The Argentine government approved the Provisional Reform Decree 1112/2017 (December 29, 2017) that makes effective the integral tax reform. The purpose of this reform is to promote investment, competitiveness and boost the country towards a more equitable and efficient tax system.

Among the most important aspects of the Argentine tax reform, the following stand out:

1. Incentives are set for the reinvestment of profits - the tax rate on profits is reduced from 35% to 25% - and the advance refund of VAT balances is established for the investments made by companies in the long term. This will apply to companies, including SAS calls.
2. A tax for financial income is created for individuals according to the following aliquots: bank deposits, public securities, NOs, mutual fund shares, debt securities of financial trusts, bonds and other securities, in national currency without a clause of adjustment: 5%, and on the other hand, if they are in dollars or have an adjustment clause, the rate is 15%. You will have a special deduction.
3. The non-resident investors are exempt from paying the Income Tax, except in the case that they have invested in Lebacs issued by the Central Bank of the Argentine Republic.
4. A tax of 15% is created for disposal and transfer of rights on real estate located in the country. Regarding the results from operations of alienation of shares and trusts, digital currencies, securities, bonds and other securities, as well as by the transfer of real estate, they will be reached by 15% profit. The shares and securities listed on the Stock Exchange and the non-residents are exempt, except in the case of Lebacs.
5. The VAT of acquisition of chickens, pigs and rabbits is reduced from 21 to 10.5%, in order to lower the prices of those foodstuffs which are key in the family basket.
6. A 21% VAT will be levied on digital services when the use or effective exploitation takes place in the country.
7. In the case of alcoholic beverages, the aliquot goes from 29% to 26%It was also arranged that beverages containing caffeine and taurine (energizers) will be taxed at a 10%.

The tax strategy of the Treasury is that the tax deficit will fall from 4.5% this year to 3.2% in 2018. We will see.

 

B LAW & TAX
Alfonso Garrido Picon

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