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Covid-19

Taxes and Customs Regulations in times of Global Pandemic – V1. UPDATED 4/16/2020

Background

In the framework of the implemented Decree of the National Executive Power No. 297/20, which established the so-called “Social, preventive and compulsory isolation”, and of its amending and complementary regulations, the Federal Administration of Public Revenue (“Administración Federal de Ingresos Públicos”, hereinafter, “AFIP”, as per its Spanish acronym) has issued different regulations on tax and customs matters, whose impact we analyze below:

1. The essential activities and services according to AFIP

The AFIP, through Provision No. 80/20, has established that the control and fiscalization actions related to resources collection in customs, taxes and social security matters, as well as the actions of control and fiscalization of people, goods and means of transport in the field of foreign trade, must be considered essential activities and services in the context of the current emergency.

The measure, thus, seeks to guarantee the compliance of the essential control and fiscalization functions assigned to the AFIP, as the entity in charge of executing the Nation’s tax and customs policy, guidelines which will be exercised through the Tax Administration  (“Dirección General Impositiva”, hereinafter, “DGI”, as per its Spanish acronym) and the Customs Administration (hereinafter, “DGA”, as per its Spanish acronym), within the framework of their respective competences, affecting to this end the minimum and indispensable personnel required.

2. Foreign trade transactions: Which of them are allowed and which are not?

As a consequence of the enactment of Decree No. 297/20 and Disposition No. 80/20, the DGA has established, through General Instruction No. 2/20, which are the import and export transactions that may be carried out during the social, preventive and compulsory isolation.

In this regard, it has been established that the customs officers will attend as a priority those transactions and/or import or export destinations related to the activities and services declared essential by Decree No. 297/2020, as amended by Administrative Decision No. 429/20, which expanded the list of activities and services considered essential.

Therefore, the essential activities and services to which customs transactions and/or destinations could be related, according to the statement sent by AFIP to the Center for Customs Brokers of the Argentine Republic, are, among others, the following[1]:

  1. Health activity, security forces, armed forces, migratory activity, national meteorological service, firefighters and air traffic control[2].
  2. Audiovisual, radio and graphic communication services[2].
  3. Public works.
  4. Wholesale and retail supermarkets and proximity retail stores.
  5. Industries that integrate the value chain and supplies of the productive sectors of food and beverages, personal hygiene and cleaning, medical equipment, medicines, vaccines and other sanitary supplies.
  6. Activities related to agricultural, livestock and fishing production, distribution and commercialization[2][3]
  7. Telecommunication services, fixed and mobile internet and digital services activities[2].
  8. Maintenance of basic services, such as water, electricity, gas, communications, etc., and emergency attention services[2].
  9. Public passenger transportation services, transportation of goods, oil, fuels and LPG[2][3].
  10. Postal and packages distribution services[2][3].
  11. Operation and maintenance of Oil and Gas Fields, oil and gas treatment and / or refining plants, transportation and distribution of electrical energy, liquid fuels, oil and gas, fuel dispensing stations and electric power generators.
  12. Activities of S.E. Bureau of Engraving and Printing, ATM services, transportation of money flows and all those activities that the Central Bank of the Argentine Republic consider indispensable to guarantee the proper functioning of the payment system[2].
  13. Industries that carry out continuous processes whose interruption would involve structural damage to production lines and/or equipment authorized by the Ministry of Industry, Knowledge Economy and External Commercial Management, so as not to discontinue their production.
  14. Production and distribution of biofuels[2][3].
  15. Activities authorized by the National Stock Commission.
  16. Maintenance of activities related to the mining environmental protection.
  17. Tanneries, with a minimum endowment, for the reception of leather originated at the refrigeration activity.

The complete list of essential activities to which customs transactions and/or destinations could be related, according to the terms of General Instruction No. 2/20,  is available for consultation at: http://www.cda.org.ar/pdf_articulos/e931a3798d9162d2cc6e972805594fb3.pdf

In spite of the priority attention of the aforementioned transactions, the DGA has established that the General Subdirectors of the DGA, within the scope of their respective competences, can authorize the consideration of other transactions and/or destinations, both import and export, that due to the nature of the goods or the particularities of the basic commercial transaction, advise their attention as deemed critical or essential.

On the basis of these considerations, it will be at the discretion of each competent area of ​​the DGA to determine whether or not to authorize the customs transaction whose attention the importer or exporter alleges as critical or essential, circumstances that will be necessary to prove in each particular case.

We understand, therefore, that within the framework of discretion granted by this regulation, the criterion that the competent areas of the DGA will apply will be a restrictive one, since the purpose of the measure seems to be the priority attention of transactions related to the activities and services declared essential in the emergency, as well as the affectation of the minimum and indispensable customs officers in the operational tasks, in order to preserve their health.

We emphasize that the aforementioned regulations will remain valid as long as the health threat and risk addressed in the decrees issued by the National Executive Power subsist, in relation to the spread of COVID-19.

Beyond the two cases mentioned in General Instruction 2/20, we understand that the DGA will not authorize import or export transactions, at least under the current conditions of sanitary emergency.

Through Administrative Decision No. 450/20, the list of activities and services declared essential in the emergency, according to the terms of Decree 297/2020, was extended, including specifically the activities related to foreign trade: exports of finished products and essential imports for the performance of the economy.

Additionally, through complementary regulations of Decree No. 297/20, the list of activities and services declared essential in the emergency has been extended.

The complete list of essential activities will be available for consultation at https://www.nicholsonycano.com.ar/eng/mandatory-precautionary-social-isolation-regime-and-exceptions/

To date, the Customs Administration has not issued a General Instruction similar to General Instruction No. 2/20, contemplating the new activities and services to which the customs transactions and/or destinations could be related and, specially, giving more details on the exports and imports that will be included among the exceptions, according to Administrative Decision No. 450/20. We understand that, under the current circumstances, the criterion to authorize export transactions, and even more import transactions, will be a restrictive one.

3. Export permissions for certain medical and health supplies

In order not to affect the health care of the Argentine population within the framework of the spread of COVID-19, the National Executive Power  established, through Decree No. 317/20, that exports of products such as ethyl and gel alcohol, paracetamol, surgery and disposable gloves, disinfectant detergents for medical equipment and floors, and protective garments used in surgery and medicine, among others, must obtain an export permit before the Ministry of Productive Development, with the intervention of the Ministry of Health.

The complete list of the affected products, with their corresponding tariff positions, may be consulted at: Click here

We emphasize that the measure does not affect exports destined to the Special Customs Area of Tierra del Fuego Island, created by Law No. 19.640, nor to the General Customs Territory, when the export is made from a free trade zone of the country.

The Ministry of Productive Development, through Resolution N° 140/20, has established the procedure to obtain the export permit, which will be valid for a period of 30 days and shall be filed before the DGA before the export.

The measure will remain valid during the period of the health emergency.

4. Exception to the submission, in original, of Preferential Certificates of Origin (“Certificados de Origen Preferenciales”)

In order to satisfy operational requirements in matters of foreign trade in the context of the health emergency due to the spread of COVID-19, the Subsecretary of Commercial Policy and Management of the Ministry of Productive Development, through Note NO-2020-19119901-APN-SSPYGC#MDP, has communicated the DGA its decision to accept, exceptionally, the Certificates of Origin issued within the framework of the Preferential Agreements signed by our country be filed to the customs officers after being transmitted to an argentine importer electronically, either in pdf file, image or other similar format. The submission of Certificates of Origin, in original, will not be required.

This exception will remain in effect until the Subsecretary notifies that it will no longer be applicable, which is estimated not to occur until the health emergency is overcome.

We highlight that the measure has been communicated to the operational and control areas of the DGA by Electronic Mail No. 30/2020 (DI TECN) of the Technical Direction of the DGA dated 03/27/2020.

Additionally, we emphasize that the measure has been made official by the AFIP through Circular No. 2/20, which establishes that: (i) the submission of Preferential Certificates of Origin, in original, will not be required temporarily; (ii) Preferential Certificates of Origin which had been electronically transmitted to the argentine importer will be accepted temporarily; and (iii) the measure will remain valid until -otherwise- it is notified by the Subsecretary of Commercial Policy and Management.

5. The term to access the regularization regime of customs, tax and social security debts established by Law No. 27.541 of Economic Emergency is extended.

In order to ensure that the access to the regularization regime of customs, tax and social security obligations is not affected by COVID-19, and so as to make effective the recovery of the economy pursued by the Economic Emergency Law, the National Executive Power, through Decree No. 316/20, has extended until 06/30/2020 the term to access to the aforementioned regime, which was originally scheduled until 04/30/2020.

Through General Resolution No. 4690/20, the AFIP modified General Resolution No. 4667/20 according to the term extension established by the National Executive Power.

Among the main amendments, the AFIP provided that the Certificate for Small and Medium- Sized Companies (Spanish acronym “MiPymes”) can be obtained until 06/30/2020, and modified accordingly the due date of the plan installments: the first installment will expire on 07/16/2020 and all subsequent installments will expire on the 16th of each month.

AFIP also modified the outline of the advance payments. The applicable formulas will be available at the AFIP website: https://www.afip.gob.ar/moratoria/

6. 0% import duties for certain medical and health supplies, which will also be exempt from statistical tax

In order to guarantee the Argentine population the access to certain critical supplies within the framework of the spread of COVID-19, the National Executive Power, through Decree No. 322/20, has established import duties at a rate of 0% for products such as ethyl and gel alcohol, desinfectant for medical equipment and floors, surgery gloves, disposable hats, surgical masks, ultrasonic scanning apparatus and clinical thermometers, among others.

Additionally, import transactions related to the goods specified in the Decree will be exempt from statistical rate.

The complete list of the affected products, with their corresponding tariff codes, may be consulted at: Click here

Additionally, through General Resolution No. 4696/20, the AFIP has established that the products included in Decree No. 333/20, and/or in its future amending or complementary regulations, will be exempt from the Value Added Tax (VAT) Withholding regime (VAT Withholding Tax), for a period of 60 days.

7. Mining industry: impact of the health emergency on the procedures related to the Mining Investment Law

The Secretary of Mining of the Ministry of Productive Development, through Resolution No. 14/20, has suspended until 04/26/2020 the term within which the Mining Investment Direction has to decide the procedures related to the Mining Investment Law (Law 24,196).

Additionally, the Secretary has extended until 04/26/2020 the suspension of on-site attention for all procedures related to the application of the Mining Investment Law (Law 24,196) carried out before the Mining Investment Direction.

All electronic procedures will remain available at the Remote Procedure Platform (Spanish acronym ‘TAD’) (https://tramitesadistancia.gob.ar)

8. Temporary exception to the submission of the Product Composition Affidavit (“Declaración Jurada de Composición de Productos”, Spanish acronym “DJCP”) for certain medical and health supplies

The Secretary of Domestic Trade, through Resolution No. 107/20, has temporarily excluded certain medical and health supplies from the requirement of submitting the Product Composition Affidavit (“Declaración Jurada de Composición de Productos”, Spanish acronym “DJCP”) (e.g. surgical masks, disposable hats, overalls and other protective garments used in surgery).

The tariff codes included in the Resolution are the following: 6210.10.00, 6307.90.10, 6307.90.90 and 6505.00.22.

The measure will apply from 04/03/2020 and will be applicable for a period of 60 calendar days, which may be extended if necessary.

9. Employment relationship

Through the General Resolution No. 4686/20 the Tax Authorities has extended until 04/30/20 the possibility of employees, among others, to file the SIRADIG F572 Web, through which it is informed to its employers the deductions and moonlighting jobs regarding year 2019. Although it is not mandatory, we encourage as a best practice, that companies communicate their corresponding employees of this extension.

Similarly, the Tax Authorities extended until 05/29/20 the deadline for employers to file the annual tax return for the corresponding year, withholding or paying back any difference at the time that the first following payment is made after that date, and subsequent if necessary, until 06/10/20, inclusive. Likewise, the aforementioned amount must be reported and deposited until the due dates established for the filing of the affidavit and payment of the resulting balance that operate in the month of June 2020 of the SICORE, reporting it in the period of May 2020 and recording as withholding date the 05/29/2020.

10. Online filings to avoid on-site attention at Dependencies.

AFIP, by means of General Resolution N ° 4685/20, enabled an exceptional and mandatory use of electronic filings, until the 06/30/20, through the service called “Digital Presentations” to carry out certain procedures and transactions that used to be perform personally, such as: (i) Certificate of exclusion of VAT withholding – RG No. 2.226, (ii) Certificate of exemption from income tax – RG No. 2.681, (iii) Certificate of free pension debt – Law No. 13,899, (iv) Certificate of release of income tax – RG No. 830, (v) Certificate of VAT recovery, (vi) Certificate of fiscal residence, (vii) Refund of freely available balance amounts – RG No. 2.224 , (viii) Presentation of recursive writings – Art. 74 Decree No. 1.397/79, (ix) Presentation F. 885 – Modification register and discharge of employees – RG No. 2.988, etc.

Although the situations provided by the regulation provide a wide and diverse catalog, in the event that companies must execute any specific procedure not included in the list provided by the AFIP, we suggest contacting the Dependency in which the taxpayer is registered, in order to ask about the possibility of completing that particular procedure remotely.

11. Fiscal benefits for health-related establishments and institutions.

It is through Decree 300/20 that the following benefits applicable to employers belonging to health-related services, establishments and institutions (medical care plans, health insurance, hospital services, ambulatory care, diagnosis and treatment practices, emergencies and transfers, etc.) were established as of 03/21/20 and for a period of 90 days:

  • 95% reduction of the tax rates corresponding to social security contributions, regarding professionals, technicians, auxiliaries and assistants, thus being reduced to a percentage of 1.02% (in the case their total annual sales exceed the limits for being considered as medium-sized company “2ndsection”, that is, AR$ 607.210.000 for the Services area and AR$ 2,146,810,000 for the Commerce area) and 0.9% if these limits are not exceeded.
  • Reduction of Tax on Debits and Credits Bank Accounts to 2.50 ‰ and a decrease of 5 ‰for debits and credits belonging to saving accounts and other operations.

12. Cessation of precautionary measures for Small and Medium Companies (PyMES)

Within the package of the measures taken by the AFIP in order to contemplate the economic situation that the taxpayers are suffering and, especially the circumstances the small and medium-sized companies are going through, the Authorities , by means of General Resolution No. 4684/20, decided to suspend the execution of precautionary measures until 04/30/2020. In this sense, it is relevant to recall that the AFIP had established a special regime of payment installment facilities valid for the settlement of tax obligations and social security resources, overdue until the 08/15/2019 –allowing, additionally, to refinance certain current installment plans-. Furthermore, it had established, in addition, the suspension until the 03/31/2020 of the execution of precautionary measures corresponding to MiPymes as well as those taxpayers that qualify as “Micro, Small and Medium Sized companies – Section I and II”, a term that is currently extended.

13. The term to access the Permanent Payment Plans is extended – My Facilities

In order to support companies to overcome the economic impact of the health emergency, the AFIP, through the General Resolution No. 4683/2020, extended until 06/30/2020 the transitional period corresponding to the amount of admissible payment plans, installments and interest rates of financing pertinent, regarding the permanent payment facilities plan for the regularization of tax obligations, social security and/or customs liabilities that was originally scheduled until 03/31/2020.

14. More measures benefiting small businesses and individuals

In order to ease the burden of the negative impact that the COVID-19 pandemic will have for the small businesses and individuals which are registered as single taxpayers (“monotributistas”), the National Tax Authorities has suspended until 04/01/2020 the exclusions ipso jure, this is, it will not follow the usual systemic controls, which are specifically designed to detect the taxpayers that exceed the established parameters for the different categories of this simplified system. Guided by the exact same spirit, the AFIP has temporarily suspended the discharges due to non-payment, disregarding the register of the month of March for the application of automatic cancellations.

15. Credit and/or debit notes. A new extension.

Due to the current emergency context, the AFIP, through General Resolution No. 4688/2020, has decided to extend -once again- up to 5/01/2020 the date in which the new Credit and/or Debit Note Issuance Regime, implemented by General Resolution No. 4540/2019 is enforceable.

16. The term for the repatriation of assets was extended as well as the advance payment of the personal assets tax

Those taxpayers who have assets abroad and have thought of repatriating a 5% of them to Argentina to enjoy the reduction of the tax rate on personal asset tax, for the fiscal period 2019, will have a deadline to do so until 04/30/2020, as it has been established today by Decree 330/2020.

In accordance to such decision, AFIP – by General Resolution No. 4691/20- has extended the deadline to pay the Personal Assets Tax advance payment until 5/6/2020.

17. Suspension of procedural terms.

The National Supreme Court of Justice, through Decision No. 10/20, has extended again the “Non-judicial activity period” (“feria extraordinaria”) up to 04/26/2020.

The National Tax Court, in turn, by means of Resolution No. 17/20, also extended the “Non-judicial activity period” (“feria extraordinaria”) until 04/26/2020 for all the procedures carried out before such Court. We emphasize that the Tax Court is competent to acknowledge regarding the appeals that taxpayers file both against the DGI and the DGA, in the cases expressly established by Law 11.683 and the Customs Code, respectively.

The AFIP, through General Resolution No. 4695/20, has established a new “Non-judicial activity period” (“feria extraordinaria”) until 04/26/2020 for all procedures currently in progress. This mentioned criterion applies both to the DGI and the DGA.

The complete list of regulations that provide the suspension of judicial and administrative terms is available for consultation at: https://www.nicholsonycano.com.ar/plazos-judiciales-y-administrativos/

18. The City of Buenos Aires tax authorities´ actions to mitigate the consequences of the pandemic:

  • Suspension of procedural terms: the suspension has been extended until 4/27/2020.
  • Payment Facility Plansinstallments due date is extended until 4/27/2020.
  • Turnover taxpayment of installment n°3 is postponed between the days 04/27/2020 and 5/04/2020, depending on the termination of the taxpayer’s identification tax code (“CUIT”).
  • Real Estate Tax: payment of installment n°4 is postponed until 4/27/2020.
  • ABL: payment of installment n°4 is postponed until 4/27/2020.
  • General Vehicle Patent Tax: payment of installment n°2 is postponed until 4/27/2020.
  • Publicity Contribution: tax returns and deposit of sums withheld by withholding agents, corresponding to installment n° 3, is postponed until 4/27/20.

19. The Province of Buenos Aires tax authorities´ actions to mitigate the consequences of the pandemic:

  • Suspension of procedural terms: the suspension has been extended until 4/27/2020.
  • Payment Facility Plans: installments due date is postponed 60 days.
  • Turnover tax: payment is postponed between the days 5/04/2020 and 4/15/2020 depending on the termination of the taxpayer’s identification tax code (“CUIT”).
  • Urban Real Estate Tax: payment of installment n°2 is postponed until /15/2020.
  • Complimentary Real State tax: payment of installment n°2 is postponed until 6/12/2020.
  • Precautionary measures: the suspension of the execution of precautionary measures on bank accounts is extended until 5/31/2020.

20. Measures taken by the Arbitration Commission of the Multilateral Convention:

  • Suspension of procedural terms: the suspension has been extended until 4/08/2020.
  • Turnover tax: it has been extended until April 27 and April 30 (depending on the termination of the taxpayer´s code “CUIT”) the due date for the payment of the installment n°3, only if the taxpayers develop their activities in the jurisdictions which adhere to the resolution that establishes the extension, and given that their income do not exceed $2.500.000 for FY 2019.

[1] Through Resolution No. 48/20 of the Ministry of Internal Affairs, with the amendments introduced by Administrative Decision No. 446/20, the “Unique Enabling Certificate for Circulation – Emergency COVID-19” (“Certificado Único Habilitante para Circulación – Emergencia COVID-19”) is implemented from 04/06/2020 for those persons affected to certain activities and services declared essential in the emergency, as well as to those which will be declared in the future. This certificate will be personal and non-transferable, and must be generated through the Remote Procedure Platform (Spanish acronym ‘TAD’), entering to https://tramitesadistancia.gob.ar, for the purposes of its submission at the request of the competent authority when driving on public roads, together with the National Identity Document. The certificate will be valid during the period of the social, preventive and compulsory isolation.

[2] Excepted from the “Unique Enabling Certificate for Circulation – Emergency COVID-19”. For these exempt cases, the competent authorities must implement the corresponding certificates, which must comply with the minimum requirements set forth in Resolution No. 83/20 of the Ministry of Transport. Those certificates already issued will remain valid until the social, preventive and compulsory isolation had finished or until such certificates were voided.

[3] For these activities and services, a specific certificate has been implemented through Resolution No. 84/20 of the Ministry of Transport. Those certificates already issued will remain valid. The new certification is available for consultation here