The Scope of Stamp Tax is Broadened in some Jurisdictions

The Province of Neuquén’s Law No 2,680 –published in the Official Gazette on December 18, 2009– amended the Provincial Tax Code, which will be applicable as of 2010 Fiscal Year. The amendment broadens the scope of application of the stamp tax to all contracts, regardless of the way they are entered into or executed.

The former Tax Code imposed stamp tax on the acts entered into by correspondence or telegram, as long as:

i)          the offer or proposal was accepted by correspondence or telegram, with the main aspects of the offer fully transcribed; or

ii)          the accepted offer or proposal was executed by the addressee.

Article 219, as amended, provides that all contracts entered into by absentees will be subject to stamp tax. Furthermore, current Article 223 provides that the tax will be imposed on acts performed by correspondence, telegram, or any other means of contracting between absentees, even if the execution of the contract is verified through acts, facts or documents.

This amendment seeks to elude the instrumental principle of the tax set forth in the Federal Tax Co-participation Law, by making taxable any act, even when the requirements for the applicability of the tax set forth in such Law are not met.

This modification confirms the tendency of some provinces that have enacted similar regulations such as Catamarca, Misiones, Santiago del Estero and Tierra del Fuego, opposing the Federal Tax Co-participation Law, and ruling against the Supreme Court’s decisions.