AFIP Established a New Advance Payment for Personal Assets Tax or for Income Tax

Under Resolution (AFIP) No. 4815, the Argentine Tax Authority (the “AFIP” after its acronym in Spanish) established a collection regime for operations affected by the “Tax for an Inclusive and Solidarity Argentina (PAIS Tax)” (https://www.marval.com/publicacion/se-crea-el-impuesto-para-una-argentina-inclusiva-y-solidaria-13491&lang=en).

The following expenses are among those excepted from collection: expenses related with health care, medicine purchases, acquisition of books, the use of educational platforms and software; expenses related with research projects made by researchers working for a government department; and the international acquisition of equipment materials and other assets to be used for firefighting and for citizens’ protection.

The amounts collected will be considered, according to the tax condition of the taxpayer, as an advance payment of the following taxes:

a. Personal Assets Tax, for taxpayers/consumers registered in the “Régimen Simplificado para Pequeños Contribuyentes” (“Monotributo”) which are not subject to Income Tax.

b. Income Tax for those that are not included in section a).

The amounts collected could be computed in the annual Income Tax or in the Personal Assets Tax  return of the fiscal period in which the collection took place. When the amounts collected give a balance in favor of the taxpayer, such amount could be applied for the payment of other tax liabilities.

The same agents that must collect the PAIS Tax are the ones that must collect this advance payment. In the event that an aggregator of payment is involved, the collection would be made by this intermediary.  

The PAIS Tax taxpayers are the ones that would be subject to this collection as long as they are Argentine residents.

In general terms, the collection regime applies over most of the transactions that are currently subject to PAIS Tax and implies a 35% tax rate over those transactions (net from PAIS Tax).

If the person that suffered the collection is not an income tax or a personal asset tax taxpayer, and, consequently is unable to compute the collected amount, that person is able to request a refund at the end of the calendar year in which the collection was made.

The Resolution came into effect on September 16, 2020 and is applicable for the transactions performed as from such date.