Argentina: New Voluntary Disclosure Program

Law 27743 (Palliative and Relevant Fiscal Measures Law), published on July 8, 2024, contemplates a new Assets Regularization Regime or voluntary disclosure program (“the Program”).

The Program allows individuals, undivided estates, and entities that reside in Argentina to regularize the possession of money, real estate, shares, and cryptocurrencies, among other assets, located in Argentina or abroad.

The deadline to join the Program is April 30, 2025, but the Executive Branch may extend it until July 31, 2025.

If the value of the disclosed assets does not exceed U$D100,000, no special regularization tax will be paid. Above that amount, a special tax applies with a progressive scale (ranging from 5% to 15%), conditioned upon the time in which a taxpayer enters the Program (counted as from the entry into force of the complementary regulations to be issued under the Program):

(i) A tax rate of 5% applies to those who enter the Program between the date of entry into force of the regulations and September 30, 2024.

(ii)??????? A tax rate of 10% applies to those who enter the Program between October 1, 2024, and December 31, 2024; and

(iii) Finally, a 15% tax rate applies to those who enter the Program between January 1, 2025, and March 31, 2025.

Holdings of currency or securities abroad that, as of December 31, 2023, (i) were deposited in financial entities or custody agents based or located in jurisdictions or countries identified by the Financial Action Task Force (FATF) as High Risk (“Black List”) or Under Intensified Monitoring (“Grey List”) or (ii) that, being in cash, were physically located in jurisdictions or countries identified by the Financial Action Task Force (FATF) as High Risk (“Black List”) or Under Intensified Monitoring (“Gray List") may not be disclosed under the Program.

An advance payment must be made as from the date of the application to the Program, which may not be less than 75% of the special tax. The advance payment is not to be applicable when the assets to be disclosed do not exceed U$S 100,000.

Cash (in Argentina or abroad) and the profit from the sale, settlement, or redemption of securities deposited in foreign accounts, which are deposited and/or transferred to a Special Account for the Regularization of Assets opened with an Argentine bank, will be excluded from the calculation basis. At the time of the deposit or transfer of the regularized amount to the Special Account for the Regularization of Assets, the special tax will not be paid, nor will it be paid, while the funds remain deposited in those accounts until December 31, 2025. During the term in which the funds are deposited in the Special Account for Regularization of Assets, they are to be exclusively invested in financial instruments to be singled out by the regulations. When the funds are transferred to another account for any reason before December 31, 2025, a withholding of five percent (5%) on the amount transferred will apply. No withholding will apply if the funds are transferred to the Argentine tax authorities (AFIP) before December 31, 2025.

Qualifying taxpayers who adhere to the Program enjoy, among others, the following benefits in connection with the disclosed assets: (i) release from the "unjustified increase in assets rule" (ingresos patrimoniales no justificados) as defined in and ruled by Law 11,683, as amended, (ii) release of the taxpayers and their jointly and severally liable parties from any civil and criminal action and for tax, exchange, customs and administrative offenses that would have been applicable due to the non-compliance with the obligations related to the origin of the disclosed goods, and, (iii) release from the payment of taxes that they had omitted to pay and that had origin in the disclosed assets such as income tax and undocumented outflows, transfer of real estate, VAT, personal assets tax, solidarity and extraordinary contribution, excise taxes, and tax on debits and credits in bank accounts.

Public officials, their family members, and those convicted of crimes are among those excluded from the program.

The provinces are invited to adhere to this Program and adopt similar measures to exempt from provincial taxes those disclosing assets under it.

?

?