Gross Income Tax:
International Telecommunications Services
In a recent judgment[1], the Tax Court of Appeals of the Province of Buenos Aires considered that the international telecommunications service denominated as “incoming traffic”, which consists in routing telecommunications originated abroad and delivering them to recipients in Argentina, is not subject to gross income tax in such province.
In order to make such decision, the Court followed Section 160 of the Tax Code, which sets forth that, among others, the following activities do not constitute taxable actions: “d) exports, meaning the activity of selling products and goods outside of Argentina by the exporter, subject to the mechanisms applied by the National Customs Administration. The provisions of this subsection do not reach related activities such as: transport, slinging, stowage, deposit and any other similar activities”.
Then, the Court resorted to the Customs Code, which defines the concept of export of goods in Sections 9 and 10. Section 9 outlines that the “export is the extraction of goods from a customs territory”, and Section 10 sets forth that “there will be also considered as goods: a) the provision of services made abroad, which is used or exploited outside of the country …”
Considering that from an economic standpoint the services of “incoming traffic” are exploited and used in a foreign country and by a person that resides or is located abroad, the Court concluded that it is an export activity developed by the Argentine company, and therefore included in Section 160 subsection d) of the Tax Code as an activity not subject to Gross Income Tax.
Contact: Gastón Miani gaston.miani@trsym.com (+5411) 5272 1759
[1] Tax Court of Appeals of the Province of Buenos Aires, file Nº 2306-114999/2004, “IMPSAT S.A.”, from September 25, 2014.
Customs Law: amendments to the “DJAIs”
The Federal Public Revenue Administration (Administración Federal de Ingresos Públicos or “AFIP”) unveiled a mechanism to amend the Advanced Affidavits for Imports (Declaraciones Juradas Anticipadas de Importación or “DJAIs”).
This new procedure, named as Amendment to the Advanced Affidavits for Imports (Rectificación Jurada Anticipada de Importación, or “RJAI”) was created, regulated and implemented through the External User Instructions Manual (Manual de Procedimiento de Usuario Externo) which is published in AFIPs website.
The first thing that draws attention is that AFIP is modifying general application rules (AFIP’s General Resolution Nº 3252 and Nº 3255) by means of an instructions manual published in its website. This instructions does not have any binding legal force to customs operators. However, by impacting in the Customs Information System, it will not be possible to operate without complying with such instructions. Thus, AFIP created a new source of law: “the website instructions”.
Major modifications incorporated with the RJAI are:
- The request for any DJAI extension can only be made through a RJAI. Extensions may be requested only once. This is one of the most criticized aspects of this new sub-regime, since AFIP’s General Resolution Nº 3255 does not set any limits to the requests for extensions.
- The registration of the RJAI requires the AFIP officers to review the affidavit in order to give their authorization. Thus, it may happen that following an authorized DJAI extension, the RJAI may be observed (possibly without any legal arguments).
- Except for the importer’s CUIT, all the information fields of a completed DJAI may be amended RJAI.
A DJAI may not be amended when:
- It has been used for a different import, in whole or in part. This may cause serious inconveniences in the Staggered Shipping Regulations (Régimen de Envíos Escalonados) and in the Import of Assets for Turn-key Projects Regulations (Régimen de Importación de Bienes Integrantes de Plantas Llave en Mano), among others, because in the event a DJAI is used partially for a different import, it will be impossible for the affiant to make an extension request, which prior to this new RJAI system, it was able to make without problems.
- It is the subject of any injunction.
- The affiant has purchased foreign currency, and attempts not to declare such fact in the amendment.
- The affiant has purchased foreign currency, and attempts to amend the FOB amount by inserting a lower value than the purchased foreign currency.
We consider that the RJAIs, far from providing any operational solutions for those who operate in foreign trade, will add more conflict to the ongoing questioned DJAIs.
According to what has been informed by the Center for Customs Dispatchers, some of their associates already have had problems in registering the new RJAIs.
Contact: Gastón Miani gaston.miani@trsym.com (+5411) 5272 1759
“SICOM Créditos VI” Financial Trust for AR$ 28 million
Deal counsel in the issuance and placement in Argentina of trust securities for AR$ 28,000,000 issued under the “SICOM Créditos VI” Financial Trust, in which Sicom S.A. acted as trustor, Banco de Servicios y Transacciones S.A acted as trustee, issuer, arranger, structuring and placement agent, and Global Equity S.A. acted as placement agent. (2014)
Generación Frías’s AR$120 million Class I Notes Issuance and U$S 12 million Commercial Financing
Legal counsel to Generación Frías S.A., an Albanesi Group company located in Argentina, for the Issuance of Class I Notes for AR$ 120 million under the U$S 50 million Global Notes Programme and to Albanesi S.A. and R.G. Albanesi S.A as guarantors. Banco de Servicios y Transacciones S.A. y SBS Trading S.A. (ex SBS Sociedad de Bolsa S.A.) acted as arrangers and placement agents; Banco Macro S.A. acted as arranger and Macro Securities SA. participated as placement agent. In addition, PW Power Systems Inc. granted a partial financing of the unit purchase price for US$ 12 million for a period of four years. The financings were granted for the (i) sale, storage, installation, operation and maintenance of the job site to be located at Frías, Santiago del Estero and (ii) acquisition of one FT4000™ SwiftPac® 60 DF 60 MW. (2014)
Integración Eléctrica Sur Argentina S.A.´s AR$ 125,000,000 Class I Notes Issuance
Deal counsel in the issuance of Integración Eléctrica Sur Argentina S.A.´s AR$ 125,000,000 Class I Short-Term Notes under its U$S 50,000,000 Global Short-Term Notes Programme.
Nación Bursátil S.A. and Puente Inversiones y Servicios S.A. acted as arrangers and placement agents.
“Bancor Personales III” Financial Trust for AR$ 49,950,000
Deal counsel in the issuance and placement in Argentina of trust securities for AR$ 49.950.000 issued under the “Bancor Personales III” Financial Trust, in which Banco de la Provincia de Córdoba S.A. acted as arranger, trustor, collection, administration and custody agent and placement agent, Deutsche Bank S.A. acted as financial trustee and successor collection, administration and custody agent, Banco de Servicios y Transacciones S.A. acted as co-arranger y co-placement agent and Puente Inversiones y Servicios S.A. acted as co-placement agent. (2014)
“BeST Consumer Finance Serie XXXIV” Financial Trust for AR$ 113,000,000
Deal counsel in the issuance and placement in Argentina of trust securities for AR $ 113,000,000 issued under the “BeST Consumer Finance Serie XXXIV” Financial Trust, in which Banco de Servicios y Transacciones S.A acted as arranger, trustor, servicer and custodian, and TMF Trust Company (Argentina) S.A acted as trustee.
Generación Independencia’s AR$ 35 million Series II Notes Issuance
Legal counsel to Generación Independencia S.A., as issuer of its AR$ 35,000,000 Series II Notes under the $ 50,000,000 Global Notes Programme. Banco Macro S.A. acted as arranger and Macro Securities S.A. acted as placement agent. (2014)
AR$ 30 million syndicated loan granted to Credinea S.A.
Legal counsel to Banco de Servicios y Transacciones S.A., Banco Comafi S.A., Nuevo Banco de Santa Fe S.A. and Banco del Neuquén S.A., as lenders in a sindicated financial loan granted to Credinea S.A. for an aggregate of AR$ 30,000,000. (2014)
'Credimas Serie 21' Financial Trust for AR$ 80 million
Deal counsel in the issuance and placement in Argentina of trust securities for AR $80,000,000 issued under the 'Credimas Serie 20' Financial Trust, in which Banco Supervielle S.A. acted as arranger and placement agent, TMF Trust Company (Argentina) S.A. acted as financial trustee and Credimas S.A. acted as servicing and custody agent (2014).