Argentina Approves Tax Reform Legislation, Implements Various Trade-Related Provisions
19 January 2018
The Argentinean Congress approved a comprehensive tax reform bill on 27 December 2017 that is expected to reduce by 1.5 percentage points by 2022 Argentina’s tax burden as a share of its gross domestic product. According to a Bloomberg article, the legislation will lower the corporate tax rate from 35 percent to 25 percent over a five-year period. It will also tax financial investment profits through a 15 percent tax for foreign currency-denominated and inflation-linked instruments as well as a five percent tax for peso-denominated debt. According to the article, non-residents are exempt from taxes except in the case of profits from Lebacs notes.
In other news of potential interest, Argentina recently issued two decrees implementing a number of trade-related provisions, some of which had already been adopted previously and are simply being confirmed. These provisions include, among others:
- new versions of the Mercosur tariff schedule and the national list of exceptions to the common external tariff;
- an updated list of capital goods and information technology/telecommunications goods benefiting from duty-free or reduced duty treatment;
- the continued application of higher (35 percent) import duties on toys classified under NCM 9503.00.10, 9503.00.21, 9503.00.22, 9503.00.31, 9503.00.39, 9503.00.40, 9503.00.50, 9503.00.60, 9503.00.70, 9503.00.80, 9503.00.91, 9503.00.97, 9503.00.98 and 9503.00.99;
- the continued application of the tariff-rate quota on up to 6,000 units of electric, hybrid and hydrogen motor vehicles classified under NCM 8703.21.00, 8703.22.10, 8703.22.90, 8703.23.10, 8703.23.90, 8703.24.10, 8703.24.90, 8703.31.10, 8703.31.90, 8703.32.10, 8703.32.90, 8703.33.10, 8703.33.90, 8703.90.00, 8704.21.90, 8704.31.90 and 8704.90.00;
- the continued application of duty-free treatment on a range of products for renewable energy projects;
- the continuation of the special import regime for used goods for the hydrocarbon sector aimed at encouraging the adoption of new technologies and management modalities that may contribute to the development and promotion of this sector;
- the continued application of export taxes on certain products; and
- a ratification of an earlier decision to lower by 0.5 percent per month from January 2018 through December 2019 the export tax on certain soybeans and soybean products.
Separately, Argentina has modified the regulations governing postal shipments in an effort to further improve the efficiency of the customs clearance process. Notably, postal shipments with a value no higher than US$25 may now be delivered to the addressee without the need to complete a sworn declaration. Lastly, Argentina has extended through the end of this year a decision not to apply the 12 percent excise duty on domestically-produced and imported champagne.
- Central & South America