Tax on Debits and Credits Now Applies to Certain Payment Account Movements

In the recitals of Decree No. 301/2021 published in the Official Gazette on May 7, the Argentine Executive acknowledges that, in recent times, there has been significant increase in the use of digital means of payment through so-called “payment accounts,” managed by Payment Service Providers (“PSP”) and regulated by Communique “A” 6885 of the Argentine Central Bank (the “BCRA,” after its acronym in Spanish). Pursuant to Decree No. 485/2017, these payment accounts are exempt from the Tax. However, with the aim of safeguarding competition on equal terms, the Executive claims the need for consistency between how payment account transactions are taxed as compared to transfers made through the traditional banking system, which are subject to the Tax.

Likewise, the Executive sustains that bank transfers levied by the Tax are typically  made by legal entities through checking accounts, while transfers typically made by individuals through savings accounts are tax-exempt.

According to the Executive, in order to align bank transfers with digital transfers, all individuals using payment accounts should be exempted, so as to enhance the use of these payment methods over the use of cash.

Therefore, regardless of the exemptions, only payment account transactions carried out by legal entities will be subject to the Tax. And PSPs or companies rendering electronic payment and/or collection services on behalf of third parties will act as collection and settlement agents of the Tax.

Under these premises, Decree No. 301/2021 incorporates the following amendments to the text of Decree No. 380/2001, which substantially regulates the Tax:

• Although the burden of the Tax is carried by the payment account holder, in the case of movements of funds made through payment accounts, PSPs and companies rendering electronic payments and/or collection services on behalf of third parties are incorporated to the Decree as “Collection Agents.”

• The movement of funds in payment accounts will be subject to a generic rate of 6% on credits and 6% on debits, as well as the reduced rates set forth in section 7 of Decree No. 380/2001, when applicable. When cash withdrawals are made, debits made from payment accounts will be taxed at the rate of 1.2%, provided that the account holders are not: (a) individuals or (b) legal entities that legally qualify as “Micro and Small Companies” pursuant to article 2 of Law No. 24,467 (in which case they are exempted, as explained below).

• Current exemptions in subsections b) and d) of section 10 of Decree No. 380/2021 are modified and redrafted as follows:

• • Sectin b: Transfers of funds made by any means, except when using checks, to other bank accounts held by the same person that makes the transfer.

• • Sectin d: Accounts used exclusively to conduct their business activities by companies rendering electronic payments and/or collection services on behalf of third parties, of public services bills, taxes and other services, including accunt movements that enable the delivery of cash against debit in bank accounts or payment accounts or the deposit of cash credited to bank accounts or payment accounts, in the latter two cases provided that their holders are individuals or legal entities that demonstrate meeting the legal requirements to classify as Micro and Small Companies, under the terms of Section 2 of Law No. 24,467...; as well as those used by the official agents of those companies, to the extent that they use the accounts exclusively for such transactions.

• New exemptions are established for the following cases:

• • Transfers f funds between accounts (including payment accounts) opened in the name of the same holder.

• • Payment accunts opened or provided by PSPs or companies rendering electronic payments and/or collection services on behalf of third parties, exclusively through the use of mobile communication devices and/or any other electronic support, whose holders are individuals. PSPs are also exempted for any movement related to the conduction of their business activity.

• • Bank accunts used by PSPs to comply with BCRA provisions and the movement of funds related to the conduction of their business activity.

• • Debits and credits made in accunts, including payment accounts, whose holders are registered under the Simplified Tax Regime fr Small Taxpayers (“Mnotributo”), as lng as they are registered in the “Registry f Tax Benefits in the Tax on Credits and Debits in Bank Accounts and other Transactions,” pursuant to (AFIP) General Resolution No. 3900/2016.

• The broad exemption provided by Decree No. 485/2017 on “accounts and/or subaccounts, including virtual ones, used exclusively in the administration and operation of transfers through the use of mobile communication devices, and/or any other electronic support, and accounts and/or sub-accounts, including virtual ones, used by companies rendering electronic payments and/or collection services and official agents appointed for the purpose of fulfilling that task” is repealed.
             
• Holders of payment accounts to which the general 6% rate applies  will be entitled to compute 33% of the amounts collected under the Tax as a payment in advance of their income tax liability. While holders to which a lower rate applies may compute 20%.

 

The provisions of Decree No. 301/2021 will be effective for taxable events taking place starting August 1, 2021.

As of that date, payment accounts are subject to the following:

1. Movements of funds made by individuals and Micro and Small Companies are exempted from the Tax.

2. Movements of funds made by taxpayers registered under the Simplified Tax Regime (“monotributistas”) are also exempted from the Tax.

3. Movements of funds made by legal entities (that do not qualify as Micro and Small Companies or as “monotributistas”) are subject to the Tax, except in the case of transfers between their own accounts.

4. PSPs or companies rendering electronic payment and/or collection services on behalf of third parties must act as collection agents of the Tax, if applicable.