Bill to reform the Capital Market law. Tax aspects.

On November 16 2016, the Executive Branch presented the proposed reform of Capital Market Law No. 26,831.

In general terms, the main reforms that the project establishes are the following:

  • To incorporate the concept of administrative investment agents, i.e. those who offer regular financial advice and management services authorized by the CNV.
  • Repeal the power of the CNV to appoint supervisors who have the power to veto decisions made by the administrative bodies of the issuers.
  • Increase the funding of the CNV, but remove the fines imposed by the CNV as a source of financing.
  • Modify the right to preferential subscription, establishing that this right will be exercised through the allocation procedure determined in the respective public offering prospectus.
  • Modify the regulatory framework for takeover bids.
  • Assign new powers to the CNV in its role of controlling external auditors, such as the implementation of a register and the imposition of sanctions.
  • Establish the competence of the commercial courts – instead of the contentious-administrative courts – for the review of the decisions made by the CNV.

The project makes several modifications to Law 24083 of common investment funds. Firstly, it differentiates between closed and open CIF’s depending on their composition. Closed CIF’s must constitute a maximum number of shares which cannot be redeemed.

In relation to fiscal matters, CIF’s are exempt from the equalization tax when the CIF´s distributed income corresponds to shares of funds publicly offered under the authorization of the National Securities Commission so long as they make investments in Argentina. This tax is required for cases in which dividend payments or profits exceed the amount determined by the income tax law, accumulated by the end of the fiscal year immediately prior to the date of payment or distribution. Given these circumstances, they must pay 35% of said surplus.

Moreover, in relation to the income tax, the project provides that the income tax will be imposed to CIF’s that are not included in the first article of the Common Investment Fund Law No. 24.083, if they are not publicly offered under the authorization of the CNV, and in proportion with the investments not actually executed in Argentina.


Those who meet certain requirements will be able to deduct the amounts that correspond to profits.


The project makes several modifications that affect individuals directly or indirectly. Firstly, the tax exemption provided in Article 20 (w) of the income tax law is amended, that is transactions in the sale, exchange or disposal of shares, bonds or other securities obtained by resident individuals. The project establishes that this exemption will be applicable to shares when they are publicly offered and transactions have been made in markets authorized by the CNV.

In addition, those who take out options on shares in the public offerings of companies that are listed in markets authorized by the CNV may calculate 30% of the funds invested as payment on account of the income tax corresponding to the fiscal period in which the subscription was integrated.


Finally, the project establishes that income from the trading, exchange or disposal of shares and other securities obtained by beneficiaries from abroad will be subject to income tax, when they do not have a public offering and/or such operations have not been carried out in markets authorized by the CNV. However, these beneficiaries will also be taxed on their income if they do not meet the following conditions:

  • That the operations have been carried out in markets authorized by the CNV, under segments that assure price-time priority.
  • At the date of the transaction, the number of shares in free circulation of the issuing company exceeds 40% of the share capital.
  • In the 12-month period elapsed, the taxpayer and its controlling group have not carried out accumulated sale transactions in excess of 20% of the total number issued, subscribed and integrated shares of the issuing company in markets authorized by the CNV.
  • That the negotiation of the shares of the issuing company exceeds a minimum that will be determined in the regulation of the law.

In conclusion, this project will substantially modify various regulations, including the organization and operation of the CNV to tax aspects concerning all the subjects involved in the country’s operations.

We invite you to join our monthly newsletter