The Argentine Central Bank lifts certain restrictions for the distribution of profits and dividends to Shareholders

On January 16, 2020 the Argentine Central Bank issued Communication “A” 6869 (the “Communication”). The Communication relaxed the rules for the purchase and transfer of foreign currency for the distribution of profits and dividends in foreign currency to non-Argentine shareholders.

Pursuant to the Communication, non-Argentine shareholders may access the local foreign exchange market (the “FX Market”) for the distribution of dividends and profits without prior approval of the Argentine Central Bank, provided that:

  1. Profits and dividends shall be evidenced in audited financial statements;
  2. The aggregate amount paid to non—Argentine shareholders shall not exceed the equivalent in Pesos approved by the relevant shareholders´ meeting;
  3. The aggregate amount of distributions paid through the FX Market as of January 17, 2020 shall not exceed 30% of the value of the new foreign direct investment contributions made as of such date in the Argentine company that have been repatriated and converted to Pesos through the FX Market.
  4. The payment may not be made before 30 calendar days from the repatriation and conversion to Pesos of the last capital contribution made to the company, as requested in section 3 above.
  5. The client shall provide evidence that the equity contribution has been capitalized. Alternatively, the client shall provide evidence of the filing of the request for capitalization with Public Registry of Commerce (which shall be obtained within 365 calendar days from the filing).
  6. If applicable, the relevant direct investment shall have been registered with the Argentine Central Bank under the Foreign Assets and Liabilities Reporting Regimen (“Relevamiento de activos y pasivos externos”).

For more information, do not hesitate to contact Marcelo R. Tavarone, Federico M. Salim, Julieta De Ruggiero or Francisco Molina Portela.

Regulation of “Payment Service Providers”

On January 9, 2020, the Central Bank of the Argentine Republic issued Communication “A” 6859 (the “Communication”). The Communication establishes a partial regulation of the activities of Payment Service Providers (“PSP”), this is, of those legal persons that, without being financial entities, fulfill at least one function within a retail payment scheme, such as offering freely disposable accounts to their clients to make or receive payments, within the framework of a global payments system.

The Communication establishes the following obligations to be fulfilled by the PSP´s, which must be carried out, at most, by January 31, 2020:

  1. Provide for client funds to be, at all times, immediately available for an amount equivalent to, at least, the amount credited in the payment account, with the PSP systems having to identify and individualize the funds of each client;
  2. Deposit 100% of the funds of its clients, at all times, in peso denominated accounts located in financial institutions within Argentina;
  3. Upon the request of its clients, transfer the balance in the payment account to the realization of operations with “common money funds” in the country; and
  4. Carry out all PSP transactions (payment of suppliers, salaries, etc.) through separate accounts to those where the funds of their clients are deposited.

Likewise, the communication establishes that in the event of non-compliance with any of the aforementioned obligations, the sanctions established in articles 41 and 42 of the Financial Entities Law, and concordant provisions, will be applicable to the PSPs and the members of their administrative/control bodies.

For more information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Agustín Griffi, Pablo Tarantino, or to

“Centenario Trust I” Financial Trust for AR$ 1.145 million


Deal counsel in the creation of the Financial Trusts Global Program “Centenario II” for an amount of up to US$ 250 million (or the equivalent in other currencies) and in the issuance and placement in Argentina of trust securities for AR$1,145,113,264 issued under the “Centenario Trust I” Financial Trust, in which Compañia Financiera Argentina S.A. (Efectivo Sí) acted as trustor, arranger, collection agent and placement agent, TMF Trust Company (Argentina) S.A. acted as financial trustee, Banco Patagonia S.A. acted as arranger and placement agent and INTL CIBSA S.A. acted as placement agent.

Celulosa Argentina S.A.'s issuance of U$S 3,117,250 Class 15 Notes


Counsel in Celulosa Argentina S.A.’s issuance of Class 15 Notes for U$S 3,117,250 under the Global Program of Notes for an amount of up to U$S 280,000,000. Puente Hnos. S.A. and Banco de Servicios y Transacciones S.A. acted as placement agents of the Class 15 Notes.

Debt refinancing of Biscayne Servicios S.A.

Legal counsel to Banco Santander Rio S.A. and Banco de la Provincia de Buenos Aires who acted as lenders in the debt refinancing of Biscayne Servicios S.A. for AR$ 491,630,864.74, equivalent to 10,595,493 UVAs.

Modifications introduced to the Personal Assets Tax

Decree No. 99/2019, published in the Official Gazette last Saturday, December 28, 2019, introduced implementing regulations to Law No. 27,541 (please refer to the following link for comments on the referred law). Therefore, the principal modifications introduced to the Personal Assets Tax (PAT) are the following:

1.- Applicable Rates

Law No. 27,541 has modified the rates to determine the PAT corresponding to the 2019 (and following) tax periods, which now range within a progressive scale between 0.50% and 1.25%, applicable over the total value of the levied assets located in Argentina.

Through Decree No. 99/2019, the Executive Power has exercised the powers delegated by Law No. 27,541 so as to establish, until December 31, 2020, differential rates to levy assets located abroad, which may exceed in up to 100% those that apply over assets located in Argentina. In such sense, the Executive Power established a progressive scale ranging between 0.70% and 2.25% over the total value of the assets located abroad. A sole tax rate applies over the total value of such assets, therefore dismissing the system -that currently applies only to assets located in Argentina- under which different portions of the taxpayer’s levied estate is taxed under increased rates as its value arises.

It is worth noting that the non-taxable minimum threshold continues in the figure of two million Argentine pesos (AR$ 2,000,000), and that such amount should be first deducted against the value of the assets located in Argentina. Under Decree No. 99/2019, the non-taxable minimum threshold amount would be irrelevant for purposes of establishing the applicable rate within those included in the differential rate scale corresponding to assets located abroad. Indeed, the non-taxable minimum threshold would only be relevant for purposes of establishing the taxable base of the differential rate.

Furthermore, the rate applicable to the following assets has been risen from 0.25% to 0.50%:

  • Shares or participations in the equity of Argentine companies, held by individuals or undivided estates domiciled in Argentina or abroad, and/or by foreign companies or by any other foreign entity (the applicable tax should be assessed and paid by the Argentine company whose equity is levied).
  • Levied assets belonging to foreign aliens that are held, custodied, guarded, administrated, possessed, used, enjoyed, disposed of, or co-owned by Argentine individuals, entities or undivided estates.

2.- Benefits on Fund Repatriation

Law No. 27,541 also empowered the Executive Branch, until December 31, 2020, to reduce the differential rates in cases of repatriation of funds arising from the sale of financial assets located abroad.

In such context, the Decree has established that those who, as of March 31 of every year, repatriate financial assets representing at least 5% of the total value of their assets located abroad, will be exempted from the application of the differential rate.

For the purposes foreseen in the preceding paragraph, the following assets will be deemed as financial assets located abroad: The holding of foreign currency deposited in banking and/or financial and/or similar entities located abroad; company participations and/or equivalents (private securities, shares, quotas and other participations) in any type of entities, corporations or companies, with or without legal status, incorporated, domiciled, based or located abroad, including sole proprietorships (“empresas unipersonales”); rights inherent to the status of beneficiary, fideicommissary (or similar) of any kind of trusts (or similar structures) established abroad, or in foreign private interest foundations or in any other type of similar affected-estate (“patrimonio de afectación”) located, based, domiciled or established abroad; any kind of financial instrument or security, such as bonds, private securities, representative securities (“valores representativos”) and share depositary receipts, quotas in common investment funds and other similar structures, independently from their denomination; credits and any type of foreign right with economic value and any other type of asset that may be foreseen in the implementing regulations.

The benefit will be maintained to the extent the repatriated funds stay deposited under the owner’s name in entities comprised within Law No. 21,526, until December 31 (inclusive), of the calendar year in which the repatriation took place.

The Decree establishes that where reimbursement applies, it will be made up to an amount equivalent to the one that exceeds the increase in the obligation that would have to be paid in case the foreign assets were levied under the progressive scale applicable to the assets located in Argentina.

3.- Residence Criteria

Law No. 27,541 has established, with effects as of 2019 tax period, that the levied subject will be ruled by the residence criteria under the terms and conditions foreseen in sections 119 (and following) of the income tax law (text 2019), hence disregarding the previously applicable domicile criteria. In such context, Decree No. 99/2019 establishes that any reference made by legal, implementing or complementary regulations to the “domicile” connecting nexus should be understood as referred to “residence”. However, it is worth pointing out that unlike Law No. 27,541, and in what could imply a regulatory excess, Decree No. 99/2019 does not refer to sections 119 (and following) of the income tax law (text 2019) but to sections 116 (and following) of the income tax law (text 2019).

4.- Matters of Uncertain Interpretation

Due to the defective wording of the regulations commented herein, or to the omission of their treatment, there is uncertainty as to the actual scope of the following matters, which we expect be clarified by the implementing regulations to be issued by the National Tax Authority:

Validity of the benefit on funds repatriation: There is no certainty as to whether the funds repatriation benefit applies to the 2019 tax period, considering that the repatriation period elapses on March 31 and there is an obligation to maintain the repatriated funds deposited in an Argentine financial entity up to December 31.

Under a reasonable interpretation that considers the spirit of the tax reform, the differential rates will not apply to the 2019 tax period to the extent the funds are repatriated before March 31, 2020 -i.e., before the filing date of the 2019 affidavit- and held in Argentine financial entities up to December 31, 2020. The benefit would fall upon breach of this last requirement, and the related consequences would hence apply (liability on tax differences, interests and fines).

Scope of the reimbursement benefit: Neither Law No. 27,541 nor Decree No. 99/2019 clarify what is reimbursed. In principle, and under the current regulatory status of the matter, we understand that this benefit would apply if a taxpayer files the affidavit and pays the differential rate before its due date, and further repatriates the relevant funds before March 31. In such case, the amounts paid under the differential rate would be reimbursed, as well as the difference of the advanced payments corresponding to the following tax period.


For additional information on the matters commented herein, please contact Gastón A. Miani, Ana Do Nizza, or Juan Pablo Baumann Aubone.

Reprofiling US$ 14,800,000 aggregate principal amount of the Municipality of Río Cuarto’s 7.65% Notes due 2020


Legal counsel to the Municipality of Río Cuarto, as issuer of US$ 14,800,000 aggregate principal amount of it’s 7.65% secured Notes due 2020, issued on November 17th, 2017 (the “2020 Notes”); Banco de la Provincia de Córdoba S.A. and Puente Hnos. S.A., acting in their capacity of consent agents and information agents under the process of the restructuring the 2020 Notes, through the noteholders’ meeting held on December 20th, 2019.

“CARFACIL V” Financial Trust for AR$ 73,307,248


Deal counsel in the placement and issuance in Argentina of trust securities for AR$73,307,248 issued under the “CARFACIL V” Financial Trust, whereby TMF Trust Company (Argentina) S.A., as trustee under the private financial trust “FINANCIAL TRUST CARFAUTO” acted as trustor, Banco de Valores S.A. acted as trustee, organizer and replacement servicer and Ralf S.A. acted as credit administrator and paying agent. Banco de Valores S.A., INTL CIBSA S.A., Macro Securities S.A. and Industrial Valores S.A. acted as placement agents.

Celulosa Argentina S.A.’s reopening of Class 10 Notes tender offer and issuance of U$S 3,067,488 additional Class 13 Notes


Counsel in Celulosa Argentina S.A.’s reopening of Class 10 Notes tender offer and issuance of Additional Class 13 Notes for U$S 3,067,488 under the Global Program of Notes for an amount of up to U$S 280,000,000, solely payable through the tender of Class 10 Notes. Puente Hnos. S.A. and Banco de Servicios y Transacciones S.A. acted as placement agents of the Additional Class 13 Notes.

Impact on Tax Matters of the Social Solidarity and Productive Reactivation Act

Below please find a brief summary of the principal tax aspects of the law No. 27,541, enacted by the Senate last Saturday, December 21, 2019, known as “Social Solidarity and Productive Reactivation Act”, as it arises from the promulgation made through Decree No. 58/2019 (with a partial veto related to aspects not addressed herein) and its publication in the supplement of the Official Gazette dated December 23, 2019:

1.- Tax regularization regime: The law establishes a tax regularization regime for debts resulting from tax, customs and social security matters accrued as of November 30, 2019 (inclusive), or from infringements committed as of the same date, and only applicable to Micro, Small and Medium Companies. The law foresees the extinction of criminal actions, the waiver of penalties arising from formal or substantial infringements, and the waiver of compensatory or punitive interests in different proportions depending on the circumstances of the case, among other benefits. The concepts incorporated into the tax regularization regime may be cancelled through offset against certain credits existing against the tax authority, cash payment (in which case a 15% reduction over the consolidated debt would be awarded) or payment plans of up to 120 installments depending on the circumstances of the case. The term to perform the incorporation into the tax regularization regime elapses on April 30, 2020 (inclusive).

2.- Employer social security contributions: The rate of the employer social security contributions corresponding to the subsystems arising from Laws No. 19,032 (Social Security National Institute for the Retired), No. 24,013 (National Employment Fund), No. 24,241 (Argentine Integrated Social Security System) and No. 24,714 (Family Allowances) is established on 20.40% for the employers of the private sector whose principal activity qualifies under the “services” or “commerce” categories and to the extent their total annual sales exceed the limits for qualifying as a “Medium Company – Second Category”, and on 18% for the rest of the employers of the private sector. The law awards the possibility to compute a given percentage of the referred employer social security contributions as a tax credit against VAT, and further establishes a monthly non-taxable minimum threshold over each workers’ salary of AR$ 7,003.68 (with particularities on certain cases) and an additional monthly discount of AR$ 10,000 over the total taxable base for those employers with a payroll including no more than 25 employees.

3.- Personal Assets Tax: The progressive rate scale ranging between 0.25% and 0.75% applicable to Argentine individuals and undivided estates is replaced by a new one ranging between 0.50% and 1.25% and with effects as of the 2019 tax period. In addition, the Executive Power is authorized to establish higher differential rates of up to 2.50% to levy assets located abroad, as well as to reduce them in case of repatriation of the product of the sale of financial assets located abroad. The rates applicable to substitute taxpayers for the holding of shares or participations in the equity of companies ruled under Law No. 19,550 and for the administration or disposition of assets belonging to foreign aliens are increased from 0.25% to 0.50% with effects as of the 2019 tax period. Furthermore, the law establishes that with effects as of the same tax period the subject of the personal assets tax will be ruled by the residence criteria on the terms foreseen in the income tax law, hence disregarding the previously applicable domicile criteria.

4.- Income tax: The reduction to 25% of the corporate income tax rate applicable to the subjects comprised within subsections a) and b) of section 73 of the income tax law (text 2019) as well as the increase to 13% of the rate applicable to dividend distributions foreseen in the second paragraph of subsection b) of section 73 of the income tax law (text 2019) and in section 97 of the same act, is suspended up to the financial years starting as from January 1, 2021. The so called “cedular tax” applicable on the Argentine sourced net income obtained by Argentine individuals and undivided estates over interests arising from term deposits (“depósitos a plazo”) made in institutions subject to the financial entities regime, public securities (“títulos públicos”), tradable securities (“obligaciones negociables”), stakes in common investment funds (“cuotapartes en fondos comunes de inversión”) and debt securities (“títulos de deuda”) of financial trusts, is abrogated as of the 2020 tax period. Furthermore, an exemption is established over interests arising from deposits in saving accounts (“cajas de ahorro”), special saving accounts (“cuentas especiales de ahorro”), term deposits (“depósitos a plazo fijo”) in Argentine pesos, and third party deposits or other forms of gathering funds from the public as determined by the Argentine Central Bank, in all cases to the extent they are made in institutions subject to the financial entities regime, whilst interests arising from deposits subject to clauses of adjustment are excluded from the exemption. The law further re-establishes the exemptions foreseen in section 36 bis of Law No. 23,576, in subsection b) of section 25 of Law No. 24,083 and in subsection b) of section 83 of Law No. 24,441. Finally, exemptions are also established as from tax period 2020 over (i) income obtained by Argentine individuals and undivided estates from the disposition of the assets foreseen in section 98 of the income tax law (text 2019) but not comprised within the first paragraph of subsection u) of section 26 of the referred norm (text 2019), and to the extent they are listed in exchange markets authorized by the CNV, and (ii) income obtained by foreign beneficiaries on the assets not comprised in the fourth paragraph of subsection u) of section 26 of the income tax law (text 2019), to the extent they do not reside in non-cooperative jurisdictions or the invested amounts do not come from non cooperative jurisdictions. Argentine individuals and undivided estates will not be subject to the so-called “cedular tax” over interests corresponding to the 2019 tax period arising from public securities (“títulos publicos”) and tradable securities (“obligaciones negociables”) to the extent they choose to affect such interests to the computable cost of the security from which they arise.

5.- The new PAIS Tax: A new levy denominated as the PAIS tax (Spanish acronym for the phrase “For an Inclusive and Supportive Argentina”) is created for a term of 5 tax periods computed as from the moment in which the law comes into force. The PAIS tax levies (a) the purchase of foreign currency made by Argentine residents for saving purposes or without other specific purpose, (b) foreign currency exchanges made by financial entities on account of the purchaser aimed at paying the acquisition of assets or services made abroad (or of services rendered in Argentina by non-resident parties) that are cancelled through the use of credit, debit or purchase cards, (c) the purchase of services rendered abroad made through Argentine travel or tourism agencies, and (d) the purchase of land, air or aquatic passenger transport services with foreign destination, to the extent that access to the MULC (Spanish acronym for the “Sole and Free Foreign Exchange Market”) is needed for cancelling the transaction. The rate of the PAIS tax is established on 30%, that will apply on the total value of the transaction in the cases foreseen in points (a) to (c) above, and over the value of the transaction net of taxes and government fees in the cases foreseen in point (d) above. The tax applies over Argentine residents that make any of the transactions foreseen in points (a) to (d) above, whilst those entities specifically indicated as such shall act as perception and liquidation agents.

6.- Tax on debits and credits: The tax rate applicable over debits arising from any form of cash extraction is duplicated. The referred increment does not apply on accounts belonging to individuals or entities qualifying as Micro or Small Companies.

7.- Internal taxes: The internal taxes regime applicable over the assets comprised in section 38 of Law No. 24,674 (including different type of vehicles, motorcycles, etc.) is modified through the establishment of new limits for exemptions and new taxable basis, as well as through the incorporation of new value categories and incremented tax rates depending on the case.

For more information, do not hesitate to contact Gastón A. Miani, Ana Do Nizza or Juan Pablo Baumann Aubone.