Executive Order No. 1201/2018 was published today in the Official Gazette providing general guidelines for the collection and payment of duties levied upon the exportation of services. The introduction of export duties on services -an unprecedented tax in Argentina- was part of a series of measures announced by the federal administration in 2018 to reduce Argentina’s fiscal deficit.
Please find below the main aspects of the regulation:
- A service is considered exported when it meets the following requirements: (a) it was rendered from Argentina, (b) for a specific price - free-of-charge services are not included, (c) the services provider is not an employee of the beneficiary; and (d) whose effective use or exploitation is carried out abroad - meaning that the immediate use or first act of disposition from the beneficiary is performed overseas.
- Both individuals and entities will be considered exporters. However as long as they do not export physical goods, no registration as exporter-of-record will be required.
- An ad valorem 12% export duty will be levied upon any exported service with a cap of AR$ 4 per each USD exported. Such duties will be in force as from today and up until 31 December 2020.
- The 12% rate will be assessed taking into consideration the value of the service arising from the commercial invoice issued by the provider. Price adjustments, discounts or similar should be considered for the assessment of the duties as long as enough supporting documentation is filed.
- Export duties shall be paid within the first fifteen working-days of the month following the invoicing. For such purpose, service exporters must file an affidavit with the Federal Tax Authority (“FTA”). Should the affidavit not be filed on time or contain questionable information, FTA may assess the fiscal debt on its own. The specifics of such affidavit is pending further regulation.
- A 45 calendar-day waiting period -with no interest- will be granted to those exporters whose overall invoicing for exported services in the previous year did not exceed the amount of USD 2,000,000.
- Services exported by small and medium businesses (Law 24,467) will begin to pay export duties to the extent that they exceed USD 600,000 of annual invoicing for exported services.