The government announced that it is working on a new bill to tax financial income, whose main purpose is to tax the transfer of shares and the distribution of profits.

The government announced that it is working on a new bill to tax financial income. According to the information provided by the media, the main purpose of the project is to tax the transfer of shares and the distribution of profits. The head of the House of Representatives of the ruling Party (“Frente para la Victoria”), Mrs. Juliana Di Tullio, requested National Deputy Mr. Héctor Recalde to prepare the project.

As informed, the new bill would be submitted in the following weeks. As of today, there are various projects with the purpose of taxing the financial income which have reached Congress, including one filed by Mr. Héctor Recalde in June, 2012. It has been informed that the new project will attempt to unify the criteria of the various projects.

Among the projects already submitted to the Chamber of Deputies, one of the most relevant is one filed by Mr. Carlos Heller, Deputy for “Nuevo Encuentro”, which purports to tax all financial income generated by companies and establishes a tax allowance of AR$ 100,000 applicable only to the income generated by individual residents and undivided estates in Argentina.

Currently, in brief, the tax treatment on income tax is as follows:

  1. interest derived from fixed-term deposits for individuals is exempted;
  2. the results derived from the purchase and sale, exchange, disposal of shares, bonds and securities obtained by foreign beneficiaries (Section 78 of Decree No. 2284/1991) are exempted;
  3. interest, results of the purchase and sale and trust securities obtained by Argentine resident individuals and foreign beneficiaries, are exempted in the event that the securities are publicly offered and that the financial trust is created for securitized assets (Section 83 sub-section b) of Law No. 24,441) and
  4. results of the purchase and sale and the interest of Negotiable Obligations/Instruments are exempted in the event that those securities are publicly offered and obtained by Argentine resident individuals and foreign beneficiaries (Section 36 bis) point 3) of Law No. 23,576 of Negotiable Obligations/Instruments).