Argentine government modifies exchange control rules and export duties

Tax Insights
from International Tax Services
Argentine government modifies
exchange control rules and export
duties
January 12, 2016
In brief
The recently elected government of Argentina, which took office on December 10, has issued the
following measures related to the exchange control regime and export duties:
 The Argentine Central Bank (BCRA) on December 17, 2015, issued Communication ‘A’ 5850, which
introduced significant modifications to the Exchange Currency Market (MULC) related to payment for
the import of goods and services. Communication ‘A’ 5850 also introduced requirements for the
purchase of foreign currency by Argentine residents.
 The Ministry of Economy and Public Finance on December 18, 2015, issued Resolution No. 3/2015,
which amended regulations related to the introduction of funds to Argentina. The resolution reduced
the required permanence period from 365 days to 120 days, and repealed the mandatory 30% deposit,
or ‘Encaje.’
 The government’s Executive Branch on December 16, 2015, issued Decree No. 133/2015, which
repeals export duties for most agricultural and industrial products.
The new measures indicate that the new Argentine government has started to normalize the exchange
control environment of the last five years.
In detail
Payment for imports of
goods
Payments for the import of
goods on shipments dated on
or after December 17 can be
executed without any
restrictions.
Debt for the import of goods
dated on or before December
16, 2015, can be paid through
the MULC as long as they
refer to:
 debts from the public
sector or from companies
controlled by the public
sector

transactions supported by
letters of credit or
guaranteed bills issued by
local financial institutions
until December 16, 2015,
or
 transactions owed to
International or Official
Credit Agencies or
guaranteed by those
agencies.
The following schedule has
been outlined for outstanding
debts on the import of goods
to access the MULC:
 From December 17, 2015,
through December 31,
2015, each importer may
pay debts up to USD $2
million (or equivalent).
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 From January 1, 2016, through
May 31, 2016, each importer may
pay debt up to the equivalent of
USD $4.5 million per calendar
month.
 Commencing June 1, 2016, there
will be no limit on the amount of
debt to be paid.
For transactions recorded with the
Customs Office before July 1, 2010,
prior approval from the BCRA is no
longer necessary to make payments
for the import of goods.
Payments for the import of
services
Payments for the import of services
provided on or after December 17 can
be executed without any restrictions.
Purchase of foreign currency by
Argentine residents
Resident individuals and corporations
(with certain exceptions) and local
governments may access the MULC to
purchase foreign currency without the
previously required approval of the
BCRA, for amounts not exceeding
USD $2 million in the calendar
month. The currency must be used
for one of the following activities:
 investments in real estate
properties abroad
 loans granted to non-residents
 direct investments abroad by
residents
 investments in foreign portfolios of
legal entities
The following schedule has been
outlined for payments for the import
of services provided until December
16, 2015.
 purchase of foreign currency to be
retained in Argentina, or
 During February 2016, the
monthly amount paid may not
exceed the equivalent of USD $2
million.
Specific requirements must be met to
execute these transactions. The abovementioned monthly limits are reduced
by the amount of foreign currency
acquired to pay for the import of
services.
 From March 2016 through May
2016, the amount may not exceed
the equivalent of USD $4 million
per calendar month.
 There will be no limitations after
June 2016.
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 purchase of travelers checks.
Financial debts with non-resident
entities
Communication ‘A’ 5850 provides
that all financial debts incurred
abroad by the financial sector, the
non-financial private sector, and local
governments no longer must settle the
related funds through the MULC.
If a resident entity seeks repayment of
principal or interest through the
MULC (i.e., the Argentinian resident
needs to acquire the foreign currency
via MULC to repay the debt), then the
funds lent by the non-resident entity
must comply with the MULC
settlement requirements.
For new debts (or renewals) incurred
on or after December 17, 2015, the
minimum period to retain the funds in
Argentina is reduced from 365 to 120
calendar days
The requirement to initiate a noninterest-bearing deposit amounting to
30% of the borrowed funds (known as
the ‘Encaje’) has been repealed.
Export duties relief
Decree 133/2015 provides a 0% tax
rate for the export of most agricultural
and industrial products, effective on
or after December 17, 2015. Certain
exceptions may apply.
The takeaway
Multinational companies with
investments in Argentina should
consider how these developments may
affect their investments or structures
in Argentina.
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Let’s talk
For a deeper discussion of how this might affect your business, please contact:
International Tax Services, United States
John A. Salerno
+1 (646) 471-2394
[email protected]
Jose Leiman
+1 (305) 381-7616
[email protected]
Maria Bel
+1 (646) 471-1268
[email protected]
Lucia Echenique Fossati
+1 (646) 471-6294
[email protected]
Daniel Landaluce
+1 (646) 471-7762
[email protected]
Camila Silva
+1 (646) 471-8794
[email protected]
International Tax Services, Argentina
Andres Edelstein
+54 11 4850 4651
[email protected]
Ignacio Rodriguez
+54 11 4850 6718
[email protected]
Juan Manuel Magadan
+54 11 4850 6847
[email protected]
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