Argentina Fintech Legal News
CIRCULAR
Fintech Department Report | Argentina Fintech Legal News
We at Beccar Varela’s Fintech Department are pleased to announce the launch of our reports, in which you will find legislative news related to the Fintech market in Argentina.
In this first edition, you will find a brief summary of the most relevant regulations that came to light in the first semester of 2019, which evidence that a lot of movement is going on in the local Fintech market.
Digital wallets are levied with turnover tax in the Province of Buenos Aires
Payment agents and processors must act as withholding agents. On July 2019, the tax authority of the Buenos Aires province (ARBA) passed Resolution No. 19, establishing that payment agents and processors acting through platforms, websites, apps or similar electronic payment systems will have to act as retention agents for the turnover tax in the province of Buenos Aires. The sums withheld shall count as payment of the turnover tax owed by the user of the digital wallet. This withholding will be applicable for those registered within ARBA’s turnover tax database, as well as to anyone conducting transactions through payment platforms for an amount over AR$25,000 (Argentine Pesos) in case one of the parties is resident in the province of Buenos Aires.
Digital Signature Infrastructure regulation
Digital signature is as good as certified signature. On March 2019, through Decree 182/2019, the National Government renewed and updated the regulation of the use of digital signatures in Argentina, with the intention to fix the limitations of the former regulations (issued more than 15 years ago) so to try to spread the use of the digital signature infrastructure in both public and private transactions. It also grants the digital signature the same status as the notary certified signature and regulates the so-called “Confidence third-party providers” that will be useful for electronic notes (pagarés, in Spanish).
Basis for calculation of capped interest rates in credit card balances
Higher rates? On April 2019, through Communication A 6664, the Central Bank expanded the basis that non-banking issuers of credit cards shall use for the calculation of the capped interest rates in credit card balances (with effect as from June 2019). Formerly, the cap was established at 25% over the average rate charged by local banks in unsecured personal loans. Now, the basis must also consider the rates charged by non-banking providers of credit, whose rates tend to be higher than those of banks.
FX rate for transactions in credit cards in foreign currency
Closer to market rates. On the same communication cited above, the Central Bank regulated the FX conversion rate that local issuers of credit cards must use for allowing their clients to cancel credit card balances for operations in foreign currency.
Open-market for investing in digital time-deposits
Open Banking for time deposits. On April 2019, through Communication A 6678, the Central Bank allowed clients of banking entities to invest via web in time-deposits of any other local banking entities, with no need to establish a client relationship with the latter. This regulation came to foster more competition among local banks in capturing time-deposits from the public.
Regulation of credit card transactions liquidation term
Merchants will get paid in ten business days. On April 2019, through Communication A 6680, the Central Bank regulated for the first time the maximum term for liquidation to merchants of credit card operations in one installment. This maximum term was established in 10 business days, while the market practice for credit card transactions in one payment has always been around 18 business days.
Incorporation of CVUs to QR standard
Use of Virtual Accounts to pay with QR is now possible. On April 2019, through Communication A 6668, the Central Bank updated the regulation that standardized the quick response (QR) code, establishing that it should allow the incorporation of the Uniform Virtual Code (CVU), created by the Central Bank on May 2018 to identify virtual accounts, in order to allow payments with QR utilizing virtual accounts.
Precisions on the “Uniform Virtual Code” (CVU) regulation
CVU is not only for financial users. On May 2019, by means of the Communication A 6697, the Central Bank incorporated new functions to the CVU and non-consumers of financial services can now also have CVUs. In addition, it obliges financial institutions to process transfers through mobile devices involving CVUs in the same conditions (and without further requirements or using different graphic interphases) than ordinary bank transfers between bank accounts.
New Law for IT activities promotion
Can Fintech take advantage of these tax benefits? On May 2019, the National Congress enacted the new Law 27,506 of Promotion of the Economy of Knowledge, which updated and replaced the former law for the promotion of software production activities. This new regime, which shall be in force from January 1, 2020 to December 31, 2029, establishes significant tax benefits for IT activities and to IT products and services developed in Argentina. The Decree that regulates the details for the actual implementation of the Law it´s still pending but it is expected to have a broader scope than the previous regime.
Electronic Checks regulation
No presence is needed to issue, endorse, receive or cash a check. On June 2019, the Central Bank regulated the functionalities for the issuance, negotiation, transferability, and liquidation of electronic checks (E-CHECKS) against local current bank accounts established under Central Bank Communication A 6578. E-checks shall be signed electronically (no digital signature needed), will reduce errors and mistakes in the issuances and will grant security for the parties (more difficult to commit fraud), among other benefits.
Do not hesitate to contact us should you require any further information on these matters.
Sincerely,
Daniel Levi
María Shakespear
Pablo J. Torretta
Ivana Grossi
This report contains a summary of regulations published in Argentina. The summary as such is not complete and does not imply advice of any kind. Do not hesitate to contact us shall you require assistance on these matters.