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Multinationals Subject to Free Transmission of Goods Tax

Argentina

In Argentina, the last Free Transmission of Goods Tax ("FTGT") was in force until 1976 at which time the tax was abolished. In 2009 the Province of Buenos Aires enacted a new Law which entered into force on 1 January 2010 establishing a FTGT just at a provincial level. Taxand Argentina comments on the modifications to the FTGT and its main characteristics.

The main characteristics of this tax are the following:

1. The FTGT levies enrichments from all free transmission of goods, including inheritance, legacies and donations. This tax shall be paid by the beneficiary of the transmission.

2. Individuals and legal entities are subject to the FTGT.

3. Tax payers domiciled in the Province are subject to FTGT in respect of assets located in and outside the Province and taxpayers domiciled in other provinces are subject to the FTGT in respect of the free enrichment of assets located in the Province.

Up to 31 December 2010, the transfers of goods were exempted from the FTGT when the total amount of goods transferred was equal to or less than AR$3,000,000 and tax rates applied were set between 5% and to 10.5%.

The Province of Buenos Aires enacted a law that modifies the FTGT which entered into force on 1 January 2011. Among the main modifications established by the law, the following are the most relevant:

  • It is reduced to AR$50,000 on the total amount of goods freely transferred which are not subject to the FTGT. This minimum amount could be increased under certain circumstances.
  • The tax rates would be modified from 4% and to 22%.

Debts accrued up to 31 December 2010 inclusive of FTGT, would be extinguished automatically.


Taxand's Take


If you are making a gift contribution, the beneficiaries of the transmission should be aware of the high rates of the Free Transmission of Goods Tax. The Province of Buenos Aires, Argentina, enacted a law that modifies the Free Transmission of Goods Tax reducing the minimum not subject to the tax to AR$50,000 and increasing the tax rates up to 22%. This law entered into force on 1 January 2011.

Your Taxand contacts for further queries are:
Ezequiel Lipovetzky
T. +54 11 4021 2300
E. ezequiel.Lipovetzky@bfmyl.com

Lucia Peralta Krogslund
T. +54 11 4021 2300
E. lucia.peraltakrogslund@bfmyl.com

Taxand's Take Author