New Regularization Plan Of Social Security Contributions - Tax Amnesty Law
On July 23, 2016 the Tax Amnesty Programme set forth in law 27,260 which establishes a voluntary and exceptional regime for the disclosure of unreported national and foreign currency and assets located within Argentina and abroad (hereinafter, the "Plan"), entered into effect.
The Plan provides for a series of tax benefits addressed to those who, prior to March 31st, 2017, commit to the regularization of their situation with the Treasury through the disclosure and reporting of the assets which are outside of the Federal Tax Authority's (AFIP) orbit.
Additionally, the Plan foresees the regularization of social security obligations. This report places its focus on the benefits -under the terms of the Plan - brought about by the regularization of omitted social security contributions by companies acting as employers.
The Plan is applicable to taxpayers and duty-bearers responsible for social security contributions, whose collection and/or oversight is in charge of - and lies with - the AFIP.
The term to take advantage of the benefits outlined by the Plan began last August 1st, 2016, and shall expire on March 31st, 2017.
III. Obligations covered by the Plan
The Plan beneficiaries may ascribe to it with regard to social security contributions that were due as of March 31st, 2016. They may also ascribe to the Plan for offences committed and derived from such contributions.
Also included within, and covered by, the terms of the Plan are those social security obligations in the process of administrative discussion, or which were subject to an administrative or judicial proceeding as of July 22, 2016, date on which the Plan was published in the Official Gazette. To do so, the defendant must acquiesce to the complaint in relation to the regularized obligations, and desist from any action and right against the AFIP.
Social Security contributions intended for healthcare and medical insurance, as well as those directed to the occupational risks insurers are excluded from the Plan.
V. Criminal-Tax Regime
Failing to comply with tax and social security obligations may give rise, in addition to fines and economic sanctions, to the prison sentences that t law 24,769 sets forth for different scenarios.
Enrolling in the Plan determines the suspension of the criminal-tax proceedings under way and the interruption of the criminal statute of limitations, provided that these proceedings have not received a final and binding judgment.
Similarly, the full payment of the debt derived from social security obligations shall cause the termination of the criminal action, provided that there is no final and binding judgment as of the date on which the debt has been cancelled.
VI. Benefits - Effects
In addition to the benefits arising from the suspension and/or interruption of the criminal action, and subject to the full payment of the debt derived from the social security obligations, as detailed in the upcoming section, those who ascribe to the Plan shall enjoy the exemption and/or remission:
(i) Of the fines and penalties applicable under the respective sanctioning regimes, which are not final and binding as of the date of ascription to the Plan; and
(ii) Of the compensatory and / or punitive interests, with significant cut-offs in accordance to the fiscal period on which the breach was committed.
The benefit of fine-remission shall operate once the corresponding formal obligation has been complied with. Compliance of such obligation must take place before the term to ascribe to the Plan expires.
Sanctions derived from any offence committed prior to March 31st, 2016 which, because of their nature, do not permit their subsequent compliance, shall be written-off ex officio.
Fines and other penalties corresponding to substantial obligations accrued as of May 31st, 2016, shall also be written-off provided that they are not final and binding as of July 22nd, 2016 (date on which the Plan entered in full force and effect) and that the main obligation has been cancelled by said date.
The remission of fines and sanctions also determines, as may correspond, the de-registration of the taxpayer from the Public Registry of Employers with Employment Sanctions (REPSAL).
The benefits described in the preceding section shall only materialize in the event that those who ascribe to the Plan comply with, in relation to the capital, final and binding fines and interests not written-off, some of the conditions mentioned below:
(i) Cancellation by payment in cash, with a reduction of 15% of the consolidated debt;
(ii) Full cancellation through one of the payment plans that the AFIP may institute.
Payment plans may be cancelled in advance, pursuant to the terms set forth by the AFIP to such effect.