A General Resolution that applies in Argentina as from 2 September 2024 reduces the tax rate on the purchase of foreign currency (i.e., PAÍS tax) from 17.5% to 7.5% for certain transactions to help stabilise market prices. Specifically, the rate reduction applies to payments made for freight and other transportation services rendered by nonresidents related to the import and export of goods, or their acquisition within Argentina, and to the import of certain goods included in the Mercosur Common Schedule. The government had increased the PAÍS tax from 7.5% to 17.5% in December 2023 (for prior coverage, see the article in the January 2024 issue of Indirect Tax News).
The PAÍS tax, introduced in 2019 for a five-year period, applies, inter alia, to the purchase of foreign currency by Argentine financial entities on behalf of, and to the order of, local acquirers or borrowers to pay for imported goods and services. The PAIS 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. Taxable persons for purposes of the PAÍS tax are Argentine-resident legal entities and individuals, although the financial institutions and entities that collect the payments for the goods and/or services are the collection agents.
In addition to the tax rate reduction, the General Resolution also reduces the advance payment of PAÍS tax for the same transactions and in the case of a definitive import of goods that were previously imported under a temporary declaration, the Argentine tax authorities will now collect 100% of the PAÍS at the time the request for the definitive import declaration is registered.
It should be noted that these changes likely presage the termination of the PAÍS tax on 31 December 2024 and the tax authorities have informally confirmed that the tax will not be extended.
Alejandra Sarni
BDO in Argentina