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| Ignacio Rodríguez |
Since September 23 2013, capital gains derived from the
transfer of shares in an Argentine company, as well as other
securities obtained by non-residents, have been subject to
Argentine tax.
The seller has the option – to be expressly
notified to the withholding agent – of determining its
tax liability by applying the 15% rate on the actual capital
gain realised, duly supported, determined in Argentine currency
or on a presumed basis consisting of 90% of the sales proceeds
(13.5% effective rate).
So far, however, no tax had to be paid on transactions
between non-residents because the Argentine tax rules did not
establish a mechanism to withhold and remit that tax.
On July 18 2017, through General Resolution 4094-E, the
Argentine tax authorities established the long-awaited
mechanism to withhold and pay the tax due on transactions
involving the transfer of Argentine securities, such as shares
and equity interests in local mutual funds.
The seller's stock broker must act as the withholding tax
agent if the shares are sold through a stock exchange that is
authorised by the Argentine Securities Exchange Commission
(CNV). If the sale does not take place through a stock
exchange, then the buyer must act as the withholding tax agent,
even if they are a non-resident. Neither the Income Tax Law nor
the General Resolution specify the withholding tax mechanism in
cases where Argentine shares are sold through a foreign stock
exchange. In these situations it is uncertain whether the
seller's broker or the buyer should withhold the tax.
If the buyer is a non-resident, or the transaction takes
place in a foreign stock exchange, the relevant party must
remit the tax to the tax authorities through an international
bank wire transfer considering the information needed to
prepare the respective order and the list of authorised
collecting agencies on the tax authority's website (http://www.afip.gob.ar). The tax
payment will be rejected if the withholding tax agent fails to
provide certain information, such as the tax ID of the entity
whose shares have been transferred or if the transfer is made
locally.
Also, whoever is required to register the share transfer
with the corporate authorities is required to provide to the
tax authorities the notification of the transfer, the buyer's
and seller's identities, and a copy of the withholding tax
payment voucher.
Resolution 4094-E, which entered into force on July 18 2017,
applies to transactions concluded on or after September 23
2013. For sales of securities concluded prior to July 18 2017,
the due date to remit the tax withheld was September 29
2017.
Not surprisingly, the tax authorities received many
complaints due to the retroactive effective date and the need
for those who are liable to update their systems. In response,
on July 20 2017, the Argentine tax authorities issued General
Resolution No. 4095-E suspending the application of General
Resolution 4094-E for 180 days.
It may be expected that during the suspension period the
Argentine tax authorities will clarify certain open questions
with regard to General Resolution No. 4094-E.
Ignacio Rodríguez (ignacio.e.rodriguez@ar.pwc.com),
Buenos Aires
PwC
Tel: +54 11 4850 6714
Website: www.pwc.com/ar