BDO Indirect Tax News

Argentina - Changes made to tax on foreign currency exchange transactions

A decree issued on 13 December 2023 increased the rate of the tax on foreign currency exchange transactions (“PAIS” tax) and a subsequent decree released on 4 January 2024 removed some transactions from the scope of the PAIS tax.

The PAIS tax, which has been in effect since 2029, applies, inter alia, to foreign currency exchange transactions carried out by Argentine financial entities on behalf of, and to the order of, local acquirers or borrowers for the payment of goods and services provided abroad. These payments are made using a debit, credit or purchase card issued by Argentine entities or any other payment mechanism authorised by the regulations. The PAIS tax is applicable to Argentine tax residents on the cancellation or payment for goods and services from a foreign source, including services rendered through digital platforms. The financial institutions or entities that collect the payments for the goods and/or services are the collection agents.

The PAIS rate is increased from 7.5% to 17.5% as follows:
  • Acquisition abroad of freight and other transportation services for import or export operations of goods; and
  • Import of goods except for basic food, fuel, lubricants and additives, etc.
The decree released on 4 January excluded from the PAIS tax transactions involving the temporary admission regime and the introduction of goods into free trade zones intended for processing, manufacturing or improvement for subsequent export to third countries.
This change was made to stimulate the growth of the export sector without affecting the import of goods intended for the manufacturing of goods for export.

It should be noted that the purchase of foreign currency for the acquisition of services abroad (import of services) and the acquisition of services in Argentina provided by nonresidents are subject to a 25% tax rate, except for digital services, which are subject to an 8% rate.

Alejandra Sarni
Alberto Fabián Mastandrea
BDO in Argentina