Covid-19: Latin America Overview | Tax

Among the main tax legislative changes set forth during the Public Health Emergency framework, we can mention the following developments:

Postponement of payments for SMEs:

The Decree of Necessity and Urgency N°316/2020 and General Resolution N°4690 of the Federal Administration Of Public Revenue (AFIP, by its Spanish acronym), introduced amendments to the AFIP General Resolution N°4667, which regulated the tax, customs and social security moratorium for single-tax payers, self-employed workers and other micro and SME taxpayers, and for non-profit associations established under Law 27,541. Thereby, the provisions extended until June 30th: (i) the obtaining of the “SMEs certificate” to adhere to the tax moratorium and to make effective the benefit of remission of interests and fines; (ii) the request by taxpayers to adhere to the regime; (iii) the rejection of the requests for compensation made for the lack of obtaining the «SMEs certificate»; (iv) the request for preventive contest for the access to the regime, among other requirements. Furthermore, the types of plans to be subscribed to by the taxpayers were modified and the first expiry date was set at 16 July 2020.

Personal Asset Tax. Repatriation:

Besides, through Decree 330/2020, the date set for the repatriation of assets was extended until April 30 as regards fiscal period 2019. Exempt from the payment of Personal Assets Tax are those who have affected any of the destinations provided for the repatriated goods, the funds and results, derived from investments obtained before December 31 of the calendar year in which the repatriation was verified. In this sense, the AFIP General Resolution N°4691 extended until May 6 the obligation to pay the Personal Assets Tax on account for those taxpayers who own assets located abroad and have not repatriated at least 5% of such assets as of April 30.

Emergency Assistance Program for Work and Production (PWP):

Finally, the Decree of Necessity and Urgency N°332/2020 created the Emergency Assistance Program to Work and Production (PWP) for employers and workers affected by the health emergency. On April 20, the Decree of Necessity and Urgency N°376/2020 introduced certain provisions aimed at mitigating the impact of the health measures derived from the social isolation on production processes, the development of independent activities and employment.

The Executive Power settle the following benefits:

  1. Postponement or reduction of up to 95% of the payment of employer contributions.
  2. Assignment of a complementary salary to be paid by the National State for workers in a salaried employment relationship on the private sector.
    The amount of the allowance shall be equivalent to 50% of the worker’s net salary for the month of February 2020, and may not be less than an amount equivalent to one minimum wage, nor exceed two minimum wages, or the total net salary for that month.
  3. Zero rate credit for persons adhering to the Simplified Scheme for Small Taxpayers and for self-employed workers, with a subsidy of 100% of the total financial cost. This credit consists of a financing to be credited on the beneficiary’s credit card.
  4. Economic benefit for unemployment.

On the other hand, the Decree eliminates certain requirements to be met by the employer to access the benefit detailed in paragraph a. above, which consisted of (i) to have a total number of workers in a salaried employment relationship, as of February 29, 2020, not exceeding 60, and (ii) in case of exceeding such amount, to promote the Preventive Procedure of Business Crisis provided for in Law No. 24,013.

Finally, the Decree is applicable to the economic results occurring as from March 12, 2020, and the Executive Power may extend the benefits provided for in the Decree, depending on the evolution of the economic situation, until June 30, 2020, inclusive, and, for the activities still affected by the social distancing measures, even if the social isolation has concluded, the benefits may be extended until October 2020.