New rules for eligible investments and tax compliance.
New rules for eligible investments and tax compliance.
On July 18, 2024, the National Securities Commission (Comisión Nacional de Valores or “CNV” for its Spanish acronym) issued General Resolution No. 1010 (the “Resolution”), which regulates the “Amnesty Regime” established by Title II of Law No. 27,743 (the “Palliative and Relevant Fiscal Measures Law”).
The Resolution was issued within the framework of the eligible financial instruments established by Resolution of the Ministry of Economy No. 590/2024 to invest the funds reported under the amnesty regime provided by the Palliative and Relevant Fiscal Measures Law. Pursuant to the provisions of such regulation, the funds reported under the terms of the Palliative and Relevant Fiscal Measures may be used for the subscription or acquisition of (the “Eligible Investments”) 1:
(i) government securities – bonds, bills and other securities – issued by the National, Provincial, Municipal and/or the Autonomous City of Buenos Aires governments;
(ii) certificates of participation or debt securities of trusts whose purpose is to promote productive investment, being understood as such those vehicles destined, in the Argentine Republic, to the investment and/or direct or indirect financing of productive, real estate and/or infrastructure projects, as well as to the financing of Micro, Small and Medium Enterprises, provided that such instruments are placed by public offering with the authorization of the CNV;
(iii) shares of mutual funds, provided that they have been placed by public offering with the authorization of the CNV;
(iv) shares placed by public offering with the authorization of the CNV; and
(v) notes (“obligaciones negociables”) placed by public offering with the authorization of the CNV.
In line with the provisions of the regulations on Eligible Investments established by the Ministry of Economy, the Resolution sets: (i) the rules for the opening and operation of special accounts for transactions arranged under the amnesty regime; (ii) certain requirements applicable to some of the Eligible Investments contemplated by the Ministry of Economy’s Resolution No. 590/2024; and (iii) the extension of tax obligations under the amnesty regime to virtual asset service providers (“PSAVs”).
1. Accounts and subaccounts for special asset accruals and deferrals
Pursuant to the provisions of the Resolution, the broker agents (Agentes de Liquidación y Compesación or “ALyC”) must open special subaccounts called “Special Settlement Accounts for the Reporting of Assets” before the Central Depository Agent of Negotiable Securities (Agente Depositario Central de Valores Negociables, Caja de Valores S.A.), exclusively in the name of the parties subject to Sections 18 and 19 of the Palliative and Relevant Fiscal Measures Law 2, with the same ownership or co-ownership as that duly declared in Sections 18 and 19 of the Palliative and Relevant Fiscal Measures Law), exclusively in the name of the parties covered by Sections 18 and 19 of the Palliative and Relevant Fiscal Measures, with identical ownership or co-ownership to that duly declared in the bank accounts called “Special Account for the Reporting of Assets” opened in financial institutions 3.
For such purposes, the ALyC must require from its customers the prior presentation of supporting documentation that allows verifying balances and ownership/co-ownership data of the aforementioned bank account. According to the Resolution, the ALyC must guarantee the continuous traceability of the origin and destination of the funds credited and debited.
Likewise, the ALyC must proceed to open at least one bank account of its ownership called “Special Account for the Reporting of Asset”, exclusively for the arrangement and settlement of transactions under the amnesty regime, and with funds coming from the mentioned “Special Account for the Reporting of Asset” opened by its clients in the referred financial entities.
2. Benefits
If the funds reported under the Palliative and Relevant Fiscal Measures Law are transferred to any other account (other than the special accounts detailed in the preceding section) before December 31, 2025, a withholding tax equal to five percent (5%) of the transferred shall apply, except, among others, if the transfer is destined to certain Eligible Investments, such as:
(i) the acquisition of certificates of participation or debt securities of productive investment trusts, provided that the investment remains under the ownership of the taxpayer until December 31, 2025; and
(ii) the subscription or acquisition of shares of mutual funds held by the taxpayer until December 31, 2025.
3. Requisites applicable to the transactions processed through the special account
Secondary trading transactions of Eligible Investments shall comply with the following requirements:
(i) be made in segments of concurrence of offers with price-time priority (PPT segment);
(ii) be settled within 10 business days, counted as from the date of crediting the funds (the “Relevant Period”), coming from the “Special Account for the Reporting of Assets” owned/co-owned by the client ordering them, in the Special Account for the Reporting of Assets owned by the ALyC;
(iii) at the end of the Relevant Period, the funds not invested or reinvested (as the case may be) in Eligible Investments shall be transferred and credited by the ALyCs in the bank account called “Special Account for the Reporting of Assets” owned/co-owned by the respective client; and
(iv) in the special subaccounts called “Special Settlement Account for the Reporting of Assets” the totality of the settlements in concept of credits and/or results derived from the operations with Eligible Investments shall be recorded and registered 4.
4. Requirements applicable to certain Eligible Investments
The resolution provides that funds derived from asset regularization may be applied to the subscription of open and/or closed-end mutual fund units. It also establishes special classes of units for this purpose and specifies the procedure for obtaining approval from the CNV, as well as the requisite conditions.
Regarding the possibility of subscribing trust securities and/or certificates of participation under the regularization regime, the Resolution establishes that all those existing financial trusts or those to be created in the future, which are identified with the special regimes on the matter, among them, the following, will be included:
(i) financial trusts for SME financing;
(ii) real estate financial trusts;
(iii) infrastructure financial trusts;
(iv) financial trusts for the Promotion of Productive Development and Regional Economies; and
(v) all other trusts which, without being included in a special regime, comply with the requirements set forth in Section 1(b) of Resolution No. 590/2024 of the Ministry of Economy 5.
5. Virtual asset service providers
Finally, since cryptocurrencies, cryptoassets and other virtual assets were admitted as object of the regularization regime, the Resolution establishes that PSAVs registered in the PSAV Registry that carry out the activity of custody and/or administration of virtual assets must comply with the regulations issued by the AFIP for such purpose.
1 Section 3 of Resolution No. 590/2024 of the Ministry of Economy establishes that the reported assets may also be invested in direct and indirect investments in real estate projects started as from the entry into force of Title II of the Law of Palliative and Relevant Fiscal Measures, including those that have a degree of progress of less than fifty percent (50%) of the completion of the work at that time, which must be accredited taking into account the information submitted to the competent building authorities and/or by means of an opinion of a licensed professional competent in the matter, considering the real estate project declared up to the entry into force of such title, which must include the constructions, expansions, installations, among other works, that have been carried out as of that date. The regulation establishes that “investments in real estate projects, either directly or through third parties, are understood as those that, as follows, are made, for example, through the execution of a purchase and sale agreement or other similar commitment, or the granting of the title deed, or contributions to trusts established under the terms of the Civil and Commercial Code or the subscription, in the primary market, of shares of Mutual Investment Funds included in Law No. 24.083 and its amendments and/or certificates of participation or debt securities of financial trusts, authorized by the National Securities Commission, whose purpose is the financing of construction and real estate developments”. The referred rule also establishes that in order to verify that the reported funds are effectively applied from the Special Account for the Reporting of Assets to the developer or vehicle that carries out the real estate project, the AFIP will be in charge of implementing a registry where the mentioned developer must inform the type of work or project to be carried out, the approval of the work permit, its degree of progress and any other information that such agency deems pertinent.
2 The taxpayers covered are individuals, undivided estates and individuals included in section 53 of the Income Tax Law and individuals who had been tax residents in Argentina before December 31, 2023 and who, as of such date, had lost such status in accordance with the Income Tax Law.
3 The “Special Account for the Reporting of Assets” opened in financial entities created within the framework of the provisions of the Law of Palliative and Relevant Fiscal Measures are regulated by Communication “A” 8062 of the Argentine Central Bank. Pursuant to the Law of Palliative and Relevant Fiscal Measures, the ALyCs that open such subaccounts have the same obligations as financial entities with respect to the Special Account for the Reporting of Assets. In this sense, they must act as withholding agents of the special regularization tax provided by the abovementioned law.
4 The last paragraph of Section 2 of the Resolution clarifies that: “[t]he marketable securities acquired pursuant to subsections (a) [primary subscription] and (b) of Section 1 of this Section [secondary trading], shall be credited to the special principal sub-account/s denominated ‘Special Settlement Account for the Reporting of Assets’ opened for such purpose before the ADCVN [Caja de Valores]. Likewise, such marketable securities may be subject to mere issuer transfers only to others of the aforementioned special principal sub-account/s with different ownership and/or co-ownership”.
5 In other words, they must be for the promotion of productive investment and have been placed through public offerings with CNV authorization.
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