Amendments to the Tax Regulations of the City and Province of Buenos Aires
1. Province of Buenos Aires
Main amendments according to Law No. 14,200, among others:
Tax over Immovable Assets
The Tax over Immovable Assets was updated by coefficients that where established according to the zone where the property is located.
Gross Income Tax
In general, tax rates did not vary, except for the following:
I For works and/or services and building works the rate was fixed at 3.5%.
II For the reparation of certain goods whose production or construction was already levied (machinery for general and specific use; tractors and agriculture machinery; machinery for the production of food, drinks and tobacco; textile machinery; electronic equipments, transmitters; ships and other boats; trains; aircrafts; among others), rate was fixed at 3%.
III For the selling in bulk of pharmaceutical and veterinary products, except for those located in the Province of Buenos Aires, rate was fixed at 4.5%.
Stamp Tax
a) Agreements over merchandising, cereals, oilseeds; buying and selling of shares, debentures and corporate bonds; leasing and sub-leasing of building works, services, movable and immovable assets, and other acts and agreements detailed in the Law will be levied with a 7.5‰ (seven and a half per thousand) tax rate, whenever they are registered in stocks, markets or chambers created as entities. For the same transactions that do not comply with the foregoing conditions, a 9‰ (nine per thousand) tax rate will be applied.
b) Agreements executed by agricultural and livestock producers in order to acquire and repair machinery and agricultural tools, wire fences, mills and watering holes are exempted.
Tax on Gratuitous Transfer of Assets
Many amendments were made to this Tax. The amount that determines if the gratuitous transfer of assets by parents, children and married couples is levied was fixed at AR$200,000 for each heir. For other kind of relationships, the amount was fixed at AR$50,000.
For a further analysis, please see the specific article ”Amendment and Regulation of the Law of Tax on Gratuitous Transfer of Assets” in this Marval News edition.
2. City of Buenos Aires
Main amendments according to Law No. 3,750, which modifies the Fiscal Code. Below we describe the most important changes, mostly upon the general provisions, referred to Stamp Tax and (with less modifications) Gross Income Tax.
General Section
a) The General Revenue Office (AGIP) is empowered to request preventive attachments for due tax obligations by the taxpayer or whom is responsible providing payment has not took place or when the tax assessment is not further appealable; such kind of measures may only be adopted if the taxpayer is a legal entity and owes to the AGIP amounts in excess of those provided by a special Law.
b) The definition of recidivism was modified. Under the new text of the legislation, recidivism will take place when three tax offenses are committed to the formal duties, or one material tax offense (by omission or fraud) only if each resolution imposing a sanction is not appealable before the preliminary investigation (instrucción) of the next summary.
Stamp Tax
a) In general, most 2010 tax rates remain in force.
b) Transactions executed in other jurisdictions will be levied, not only when purported to assets located in the City of Buenos Aires, but also “situated” in the City. If there was no proof about its location, they may be levied if the seller’s domicile is in that jurisdiction.
c) For onerous transfers of immovable assets, including the transfer of the revisionary interest and the legal instruments by which the possession is granted, the Tax will be calculated over the price, amount or value susceptible to be pecuniary appreciated assigned to the transaction, the tax value or the reference price of immovable assets (valor inmobiliario de referencia), taking into consideration the higher one.
d) For lease agreements, the AGIP is empowered to establish a leasing reference price, taking into consideration the potential-annual-minimum leasing rent, among other items.
e) Added exemptions:
I reinsurance agreements;
II pension rent for life and/or retirement agreements;
III acts related to the incorporation, change of corporate form and other acts performed by non-lucrative legal entities; and
IV legal instruments of any type, which have been originated by guarantee agreements granted by banks over lease agreements of a family house within the City of Buenos Aires.
Gross Income Tax
a) Added exemptions:
I incomes related to international transportation of passengers, aerial or by water, whenever there is a reciprocity agreement in taxation issues with the country of incorporation of the transportation company;
II leasing, design and building of stands in exhibitions, congresses and fairs, and the registrations to congresses when hired by foreign residents; and
b) The Law states that only bonuses, returns and discounts that have actually been agreed by periods of time or means of payment or amount of income or other similar concepts may be deducted form the taxable base; law adds that it is inappropriate to deduct amounts that apply to commercial practices that distort the bonuses and discounts.
This insight is a brief comment on legal news in Argentina; it does not purport to be an exhaustive analysis or to provide legal advice.