Last July 11, Martin Tetaz filed before the House of Representatives a bill to repeal the Personal Assets Tax.
The Bill
The Bill (hereinafter, the “Bill”) consists of five articles and proposes to repeal “the tax provided by Article 16 of Law 23,966, text ordered by Decree 281/97” and “Articles 17 to 30 bis of Law 23,966, text ordered by Decree 281/97” (i.e., the Personal Assets Tax).
Additionally, it provides a benefit for taxpayers who have made advance payments or have a credit against the Tax Authority, allowing the amounts in question to be claim as a tax credit.
The main purpose of the Bill is that the Personal Assets Tax (hereinafter, the “Tax”) ceases to exist in Argentina. This is in view of the fact that, in spite of having been approved on an emergency basis for a period of nine years (i.e., since December 31, 1999), such exceptionality has been extended for successive periods, affecting the predictability of the Tax and violating Article 75 Subsection 2 of the National Constitution.
As a result, the provinces lost the ability to determine their taxable bases, reducing their source of financing. Likewise, Martin Tetaz questions the design of the Tax since it breaks with the constitutional guarantee of equality. This arises from the fact that the tax valuation of assets depends exclusively on what each province determines, generating inequalities between taxpayers from different jurisdictions but with the same economic capacity.
Notwithstanding the foregoing, we must point out that the Bill could be subject to modifications and alterations as from the parliamentary debate to be held before the Houses of Representatives and the Senate.
This report cannot be considered as legal or any other kind of advice by Allende & Brea.
