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On July 18, 2019, Resolution No. 598/2019 (the “Resolution”) issued by the Federal Secretary of Treasury, was published in the Official Gazette, introducing a series of amendments to current regulations on compensatory and punitive interest rates, which are levied by the Federal Administration of Public Revenue (“AFIP”, for its acronym in Spanish) on obligations to be collected and paid by AFIP as from August 1, 2019.

1. Interest on tax obligations assessed in Argentine pesos.

(a) Compensation interest: the current effective monthly rate is maintained, amounting to 1.2 times the nominal annual rate for fixed-term deposits in pesos for 180 days of the Argentine National Bank, effective on the 20th day of the month immediately preceding the beginning of the quarter.

(b) Punitive interests: the current effective monthly rate is maintained, amounting to 1.5 times the annual nominal rate for fixed-term deposits in pesos for 180 days of the Argentine National Bank, effective on the 20th day of the month immediately preceding the beginning of the quarter.

(c) Interest for tax reimbursement procedures: AFIP will pay an interest equivalent to the average passive rate published by the Argentine Central Bank. The previous regime, applied a rate of 0.5% per month.

2. Interest on tax obligations assessed in US dollars.

It should be noted that in customs matters, this interest rate will be applied by AFIP to debts of import/export duties and taxes that are assessed in US dollars (pursuant to Section 20 of Law No. 23.905).

(a) Compensation interest: the applicable rate will be 0.83% per month; which implies a reduction compared to the current rate of 4.73% per month.

(b) Punitive interests: the applicable rate will be 1% per month; which again implies a reduction compared to the current rate that amounts to 5.76% per month.

(c) Interest for tax reimbursement proceedings: the applicable rate will be 0.20% per month; the previous regime established the interest rate at 0.50% per month.

The rates set forth in the Resolution for the obligations in US dollars imply a substantial reduction in relation to the rates that were in force (which were the rates that AFIP applied for the obligations in pesos). This circumstance had been the object of claims, on the ground that it remarkably exceeded the reasonable expectation of conservation of value (case "Procesadora de Boratos Argentinos S.A." - TFN 28.192-A).

In accordance with the provisions of Tax Procedural Law No. 11,683 (Article 179) and Customs Code Law No. 22,415 (Articles 811 and 838), the interest for tax reimbursement proceedings will be accrued as of the filing date of the request, provided that the taxpayer has complied with the corresponding legal requirements.

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