18 December 2015
Global Tax Alert
News from Americas Tax Center
Argentina’s new
Government relaxes
foreign exchange
controls and reduces
export duties
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Argentina’s new Government, which took office on 10 December 2015, recently
announced important measures dealing with foreign exchange matters, as well
as customs duties. The main purpose of the new measures is to relax several
restrictions imposed on the foreign exchange market in recent years.
Foreign exchange matters
As stated by the Minister of Finance, the new measures will revert to the rules
in force until November 2011 for the foreign exchange market, which is when
most of the existing restrictions on foreign exchange matters were enacted.
In conjunction with the relaxation of the foreign exchange restrictions, a
devaluation of the Argentine currency in the free exchange market was expected.
In fact, while the official exchange rate (selling type) published by the Argentine
National Bank on 16 December 2015, was US$1=ARS9.835, the rate as of
the closing of 17 December 2015, was US$1=ARS13.95, meaning a variation
of almost 42% after the announcement and initial implementation of these
measures.
The following new measures have been enacted through published rules:
•Payments abroad for imports of goods and services can now be made without
any limit through the foreign exchange market; this provision applies to new
payables (please see below dispositions for outstanding debts).
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Global Tax Alert Americas Tax Center
•The purchase of foreign currency by individuals and
companies for treasury purposes, including investments
abroad (which had been significantly limited in recent
years), was reinstated, with a cap of US$2 million per
month.
•The mandatory deposit (30%) on the incoming currency
into Argentina (applicable to loans granted by foreign
parties, as well as other transactions) was eliminated.
•Financial loans are not required to be settled in Argentina
(the requirement to provide evidence showing the inflow
of funds, however, remains in effect for the subsequent
payment of principal and interest through the foreign
exchange market); the minimum term for repayment was
reduced from 365 to 120 days and advance payment will
also be allowed (as long as the 120-day term is respected).
•Tax surcharges – creditable against income tax – for the use
of credit cards abroad, travel and tourism expenses (35%)
and purchase of foreign currency by individuals (20%) were
abrogated.
For outstanding debts for imports of goods and services, the
Government established a payment schedule as follows:
Outstanding debts for imports of goods
•Until December 2015, the limit per importer should not
exceed US$2 million.
•From January 2016 through May 2016, the limit per
importer will amount to US$4.5 million.
•As from June 2016, there will be no cap.
Outstanding debts for services rendered by
nonresidents
•As from February 2016, up to US$2 million per client may
be transferred.
•From March 2016 through May 2016, the cap per client
will be US$4 million.
•As from June 2016, there will be no cap.
The regulations establishing controls on export prepayments
and prefinancing transactions (such as providing evidence
for outright purchases, shipment terms and indebtedness
caps, among others) were eliminated.
Lastly, the Argentine authorities enacted a local withholding
tax system applicable to dollar future agreements arranged
during the months in which the previous restrictions on
the foreign exchange market were in force. In this sense,
a withholding of 35% (creditable against income tax) will
apply on those earnings obtained by the buyers of dollar
future contracts. The withholding will apply to the difference
between the amount of the transaction at the last market
price valuation for each open contract, and the amount
according to the price when the contract expires.
Export duties
One of the first measures announced by the new Government
was to eliminate export duties for agricultural products
(except for soy, for which the rate was reduced from 35%
to 30%).
Furthermore, the Government has also announced the
elimination of export duties for industrial products. The
rule still needs to be published in the Official Gazette.
Implications
Some significant rules are still expected, which may be
released soon. It is expected that the “DJAI” (early import
declaration) system, which required a prior approval before
entering into any import transaction, will be eliminated by
year-end. It is also expected that certain specific categories
of products will now be subject to import licenses (automatic
and not automatic); however, the specific measures are still
to be published.
With respect to dividend and profit remittances, although
it is generally agreed that restrictions will be gradually
eliminated, the Government has not published a rule for
accumulated profits and dividends generated as from now.
Regulations are still awaited.
The foreign exchange regulations were not abrogated and
the “Single and Free Exchange Market” environment is still
in place (though working more properly); the set of written
(and also non-written) rules that were introduced in 2011,
however, which severely restricted the market, have been
significantly amended.
In short, the new announcement and rules clearly reflect
the decision of the new Government to eliminate existing
restrictions and barriers for the free circulation of funds,
to attract new investments and capital into the country,
and to promote Argentine export sectors. This also marks
the direction of the Government towards the reinsertion of
Argentina into international markets.
Global Tax Alert Americas Tax Center
For additional information with respect to this alert, please contact the following:
Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires
•
•
•
•
•
Carlos Casanovas
Gustavo Scravaglieri
Ariel Becher
Pablo Baroffio
Alex Saul
+54 11 4318 1619
+54 11 4510 2224
+54 11 4318 1686
+54 11 4510 2271
+54 11 4318 1621
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Ernst & Young LLP, Latin American Business Center, New York
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Alfredo Alvarez
Pablo Wejcman
Ana Mingramm
Enrique Perez Grovas
+1 212 773 5936
+1 212 773 5129
+1 212 773 9190
+1 212 773 1594
Ernst & Young LLP, Latin American Business Center, London
• Jose Padilla
+44 20 7760 9253
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
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