Tax Law: New moratorium.
CIRCULAR
Tax Law Department Report | New moratorium
Dear Sir or Madam,
Law No. Law No. 27,562 (hereinafter, the “Law”), published today in the Official Gazette today, broadens the scope of the Regularization Regime for Micro, Small and Medium Enterprises (hereinafter, “MIPyMEs” for the Spanish acronym) stated by Law No. 27,541 and enters into force today, although the Executive Branch should release regulations to implement the moratorium.
• Which debts may be regularized?
Outstanding debts as of July 31st, 2020, including national taxes and social security taxes (certain exceptions apply). Refinancing of payment plans in force and emerging debts of expired plans are also included.
• Some of the benefits
a) Exemption from fines and penalties to the extent they are not yet enforceable.
b) Reduction of interests.
c) 15% reduction of the consolidated debt when the entire amount is paid in cash.
• Who are excluded?
Individuals and undivided estates not considered as small taxpayers (according to the definition to be provided by the Federal Tax Authority) and those taxpayers who do not qualify as MIPyMEs or non-profit entities or community organizations (with special characteristics) that hold financial investments outside Argentina, unless they repatriate to Argentina 30% of the funds obtained from the sale of those investments within 60 days of entering into the moratorium.
In the case of legal entities, the condition of repatriation is applicable to their shareholders, direct and indirect, who own a percentage of no less than 30% of their share capital.
• Deadline to apply for the moratorium
The deadline to apply for the moratorium is October 31st, 2020.
• Some special expiration reasons
Performing any of the following transactions within 24 months of the date the Law entered into force:
a) Those taxpayers who do not qualify as MIPyMEs or non-profit entities or community organizations (with special characteristics):
1. Distribution of dividends.
2. Access to the Single Free Exchange Market (MULC) in order to make payments to foreign related parties for (i) technical assistance, engineering or consultancy; (ii) transfer of rights or licenses for the exploitation of invention patents and all the remaining concepts not included in (i); interests or fees paid for credits, loans or any source funds placement.
3. Sale of debt bonds in exchange for foreign currency or the transfer of debt bonds to foreign custodian entities.
Conditions 2 and 3 also apply to individuals and undivided estates not considered as small taxpayers (according to the definition to be provided by the Federal Tax Authority).
b) Acquisition of foreign financial investments or transfer of Argentine financial investments.
Should you require any further information on this matter, please do not hesitate to contact us.
Santiago L. Montezanti