On July 28, 2016, the Executive Branch issued Decree No. 895/2016 (the “Regulatory Decree”) that regulates Law No. 27,260 (the “Law”) which establishes a wide tax amnesty.
First of all, the Regulatory Decree provides that the family members mentioned in the Law need not be Argentine residents. Please remember that the Law establishes that the statement will be valid even when the assets disclosed are in possession of or registered in the name of the spouse, ascendants or descendants in the first or second degree of consanguinity or affinity, or even third parties.
Section 2 of the Regulatory Decree establishes that the transactions carried out for the disclosed assets to be registered under the name of the declarant – when filing the income or personal property tax documents for the 2016 period expiring in 2017 (Section 38) – will be deemed not onerous and will not be subject to any tax. This condition (i.e. the assets registered under the name of the declarant at that moment) will not apply when the owner of the assets is an entity (Section 39 Law 27,260).
Moreover, pursuant to Section 38 of the Law, when the assets are registered under the name of a corporate entity or trust (Section 3 of the Regulatory Decree), said entity must disclose the possession of assets in the same way as individuals, and assess the assets in accordance with Section 40 of the Law, subtracting the amounts which are eventually disclosed by individuals.
The disclosure under the terms of the Law about shareholders, partners, trustees, settlors, directors, etc. will grant all the benefits under the Law regarding the assets subject to the disclosure in relation to any person related to such entity.
The Regulatory Decree clarifies that the Law´s date of enactment is July 22, 2016 (“Date of the pre-existence of assets.”)
The Regulatory Decree establishes that tax obligations pending administrative, administrative adversarial or judicial proceedings in criminal tax matters, criminal exchange matters, or customs matters may be subject to the benefits of the Law.
Section 16 of the Regulatory Decree establishes the minimum that may be detected by AFIP without losing the benefits of the Act:
- ARS 305,000 or
- 1% of the disclosed assets, whichever is higher
The Regulatory Decree clarifies that the income tax exemption on exchange rate fluctuations involving foreign income will only apply to individuals or undivided estates, but not to business organizations. [Section 73]
AFIP regulation is expected at any moment.