The tax on credits and debits on bank accounts may be partially computed as payment on account of other taxes

Decree No 534/2004 (the “Decree”) was published in the Official Gazette on May 3, 2004. It amended Decree No 380/2001, which prescribes the regulations of the so-called “Tax on Credits and Debits on Bank Accounts” (the “Tax”). The Decree sets forth the possibility of partially computing the Tax as a payment on account of either the Income Tax and/or the Tax on Presumed Minimum Income.

Holders of bank accounts in financial institutions, subject to the 0.6% rate (pursuant to Section 1, a) of Law No 25,413, which created the “Tax”), are able to compute 34% of the Tax paid and/or withheld as a payment on account of the income tax and/or the tax on presumed minimum income. Those liable for the Tax because of the transfer of their own funds, or funds belonging to third parties, even in cash, taxed at the 1.2% rate (pursuant to Section 1, b) and c) of Law No 25,413), are able to compute 17% of the Tax paid and/or withheld as a payment on account of the income tax and/or the tax on presumed minimum income.

Taxpayers may compute the credit in their annual tax return of the income tax and/or the tax on presumed minimum income, or in their respective advance payments. Any uncompensated balance may be carried to other fiscal periods until it is fully compensated. Any uncompensated balance may not be compensated with other taxes, nor reimbursed to the taxpayer, nor transferred to a third party. This new regime is applicable to transactions executed as of May 1, 2004. Taxpayers may compute the payments on account of the income tax and/or the tax on presumed minimum income as of the current fiscal period.