Argentina and Brazil signed an amending protocol to the, Argentina – Brazil Income Tax Treaty of 1980 on 21st July 2017. The protocol sets out maximum levels of taxation at source in specific categories of income; modifies the method to avoid double taxation in Argentina, and inserts a capital gains article into the treaty.
Decree No. 593/2017 regarding capital goods was published on July 28, 2017 in the Official Gazette. The Decree is effective from July 1, 2017. This decree modifies incentives under some articles of both Decree No. 379/2001 and Decree No. 594/2004. It also extends the amended incentives of Decree No. 379/2001 until December 31, 2017 in favor of domestic manufacture of capital goods, agricultural machinery and telecommunications equipment. A 14% incentive as a form of tax credit of the value of the goods produced (with some modification) can be charged against income tax, excise taxes and VAT. To apply for that incentive taxpayers have to file an affidavit within December 31, 2017. In this case taxpayers have to confirm that the figure of registered employees has not reduced from the number of employees registered from December 2011.
The Federal Tax Authority (FTA), on July 18, 2017, published the General Resolution 4094-E on the Official Gazette. This Resolution had been introduced into income tax in 2013. The time when the 2013 tax reform abolished the capital gains tax exemption for nonresidents, and required nonresident buyers to assess and pay the tax in certain circumstances, no regulations previously addressed the requirements. The new Resolution identifies the responsible one for withholding tax and other tax payment, the form and way of payment. This also launches a device for income tax payment arising from the disposition of shares, exchange, barter or quotas, sale, and other equity made by foreign recipients. Here, other equity contains investment funds quotas, securities, bonds and other values.
Capital gains on foreign entities was also announced on July 28, 2017. It also introduces different provisions. Applicable withholding tax (WHT) rate is one of the provisions. According to this, the applicable WHT rate will be 15% conditioning that it will be calculated over the net income determined according to section 93 of Income Tax Law or over 90% of the amounts paid for the acquisition of the previously declared essentials. The other provisions are foreign resident and Argentine resident, Retroactive application of the resolution and registration for the operation with the corresponding government entities. Finally, the Resolution launches an extension of the term until September 29, 2017 for tax payments. These taxes come from the operations carried out until 17 July 2017, specifying that all payments made prior that date will be considered as paid on time.
The cabinet of Qatar authorized to sign a Double Taxation Agreement (DTA) with Argentina on 21 June 2017 for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
Argentina has signed the multilateral instrument on 7 June 2017, aiming to facilitate the implementation of tax related measures to Prevent Base Erosion and Profit Shifting (MLI).
At the signing ceremony, Argentina introduced its 17 tax treaties with other jurisdictions that Argentina would like to designate as Covered Tax Agreements (CTAs), that is, to be modified by the MLI. In addition to the list of treaties, Argentina has also submitted a provisional list of reservations and notifications (MLI items) relating to the various provisions of the MLI.
The General Resolution No. 4008-E was published on 6th March 2017 in the Argentine Official Gazette. According to that resolution, Argentina has abolished the Early Declaration System for Services (DJAS) and the Early Declaration for Payments Abroad (DAPE). Submitting via this process applied to be a condition for accessing the official foreign exchange market to transfer funds abroad for certain transactions. The elimination denotes a more step in simplification of the systems regarding foreign exchange market. The DJAS filings, which was in force since 2012, were needed to report services provided by non-residents to residents. The information contains detailed and included the type of service incorporated, the amount charged and the bank account to which the funds will be transferred. The DAPE filings, in force since 2013, were required for payments to be made abroad regarding the following transactions: (a) the purchase of goods not imported into the country and traded to another country; (b) the interest payment; (c) the dividends payment and profits; and (d) imports through courier or certain simplified process.
A new extension of the VAT refund for purchases paid with debit cards has been rejected by the Executive Power and it was established by Decrees 1387/2001, 1402/2001 and 1548/2001. In accordance with Resolution 153/2016, the Ministry of Economic Affairs has primarily extended this VAT refund.