Argentina Fintech Legal News #4.
CIRCULAR
Fintech Department Report | Argentina Fintech Legal News #4
Dear Sir or Madam,
In our Newsletter Nº4, you will find a brief summary of the recent legal developments that we consider relevant for the Fintech environment in Argentina.
Clarifications on the New Tax Withholding Regimes
Certain objective guidelines of habitually are established and the term of application is delayed
As we informed in our previous newsletter, on October 29 (through General Resolution No. 4622/2019), the Federal Tax Authority (“AFIP”) established a new withholding regime for Value Added and Income Tax, in charge of entities that provide electronic payment and/or collection services on behalf of third parties, including through the use of mobile devices and/or any electronic device, including virtual ones, over settlements made to merchants, lessors or service providers that use their platforms.
Now, through General Resolution No. 4636/2019, published in the Official Gazette on November 25, the AFIP limited the scope of the withholding regime, as well as postponed the application of the regime, due to certain concerns and inconveniences raised by the withholding agents.
In this regard, the original Resolution applied the withholding over merchants, lessors or service providers who were either registered as a Value Added Taxpayer or who could not credit their status under said tax or who could not evidence being registered in the “Simplified Regime for Small Taxpayers”. In respect to those who fail to prove their tax status under the Value Added Tax, the AFIP clarified that, in order to be subject to the withholding regime, they must carry out operations “on a regular basis” through the digital platforms. In that sense, “regular” operators are considered as those that accumulate at least 10 (ten) or more sales and for an amount total or higher than AR$ 50,000.
In addition, the effects of this withholding regime (which was originally supposed to apply overpayments after November 19, 2019) are extended, as follows: (i) for payments as of June 1, 2020, in the case of payments with DEBIN (Immediate Debit) or PEI (Immediate Electronic Payment) and (ii) for payments as of December 16, 2019, inclusive, in the case of the rest of the electronic means of payment.
Publication of the First Report on Financial Inclusion
A semi-annual report prepared by the Argentine Central Bank (“BCRA”)
On November 22, the BCRA published the first Report on Financial Inclusion, a semi-annual report aimed at communicating the status of financial inclusion in Argentina, the measures adopted in this area and, through specific metrics, monitor the advancement of the financial inclusion of the population.
During the analyzed period (December 2015 – March 2019), a greater dynamism in the terms of access and use of bank accounts was observed, with advances in banking infrastructure, in transactions through electronic means of payments and in savings instruments. The quality indicators also showed positive results in the financial education programs implemented by the BCRA. However, there are still some pending challenges, such as the need to cover deficits of physical access points in certain areas of the country, the further use of electronic means of payment, a greater penetration of credit instruments in the adult population and smaller companies, as well as the achievement of a higher degree of financial education of the population.
Click here to obtain the full report.
Expansion of the use of the CVU in the capital market
For both the receipt and settlement of funds.
Through the General Resolution No. 816/2019, published on November 14, 2019, the National Securities Commission (CNV) allowed that Payment and Compensation Agents and physical persons and/or legal entities that distribute Common Investment Funds or other authorized collective investment products, can receive funds directly from their client´s virtual accounts (through the use of the Uniform Virtual Key – “CVU”) and to settle payments to clients directly to their virtual accounts (also identified with CVU), as long as are local payments.
Clarifications on the Equivalence between Digital Signature and Notarized Signature
The application is now limited to the National Public Administration.
In the context of the conflict between the National Executive Power (“PEN”) and the Bar Association of Notary Publics of the City of Buenos Aires regarding the regulation of the equivalence of the digital signature with the certified notarized signature (see our previous report), on November 15th the PEN issued a new regulatory decree (Decree No. 774/2019), whereby it clarified that the equivalence of the digital signature and the notarizes signature shall only apply for the procedures carried out before the National Public Administration, whether centralized or decentralized. Therefore, the equivalence principle could not apply anymore to the private sector.
Do not hesitate to contact us should you require any further information on these matters.
Sincerely,
Daniel Levi
María Shakespear
Pablo J. Torretta
Andrés Schreiber
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.