[World Tax News] Argentina enhances the scope to levy tax on “Foreign Currency”

Editorial Team – [2022] 143 taxmann.com 385 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. Argentina enhances the scope of levying tax on the acquisition of ‘Foreign Currency’

In 2019, the Argentina Government introduced a new law,the “law of social solidarity and productive reactivation in the framework of the public emergency”, that will apply for 5 years.

Chapter 6 of such law provides a levy of “Tax for an Inclusive and Supportive Argentina”. Said chapter levied a tax on the purchase of foreign currency without a specific purpose, purchases of goods or services from abroad,purchases made through portals or virtual sites in foreign currency, etc.

These transactions are taxed at the rate of 30%. However, the purchase of digital services was subject to tax at 8%.

Further, in a bid to protect Argentina’s dollar reserve, the Govt. tightened controls on buying and spending in foreign currencies and introduced an additional tax of35% computed on the existing 30% tax. The new 35% tax acts as a surcharge, subsequently increasing to 45% for certain transactions.

On 13th October 2022, videDecree 682/2022, the Argentina Government enhanced the scope of transactions in foreign currency that are subject to tax, which includes:

(a) The acquisition abroad of personal, cultural, and recreational services (does not include educational teaching), or its acquisition in the country when they are provided by non-residents;
(b) Import of luxury goods mentioned in Annex I of the Decree by the respective tariff code.

Further, the Govt. has also released General Resolution 5272/2022,which provides that the acquisition of personal, cultural, and recreational services is not subject to additional tax. However, the additional tax at the rate of 25% shall be imposed on:

(a) Purchases of goods with debit or credit cards and other payment systems if the amount exceeds US$ 300 per month;
(b) Purchases of travel tickets and tours acquired in foreign currency;
(c) Imports of luxury goods mentioned in Annex I of the Decree by the respective tariff code.

Source:
Decree 682/2022

General Resolution 5272

2. Netherlands launches online Consultation Paper on ‘Minimum Tax Rate’

On 24th October 2022, the Dutch government published a draft bill for the proposed Minimum Tax Rate Act, 2024. The bill was introduced for the domestic implementation of the OECD Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two agreement.

In 2021, the first draft ofthe proposed directive setting out a model for EU member states was declared by European Commission, and in June 2022, almost all member states voted in favour of the directive scheme. In pursuance of this scheme, the Dutch government launched the draft bill.

The proposed bill has been drafted in accordance with the Global Anti-Base Erosion (GloBE) Rules, including Income Inclusion Rule (IIR) and Undertaxed Payment Rule (UTPR)

The draft bill provides a minimum corporation tax rate of at least 15%. This measure will prevent the companies from shifting profits to low-tax jurisdictions to minimize the tax they pay.

Interested parties and stakeholders can submit their comments until 5thDecember 2022 via www.internetconsultatie.nl

Source: Official website

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