A one-off solidarity, extraordinary contribution levied on the assets of individuals
On the 4 December 2020, Law N° 27.605 was enacted “Solidarity and Extraordinary Contribution to mitigate the effects of the pandemic”, taking effect from 18 December.
The most relevant aspects of the law are the following:
1. It is a one-off due to the emergency nature of the situation.
2. It is a wealth tax, levied on both onshore and offshore assets, based on the individuals tax position as of 31 December 2019:
- Resident individuals and undivided estates are subject to tax on worldwide assets.
- Non-resident individuals and undivided estates shall be subject to tax on Argentinian assets.
- National Argentine individuals resident or domiciled in non-cooperative jurisdictions or with low or no taxation shall be subject to tax on worldwide assets.
The tax will be applied to the total assets existing as of 18 December 2020, only if such assets exceeds USD 200,000,000. Once said amount is exceeded, the tax will be levied on all the assets.
3. The assets have to be valued according to the net wealth tax regulations.
4. Incremental rates are established depending on the total assets and the location. The range of the rates for assets in Aregentina is from 2.00% to 3.50% and for assets abroad from 3.00% to 5.25%.
5. It is possible to tax overseas assets at the corresponding Argentinian rates if the subject “repatriates” to Argentina, within 60 days from the implementation of the law (18 December 2020), at least 30% of the total financial assets located abroad. Once the “repatriation” has been made, the repatriated funds have to remain deposited in an account opened under the name of the holder or the affected subject until 31 December 2021.
As of today the regulations to determine deadlines, payment methods, tax return submissions and other aspects related to the collection of this contribution are still pending.
Alberto Fabián Mastandrea
Guillermo Jaime Poch