Argentina: Taxation of capital gains of non-residents | KPMG | GLOBAL

Argentina: Rules for taxation of capital gains of non-residents, suspended

Argentina: Taxation of capital gains of non-residents

Argentina has suspended application of rules concerning the taxation of capital gains of non-resident persons.

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General Resolution No. 4094-E/2017 (18 July 2017)—the Taxing Resolution—establishes a mechanism for remitting the tax on capital gains realized by non-residents for all transactions completed on and after 23 September 2013.

Two days later, General Resolution No. 4095-E/2017 (20 July 2017)—the Suspension Resolution—was issued to suspend for 180 days, application of the Taxing Resolution. Government officials also confirmed at a press conference that the Taxing Resolution was suspended pending an assessment of its potential impact. 

KPMG observation

Non-residents that have purchased or sold interests in Argentine entities (e.g., shares, units of interest, bonds, and other securities) after September 2013 or that are planning similar transactions need to consider and evaluate the implications of the Taxing Resolution because a similar or revised version may become effective in March 2018, following the lapse of the 180-day suspension period.

Overview of tax rules

As part of the September 2013 tax reform, capital gains realized from the direct disposal of Argentine shares, units of interest, bonds, or securities derived by non-residents are subject to withholding tax. At the election of the seller, the gains are taxable either at an effective rate of 13.5% of the gross amount of the sales price, or at a rate of 15% of the net gain. The law imposes on the buyer an obligation to assess and remit the tax to the tax authorities. 

The Taxing Resolution (July 2017) provides rules regarding documenting of the determination and payment of the withholding tax, and states that when the acquirer/purchaser of securities is an Argentine resident, the following individuals/entities act as withholding agents:

  • In instances of transactions conducted on certain authorized stock exchanges or securities markets—the settlement and clearing agent performing the transaction on behalf of the foreign resident selling such securities
  • In instances of transactions that are not conducted in any authorized stock exchanges or securities markets—the party acquiring the securities

Additionally, when the party acquiring the securities is a foreign resident, that foreign resident is responsible for paying the related tax.

For purposes of computing the 15% tax on net gain, the Taxing Resolution requires the seller to provide the buyer with documentation substantiating the information that is necessary for the withholding agent to determine the amount of the required tax. The Taxing Resolution also requires that a receipt showing payment of the capital gains tax must be remitted to the Argentine public registry upon registration of the transfer of the shares. 

 

For more information, contact a tax professional with KPMG’s Latin America Markets Tax practice or with the KPMG member firm in Argentina:

Devon M. Bodoh | +1 (202) 533-5681 | dbodoh@kpmg.com

Alfonso A-Pallete | +1 (305) 913 2789 | apallette@kpmg.com

Rodolfo Canese | + (5411) 4316-5753 | rcanese@kpmg.com.ar 

Violeta Lagos | + (5411) 4316-5740 | vlagos@kpmg.com.ar

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