Argentina – Amendment to Moratorium Established by Law No. 27,541.

On August 26^th, the Law to Extend the Regularization Regime for Tax Obligations to Mitigate the Effects of the COVID-19 Pandemic – Law No. 27.562 – was published in Argentina.

This Law aims at broadening the scope of the Regularization Regime of Tax, Customs and Social Security Obligations.

The main features of the new extended Tax, Customs and Social Security Moratorium Regime are:

Scope:

1. Regularization of (i) national taxes and Social Security obligations expired as of July 31, 2020, or infringements related to such obligations; (ii) gambling tax and fuel tax; and (iii) debts arising from promotional regimes granting tax benefits.
2. Refinancing of payment plans in force and emerging debts of expired plans.
3. Fund for Cooperative Education and Promotion Obligations established by Law No. 23.427, as amended.
4. Regularization of additional charges for export or import taxes. Settlement of said taxes in Customs Law infractions procedures.

Entitled Applicants:

1. MiPyMES;
2. Non-profit entities and community organizations registered as foundations, civil associations, simple associations and entities with municipal recognition and that, with their own domicile and that of their directors established in national territory, do not pursue profit purposes directly or indirectly and develop programs for the promotion and protection of rights or direct social aid activities; and
3. Individuals and undivided estates that qualify as small taxpayers  and that own financial assets located abroad, unless the repatriation of at least thirty percent (30%) of the proceeds of their realization, directly or indirectly, is verified, within sixty (60) days from accessing the Regime. In the case of legal entities, the repatriation condition applies to their partners shareholders, who directly and indirectly own at least 30% of their share capital. Transitory unions, collaboration groups, cooperation consortia, associations without legal existence as legal entities, non-corporate groups or any other individual or collective entity, including trusts, are also included.

Deadline: 

• Submission to this Plan shall be allowed until October 31st, 2020.
• Payment plan maximum term: 6 – 60 – 48 – 96 – 120 installments, depending on the taxpayer and type of obligations included.
• 1-year statute of limitation suspension on any action to determine or require the payment of National Taxes.

Effects / Benefits: 

Taxpayers that adhere and comply with the requirements of this Regime, shall be granted the following exemptions and/or pardons:

1. Fines and other penalties provided in laws No. 11.683, as amended (Federal Tax Procedure Law), Law No. 17,250, as amended (National Social Security Fund Law), Law No. 22,161, as amended (Subsidies and Household Allowance Law), and in Law No. 22,415, as amended (National Customs Code), provided that they do not have a final ruling at the date of adhesion to the Regimen;
2. 100% of the compensatory and / or punitive interest provided in articles 37 and 52 of law No. 11,683, as amended (Federal Tax Procedure Law), related to the principal outstanding amount and included in the Regime, related to the Contribution provided by subsection c) of article 10 of law No. 24.241,as amended (Pension and Retirement Integrated System Law), as amended, of self-employed workers included in subsection b) of article 2;
3. 100% of the compensatory and / or punitive interests provided in articles 37, 52 and 168 of Law No. 11,683, as amended (Federal Tax Procedure Law, as well as compensatory and / or punitive interests on fines and customs taxes (including amounts that in the concept of export incentives should be returned to the AFIP) provided in articles 794, 797, 845 and 924 of the National Customs Code, in the amount that for the total interest exceeds the percentage ranges 10% – 75%

This new regime introduces the following additional benefits:

1. Small Taxpayers Simplified Regime grants an exemption of the tax component depending on the number of installments chosen, as follows:

a) A and B Categories: six (6) monthly and consecutive installments.

b) C and D Categories: five (5) monthly and consecutive installments.

c) E and F Categories: four (4) monthly and consecutive installments.

d) G and H Categories: three (3) monthly and consecutive installments.

e) I, J and K Categories: two (2) monthly and consecutive installments.

The benefit limit can never exceed an amount equivalent to AR$ 17,500.

2. Income Tax Registered Taxpayers: special deduction, as follows:

f) Individuals and Undivided Estates: entitled to a one-fiscal-year deduction equal to 50% of the amount stated by subsection a) of article 30 of the Income Tax Law. This benefit does not apply to those included in subsections a) – public sector employees -, b) – private sector employees -, and c) – retirement, pensioned – of article 82 of such Law.

g) Those referred by article 53 – corporate profits – that qualify as Micro, and Small Entities: entitled to choose between performing the corresponding depreciation as of the authorization of the asset, in lie with the depreciation general rules, or performing the depreciation in line with the following regime – applicable to investments effectively made until December 31^st, 2021:

i) For investments in movable property acquired, elaborated or manufactured: minimum of 2 annual, equal and consecutive installments.

ii) For investments in imported movable property: minimum of 3 annual, equal and consecutive installments.

iii) For infrastructure work investments: minimum of annual, equal and consecutive installments arising from considering their estimated useful life reduced in 50%.

Both benefits shall be applied on the tax returns related to tax periods ended after December 30th, 2020. Further, the abovementioned deductions shall never generate favorable balance nor allow any carryforward. Also, the referred benefits are non-accumulative.