🎧 Listen to This Article
Argentina’s Federal Tax Authority extends the suspension of VAT and income tax advance payments for certain imports, potentially affecting business credit balances.
In Brief
On December 30, 2024, the General Resolution 5624/2024 (“Resolution”) was published by Argentina’s Federal Tax Authority (FTA), announcing an extension of the suspension of exclusion certificates for VAT and income tax advance payments on the importation of certain goods. This extension will remain in effect until June 30, 2025.
Key Provisions of the Resolution
The Resolution provides clarity on the continuation of temporary measures impacting businesses importing goods into Argentina:
- Suspension of Exclusion Certificates: Importers of specific goods will not be eligible for VAT and income tax advance payment exclusion certificates. This means importers must continue to pay VAT and income tax on their imports through the first half of 2025.
- VAT and Income Tax Advances:
- VAT advance payments, while mandatory, can be fully credited by importers without any restrictions during this period.
- Income tax advance payments will not be deductible when calculating monthly income tax payments due annually.
- Exemptions: Certain groups are excluded from these regulations:
- Micro and small companies with a valid “MiPyME” certificate.
- Imports on behalf of the National State.
- Imports exempt from national taxes under Law No. 27701.
Impact on Importers
The FTA’s decision may have significant financial implications for businesses involved in the importation of goods, especially those that typically rely on VAT and income tax advance payment exemptions. The suspension of these certificates effectively increases the upfront tax burden on these entities.
Potential for Increased Tax Credit Balances: Importers may find themselves with larger VAT and income tax credit balances due to the inability to apply exclusion certificates. However, businesses could also face liquidity challenges as they need to manage these taxes in the short term.
Taxation Overview on Imports in Argentina
Argentina’s tax system on imports is characterized by several layers of duty and taxes, including:
- Import Duty: Ranges from 0% to 35% based on the CIF (Cost, Insurance, and Freight) value of the goods.
- Statistics Fee: A 3% fee based on the customs value of goods, capped at USD 150,000.
- VAT: Calculated on the total of CIF value, duties, and statistics fee, with rates of 21% or 10.5%, depending on the type of goods.
- Income Tax Advance Payment: Generally between 6% and 11% of the CIF value.
- Gross Receipts Tax: An additional tax based on the CIF value.
These charges make up the full financial burden when importing goods into Argentina. The suspension of the exclusion certificates for VAT and income tax advances will affect businesses’ ability to offset these taxes against their regular tax liabilities.
VAT Implications
The VAT system in Argentina allows businesses to offset VAT paid on imports against VAT collected from local customers. However, the current suspension means that businesses will no longer be able to use VAT exemption certificates to reduce their import taxes. Despite this, the VAT paid on imports will still be fully creditable, which may help alleviate some of the financial pressure on importers.
Income Tax Implications
The suspension of income tax exemption certificates will mean that businesses importing goods will have to continue making income tax advance payments without the ability to deduct these payments from their monthly tax calculations. This could lead to an increased burden on businesses throughout 2025, particularly those with high import volumes.
For further details, clarification, contributions, or any concerns regarding this article, please contact us at [email protected]. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries
