The Argentine Tax Authorities (“AFIP”) has published General Resolution 4227/2018 on April 12, 2018 in the official gazette. It is the regulation of the income tax on financial income obtained by beneficiaries abroad. This resolution was issued by Law 27,430 are regulated in terms of the modifications introduced in the Income Tax with respect to financial income obtained by foreign beneficiaries incorporated as Chapter II of Title IV of the Income Tax Law. Under article 16 of this general resolution, the provisions has entered into force on the tenth business day following its publication in the Official Gazette. That means it effects from April 26, 2018. The corresponding treatment is established when the payments of the investments referred to in this regulation are made to beneficiaries abroad who reside in non-cooperating jurisdictions or the funds invested come from non-cooperating jurisdictions.
Withholding tax (WHT) rules on interest
This Resolution set forth the same withholding tax (WHT) rates of Decree 279/2018 on interest income. That Decree was effective from April 10, 2018. Under this resolution, a 5% withholding tax rate applies to interest on bank deposits in national currency without an adjustment clause (e.g., a clause to adjust for inflation). On the other hand, a 15% WHT rate applies to interest on bank deposits in national currency with adjustment clause or in foreign currency. Only 43% of the net profit has presumed to be Argentine-source income if a foreign investor be eligible as banking entities under the supervision of a Central Bank or similar authority.
WHT rules on capital gains
A 15% tax rate applies to capital gains from shares or other equity participations, including Income from LEBACs, negotiable obligations, shares of mutual funds, debt securities of financial trusts and similar contracts, bonds and other securities with adjustment clause or foreign currency. And, a 5% WHT rate applies to capital gains from investments in ARS without an adjustment clause. The rates apply on a 90% presumed net gain profit, unless the beneficiary of the income wishes to apply the rates to the actual net profit.
Beneficiaries from outside-non-cooperative jurisdictions
According to article 10 of this resolution, in the case of beneficiaries living in non-cooperating jurisdictions or the funds invested come from non-cooperating jurisdictions, has retained as a sole and final payment on 35% on the presumed net gain in accordance with the provisions of Article 93 of the tax law, according to the type of profit in question.
