Exchange of Information: new mandatory regime for financial institutions regarding transactions with foreign residents.
Following the due diligence standards set out in the “Common Reporting Standard” (CRS) prepared by the Organization for Economic Cooperation and Development (OECD) the National Tax Authorities launched a new information regime for financial institutions on accounts and transactions whose owners are and/or involve non- residents. Reporting entities must comply with this regime on an annual basis and regarding accounts with a value equal to or greater than USD 100,000 as of December 31ST of each year . The information must be submitted to the AFIP until 31 May following the year under review.
Income Tax: new list of “tax heavens” jurisdictions.
The National Tax Authorities issued a new list of jurisdictions considered as “co-operators for purposes of fiscal transparency” as of January 1st 2016. Recall that Argentina shifted form a “black list” criterion (jurisdictions considered as tax havens) to a “white list” (countries that have signed treaties for the avoidance of double taxation or tax information exchange agreements – either bilateral or multilateral-). It is worth highlighting the introduction on the list of Hong Kong, Barbados, Cyprus, Gibraltar, and Seychelles as “cooperators”; and the removal of Angola, UAE, Kuwait, Qatar Emirates and Vietnam (that shall be considered as “tax havens” jurisdictions). This update will require a revision of transactions involving jurisdictions not included in the “white list” (for instance; application of Argentine transfer pricing regulations, timing limitation on the deductibility of certain expenses paid by Argentine residents, presumption of deemed unjustified wealth increase applicable to funds entering the country from tax- havens, increase of the income tax withholding rate applicable to certain interest payments made to banking institutions located in these jurisdictions, effect on the computation of foreign tax credits, application of Argentine CFC rules).
New Withholding regime for transaction of financial future derivatives over foreign currency.
The National Tax Authorities established a new withholding regime applicable to the purchase and sale transactions of financial future derivatives over foreign underlying currency, performed in the authorized markets of Argentina. The aforementioned rules apply only if the given transaction generates a positive results, and legal entities will be subject to a withholding of 35% of the Income Tax, and individuals to a withholding of 0.5% of the Tax on Personal Assets.
Oil & Gas – Extension of tax exemptions for certain biodiesel.
The Executive Branch has recently extended until April 30th, 2016 the tax exemptions provided for biodiesel fuel, pure biodiesel and biodiesel employed as liquid fuel in power generation. Recall that tax benefits were originally granted until December 31st 2015. Thus, the tax created by Law No. 23,966 (Liquid Fuels and Natural Gas Tax), will not apply for the transfer of fuel biodiesel or pure biodiesel. Moreover, biodiesel used for the generation of electricity will not be levied by Law No. 26,028 (transfer tax on oil or other liquid fuels).