Extension of the “Tax for an Inclusive and Solidary Argentina (PAÍS Tax by its acronym in Spanish)”. New regulation: Decree No. 377 – RG No. 5393.

Legal News - July 26, 2023

On 23.07.2023 the National Executive Branch issued Decree 377/2023 (Decree 377), published on 24.07.2023 in the Official Gazette of the Argentine Republic (also called BORA) and effective as from the date of its publication. The Decree 377 establishes adjustments to the regulation of Law No. 27.541 of Social Solidarity and Productive Reactivation within the Framework of the Public Emergency (Law 27.541 or Social Solidarity Law), specifically focusing on the “Tax for an Inclusive and Solidary Argentina (PAÍS Tax by its acronym in Spanish)”,extending its application to new concepts, since it will be levied on the acquisition of foreign currency for the import of certain goods and services.

The main points of the amendments state:

1.- The PAÍS tax will be calculated on the total amount of the transaction for the purchase of banknotes and foreign currency, excluding the amount of services taxed under subparagraphs c) and d) of Section 13 bis of Title III of Decree No. 99 dated 12.27.2019 and its modifications (Decree 99).

2.- The incorporation of reduced tax rates for:

a) the acquisition abroad of services indicated in Annex II of the Decree 377 or their acquisition within the country when provided by non-residents. The rate established in Section 39 of Law 27.541 will be reduced to 25%;

b) the acquisition abroad of freight and other transportation services related to import or export operations of goods or their acquisition within the country when provided by non-residents, identified with the BCRA Monthly Accounting Information System Code for Exchange Transactions S04, S30 and S31. The rate established in Section 39 of Law 27.541 will be reduced to 7,5%; and

c) the importation of goods included in the Mercosur Common Nomenclature (NCM) , with the exception of: (i) those whose tariff item (TI) is included in subparagraph b) of the first paragraph of this Section, or the TIs 2710.12.59, 2710.19.21, 2710.19.29, 2710.19.31, 2710.19.32, 2713.20.00, 3811.21.10, 3811.21.50, and 3811.90.90; (ii) inputs and intermediate goods directly related to products of the basic food basket; and (iii) other goods related to energy generation. In all these cases, the rate established in Section 39 of Law 27.541 will be reduced to 7,5%.

3.- That the Federal Administration of Public Revenue (FAPR) may establish an advance payment of up to 95%, to be paid under the terms and conditions set by said organization, for the operations mentioned in subparagraphs b) and e) of Section 13 bis of Title III of Decree No. 99 dated 12.27.2019 and its modifications: (i) definitive customs clearances for importation for consumption, including those processed in the Province of Tierra del Fuego, Antarctica, and the South Atlantic Islands; (ii) the introduction of goods into the free zone area, including those corresponding to the Province of Tierra del Fuego, Antarctica, and the South Atlantic Islands; and (iii) temporary import suspensive customs clearances made in accordance with Decree No. 1330/04 or Decree No. 688/02, in both cases.

4.- That the proceeds of the tax to be collected, on an incremental basis, will be distributed as follows: (i) 65% to finance programs under the responsibility of National Social Security Administration (ANSES), (ii) 5% to cover the benefits of the National Institute of Social Services for Retirees and Pensioners (INSSJP), and (iii) 30% in accordance with the provisions of Section 2 of Decree No. 184/2020.

In line with Decree 377, on 24.07.2023 the FAPR issued General Resolution 5393/2023 (GR 5393), published on 25.07.2023 in the Official Gazette of the Argentine Republic (also called BORA), effective as of the day of its publication, which makes adjustments to the General Resolutions No. 4659 (GR 4659) – which establishes the form, deadlines, requirements and other conditions for the declaration and entry of tax returns), requirements and other conditions for the declaration and payment of the tax, both by the collecting agent and the taxable person) and 4815 (GR 4815) -which establishes a regime for the collection of income tax or personal property tax, as the case may be, applicable to the transactions covered by the “PAÍS Tax”. It also establishes the amount, form, and conditions for the payment of the payment on account of the “PAIS Tax” in respect of the transactions to which it is applicable by virtue of the provisions of Decree 377.

Mainly, it is pointed out that:

1.- GR 5393 eliminates the second paragraph of section 3° (on the determination and timing of the levy) establishes new criteria for the collection of the tax (including a legend “IMPUESTO PAÍS” in the documentation of the transactions) and determines, for certain transactions, the application of different provisions and the way of collecting the tax.

Thus, new transactions provided for in section 13 bis of Decree 99/19 (Decree 99) are covered by the provisions of section 38. a) of Law 27.541 and the collection shall be made on:

a) Transactions for the purchase of banknotes and foreign currency in foreign currency carried out by residents in the country for the payment of:

(i) Obligations for the acquisition abroad of personal, cultural and recreational services (not including educational teaching) or their acquisition in the country when provided by non-residents: 30%;

(ii) Obligations for the acquisition abroad of the services listed in Annex II of Decree 99 or their acquisition in the country when they are provided by non-residents: 25%;

(iii) Obligations for the acquisition abroad of freight and other transport services for import or export operations of goods or their acquisition in the country when they are provided by non-residents: 7,5%;

(iv) Obligations for the importation of goods included in the tariff positions of the Mercosur Common Nomenclature (MCN) indicated in Annex I of Decree 99: 30%; and

(v) Obligations for the importation of goods included in the MCN, except for: (i) those whose tariff positions are included in subparagraph b) of the first paragraph of this section or are of the following OPs: 2710.12.59, 2710. 19.21, 2710.19.29, 2710.19.31, 2710.19.32, 2713.20.00, 3811.21.10, 3811.21.50, and 3811.90.90; (ii) inputs and intermediate goods directly linked to products of the basic food basket; and (iii) other goods linked to energy generation. In all these cases, the rate established in section 39 of Law 27.541 is 7,5%.

For cases (i), (ii) and (iii), the levy shall be determined on the price, net of taxes and fees, while for cases (iv) and (v), the levy shall be determined on the total amount of the transaction for which banknotes and foreign currency in foreign currency are purchased, without considering, for these purposes and if applicable, the amount of the services that are subject to the tax in accordance with subparagraphs c) and d) of the section 13 bis of Decree 99. In these cases, the collection shall be effective at the time of the exchange transaction.

Likewise, the corresponding tax rate in each case -as provided for in subparagraph a) of section 39 of Law 27.541 and in sections 13 bis and 17 of Decree 99, as amended- shall be applied to the amount in pesos of the transaction in question.

Respect to RG 4815, subsection a) of the second paragraph of article 5 was replaced and a 45% tax was levied on the purchase of bills and foreign currency in foreign currency, including traveler’s checks for hoarding or without a specific purpose.

2.-In relation to the implementation of the Payment on Account of the “PAÍS Tax”, GR 5393 introduces this mechanism for the import operations of: (i) the goods included in the tariff positions of the MCN indicated in Annex I of Decree 99 and (ii) the goods included in the MCN, with the exception of the tariff positions and other cases excluded by subparagraph e) of section 13 bis of Decree 99.

The resolution also determines that the calculation of the payment on account will be on the FOB value declared in the import destination with the possibility of discounting advance payments made in US dollars.

The setting specific rates for each type of operation covered by the payment on account, as follows:

a) Operations of purchase of banknotes and foreign currency in foreign currency carried out by residents in the country for the payment of the import of goods included in the tariff positions of the Mercosur Common Nomenclature (N.C.M.) indicated in Annex I of Decree 99: 28,50%.

b) Operations of purchase of banknotes and foreign currency in foreign currency carried out by residents in the country for the payment of the import of goods included in the MCN, except for the tariff positions mentioned in that paragraph: 7,125%.

Import transactions recorded with foreign currency transfer by a third party and those entering through a PSP/Courier provider are excluded from the payment on account.

The obligation of payment of the payment on account falls on the importer, who must comply with it at the time of the officialization of the import destination, together with the duties, fees and other taxes levied on the import.

The document issued by the Malvina System will be evidence enough of the payment on account.

Finally, the resolution incorporates general provisions, by which it establishes that the provisions of GR 5393 shall enter into force on the day of its publication in the Official Gazette and shall be applicable:

a) Section 1° of Title I, on the amendments introduced to GR 4.659: in accordance with the validity established by Decree 377.

b) Section 2° of Title I, on the amendments made to GR 4.815: for transactions carried out as from the effective date of this GR 5393.

c) Title II -Payment on Account-: for import destinations made official as from the entry into force of this RG AFIP 5393/23.

You may access to the Decree and the GR 5393 at the following links:

https://www.boletinoficial.gob.ar/detalleAviso/primera/290802/20230724

https://www.boletinoficial.gob.ar/detalleAviso/primera/290913/20230725

For any questions or inquiries, please contact:

Liban Angel Kusa: liban.kusa@bruchoufunes.com

Nicolas Nogueira Castellini: nicolas.nogueira.castellini@bruchoufunes.com

Antu Aguilar: antu.aguilar@bruchoufunes.com

Luciana Rodríguez: luciana.rodriguez@bruchoufunes.com

Juan Salvador Mayedonchi: juan.mayedonchi@bruchoufunes.com