On 19 April 2021, Decree N° 244/2021 (the “Decree”) was published in the Official Gazette, which regulates the Argentine Federal Construction Incentive and Access to Housing Law (the “Law 27.613”), designed to promote the development or investment in real estate projects carried out in the country.
The Decree will allow investors to access the tax benefits provided for in Law 27.613.
The Decree provides as follows:
- The degree of progress will be determined on the basis of the information submitted to the competent building authorities and/or the opinion of a registered professional competent in the field.
- The Federal Administration of Public Revenues (AFIP) will be in charge of implementing a registry for the purpose of reporting the relevant data on real estate projects.
- The exemption from personal property tax (the “IBP”) referred to in Article 3 of Law N° 27.613 applies to investments made after the entry into force of the aforementioned law.
- Residents are considered to be those persons who have this status on the date of entry in force of the law. The following are considered as such:
- Human persons of argentine nationality, native or naturalized;
- Human persons of foreign nationality who have obtained permanent residence in the country;
- Undivided inheritances;
- Companies and sole proprietorships incorporated or located in the country;
- Trusts and mutual funds
- As for the payment on account of the IBP of the equivalent of 1% of the value of the investments, it will proceed after the amounts paid abroad for taxes similar to the IBP have been computed, in accordance with the guidelines established by the last paragraph of Article 25 of the IBP Law. In the event that the taxpayer owns assets abroad and has no repatriated financial assets under the terms of the aforementioned Article 25, it provides that the payment on accounts shall first be computed against the tax determined by the application of the first paragraph of the aforementioned article, and then the reminder may be imputed against the tax determined by the application of the differential rates provided for in Article 9 of Decree N° 99/2019.
- The amounts deposited in the Special Deposit and Cancellation Account for Argentine Construction (the “CECON.Ar”) may be used for the following purposes:
- To keep the deposited in their currency of origin;
- In the case of foreign currency, to sell them in the Free Foreign Exchange Market, through the financial institution where the deposit was made;
- Apply them temporarily, and only once, to the acquisition of national public securities, for their subsequent sale with settlement, exclusively, in legal tender.
- The payment of the special tax for laundering cannot be paid with the funds deposited in the CECON.Ar. In other words, the tax must be paid with money previously declared before the national tax body.
The IBP exemption will not apply to those who have made the voluntary declaration of foreign and/or domestic currency holdings.
Regulations are still pending from the Federal Administration of Public Revenues (AFIP) regarding the granting of tax benefits and the payment of the special tax for laundering, and from the Central Bank to set up the special account.