The Argentine Official Gazette published Law 27,562 on August 26, establishing a broad tax moratorium program covering tax, customs, and social security obligations due as of July 31, 2020. The program provides a complete waiver of penalties, an interest reduction on late payments, and the possibility of waiving a percentage of the tax due if the payment is made in full and in cash (rather than through the proposed instalment plan). The deadline for applying to the program is October 31, 2020 although small and medium enterprises (SMEs) may be eligible for a certain extension.
On October 31, 2020, the Argentinian government issued Decree 833/2020 extending the deadline to apply for the tax moratorium program from October 31(original deadline) to November 30, 2020. Therefore, taxpayers have additional time to evaluate the benefits of the program and file the corresponding application.
The Program may provide treasury relief to some taxpayers in Argentina during the current economic crisis. However, the Program’s attractiveness may be diminished by some of the limitations imposed by the plan, most notably those relating to cash repatriation and other cross-border payment restrictions. Considering the imminent deadline timeframe for applying to the Program, MNEs should immediately evaluate potential benefits that the Program may provide on Argentina operations.