new plan.

The benefits of this Moratorium will be the exemption and/or pardon of fines not subject to final judicial decision and compensatory or punitive interest exceeding 100% of the overdue principal.

In criminal cases, the request for Moratorium, as long as no final judicial decision has been passed, will suspend the criminal procedure and also interrupt the statute of limitations. In addition, compliance with this regime will annul any current criminal action. Failure to comply, either in full or in part, with the Moratorium will cause both the criminal action and the statute of limitations to be resumed.

In order to be eligible and included in the Moratorium, a payment of 5% in account for the payment of the debt must be made upon request thereof, while the balance may be settled in up to 60 monthly installments with a monthly interest of 1.5%.

Regarding those taxpayers who have requested to be included in the Moratorium, (i) the statute of limitations as to the investigation and imposition of fines and (ii) the expiration of the judicial action within the framework of fiscal execution trials or regular trials will be suspended for one year.

Tax Amnesty

a) General Aspects

All taxpayers eligible for the Moratorium may also be eligible for the Tax amnesty, provided they have been registered with the Tax Authority for at least 2 years.

The Tax Amnesty’s purpose is to provide for the possibility of disclosing funds held abroad and within the country, funds held in local currency within the country and also assets located in Argentina or abroad.

The Tax Amnesty shall be effective until December 31, 2017, in accordance with Argentina’s ratification of the “OECD standard for automatic exchange of tax information” promoted by the Organization for Economic Cooperation and Development (OECD) and the G20.

The regime will be applicable to fiscal periods finished as of the entry into force of the law and also the exceptional fiscal period occurred between the last fiscal period and the date when the law enters into force.

b) Special Tax

A special tax in pesos is imposed over the disclosed funds or assets, whose rate will vary depending on the moment of the request and the destination given to such assets and funds. The applicable rates range between 3% and 8% for 2016 and 3.5 and 10% for 2017.

For instance, for assets and foreign funds not transferred to Argentina, the applicable rate will be 8% to 10% respectively for 2016 and 2017. However, for assets and funds held in Argentina, or transferred to the country (with an obligation to keep such property in Argentina for 5 years), the applicable rates range between 5% and 6.5% depending on whether the disclosure is made in 2016 or 2017.

The Exchange rate will be that provided by the Official Bank and effective at the time of the request. Taxpayers may apply for partial disclosures throughout the duration of the Tax Amnesty. Those included in the Tax amnesty will be released from any criminal, civil or commercial claim.

Benefits for good taxpayers

Taxpayers that invest in the country, particularly in such areas promoted by the Tax Amnesty, using assets or funds duly reported in their tax returns will be able to request certain benefits.

According to the purpose of the investment, the bill provides for a fiscal credit ranging from between 3% and 5% of the invested amount and a partial exemption from income tax of 10%. Those taxpayers who have requested to be included in the Tax Amnesty will not be able to apply for these benefits.