Amendment and Regulation of the Law of Tax on Gratuitous Transfer of Assets

The Tax on Gratuitous Transfer of Assets (the “Tax”) incorporated in the Province of Buenos Aires Tax Code by Law No. 14,044 levies every increase in wealth gratuitously obtained as a consequence of a transfer that comprises or affects one or more assets located in the Province of Buenos Aires and/or benefits an individual or entity with address in the Province (please refer to “Tax applied to gratuitous transfers of goods” published in Marval News # 88).

Province of Buenos Aires Law No. 14,200 –published in the Official Gazette on December 24, 2010- incorporates amendments to the Tax, the most relevant being as follows:

1. the reduction of the amount not subject to tax from AR$ 3,000,000 (approx. US$ 750,000) to AR$ 200,000 (approx. US$ 50,000) for the gratuitous transfers between parents, children and spouses; and to AR$ 50,000 (approx US$ 12,500) for other cases;
2. the calculation of the statute of limitation for the assessment audits of the Province of Buenos Aires tax authority. It provides that it will not start counting when the succession proceedings that should have been initiated with the Tribunals of the Province of Buenos Aires were initiated in another jurisdiction; and
3. the discharge of the debts accrued as of December 31, 2010 because of the application of the Tax.

Province of Buenos Aires Tax Authority’s Resolution 91/2010 (the “Resolution”) –published in the Official Gazette on February 7, 2011- set forth the manner and conditions that the taxpayers subject to the Tax must observe to fulfill with the assessment and payment of the Tax.

Among other things, it set forth that the tax payers must declare and assess the Tax through a tax return that is accessible on the tax authority’s web site. Lack of fulfillment with the filing of the tax return and/or the payment of the Tax is subject to sanctions.

The Resolution has also set forth that the notaries public and judges intervening in proceedings in which gratuitous increases in inheritance are verified must request proof of the filing of the tax return from the taxpayer as well as proof of the actual payment of the Tax.