Decree No. 72/2023 — Cancellation of tax obligations with BOPREAL.
Banking & Financial Institutions Department Report | Decree No. 72/2023 — Cancellation of tax obligations with BOPREAL
On December 21st, 2023, the National Executive Branch (“PEN”, for its acronym in Spanish) issued Decree No. 72/2023 (the “Decree”), which establishes the possibility of canceling positive and customs obligations, under the established conditions and deadlines.
Background
On December 13th, 2023, the Central Bank of the Argentine Republic (“BCRA”, for its acronym in Spanish) published Communication “A” 7918, through which the conditions and terms of subscription to a new instrument called “Bonds for the Reconstruction of a Free Argentina” are established ( “BOPREAL”). To pay a commercial debt for imports of goods with customs entry registration or doubt for services provided on or before December 12th, 2023, today there is no possibility of accessing the exchange market without a BCRA prior authorization (with very few exceptions), so it is a “debt stock” with few options to make its payment (the “Debt Stock”) (see our report). In this scenario, we understand that one of the reasons for issuing BOPREAL may be to provide a coverage mechanism for importers with Debt Stock.
Tax benefit
In this scenario, as a way to add value to BOPREAL futures, PEN issued the Decree. In summary, the Decree establishes that “the bonds or securities issued by the BCRA in the exercise of the powers established by section i) of article 18 of the Organic Charter” in favor of importers with Debt Stock (e.g., BOPREAL), may be given in payment for the cancellation of tax and customs obligations, with their interests, fines, and accessories (the “Obligations”), whose application, collection and supervision is in charge of the Federal Tax Administration (“AFIP”).
There are limitations to the type of Obligations cancelable through this benefit (e.g., check tax, related to the social security regime, social works, mandatory life insurance, occupational risk insurers, and others).
The BOPREAL that may be applied are those issued from the date of entry into force of the Decree (i.e., the day of its publication in the official gazette) to March 31st, 2024, and were expressly accepted by the AFIP. Let us remember that the BCRA can arrange various BOPREAL issues.
The BOPREAL may be used in payment at their technical value calculated at the applicable exchange rate.
In turn, the Decree establishes a limit of USD 3,500 MM for the total BOPREAL calculation to be used under this benefit, with the following schedule:
– Maximum of US$1,000 MM to be used between April 30th, 2025, until April 29th, 2026;
– Maximum of US$1,000 MM from April 30th, 2026, to April 29th, 2027;
– Maximum of US$1,500 MM from April 30th, 2027 to October 30th, 2027.
From the publications of specialized media, we understand that the Debt Stock exceeds (far) these quotas established under the Decree. Given this, we assume that the AFIP regulations will establish, among other issues, the limits of application.
Regulation
The Ministry of Economy, the AFIP, and the BCRA will dictate the explanatory and complementary rules to the Decree.
PAIS Tax
It is established that the subscription in BOPREAL pesos is covered by the PAIS Tax, applied to the total subscription amount. The tax will be the responsibility of the subscriber, and the financial entity through which said subscription is carried out will act as a collection agent.
The rate will be 0% until January 31st, 2024. As of February 1st, 2024, the rate will apply to import operations of goods with customs entry registration and/or to imports of services (in the terms established by the BCRA) provided, until February 12th. December 2023, inclusive, for which the bonds or securities mentioned in the previous paragraph are subscribed.
Please, do not hesitate to contact us should you require any additional information on this matter.
Sincerely,
Pablo J. Torretta