Taxpayers paying foreign service providers will be required to have their tax compliance and financial capacity analyzed through the “Comprehensive System for Monitoring Payments Abroad for Services” and approved before making payments abroad.
In General Resolution No. 5135/2022 (the Resolution) (published 7 January 2022), the Argentine Tax Authority (AFIP) established the “Comprehensive System for Monitoring Payments Abroad for Services” (SIMPES). The SIMPES applies to individuals and entities that pay foreign service providers. Before making the payments, the AFIP will analyze the tax compliance and financial capacity of the individuals and entities as a prerequisite to making the payments.
Background
In Communication "A" 7,433 (issued 6 January 2022), the Argentine Central Bank (BCRA) required financial institutions to verify that an individual or entity paying a foreign service provider has obtained an approved affidavit through SIMPES.
General Resolution No. 5135
The Resolution establishes that SIMPES will apply to individuals, undivided estates and entities that need to pay foreign service providers on their own account or on behalf of third parties.
The parties required to make the payments must provide a sworn statement through SIMPES with the following information:
- Payor Tax ID
- Reason for the transfer
- Type and amount of foreign currency to be transferred
- The financial institutions making the payments
- Payee information
They must also give their express consent for the sworn statement to be sent to the BCRA for its intervention.
Once the required information is entered, AFIP will analyze the individual’s or entity’s facts and circumstances based on the information available in its records and the individual’s or entity’s financial capacity through the “Financial Economic Capacity System” (System CEF) established by General Resolution No. 4,294. If the AFIP determines that the individual or entity has not complied, the individual or entity may request a reprocessing or express their disagreement by following the process set out in General Resolution No. 5135.
General Resolution No. 5135 clarifies that entities and agencies of the Federal Government, as well as institutions that are part of the provincial or municipal states (except for entities and organizations included in Article 1 of Law No. 22,016), are exempt from compliance with SIMPES. In addition, the following services are excluded from the SIMPES requirement: freight services, passenger transportation services, travel and other card payment services, government services and health services by travel assistance companies. Furthermore, General Resolution No. 5135 indicates that the AFIP will publish on the microsite for "SIMPES" minimum amounts to which the SIMPES obligation will not apply.
The SIMPES requirement became effective 7 January 2022 and applies to service contracts that were entered before that date and have pending payments as of 7 January 2022.
For additional information with respect to this Alert, please contact the following:
Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires
- Carlos Casanovas
- Gustavo Scravaglieri
- Ariel Becher
- Sergio Caveggia
- Pablo Baroffio
- Sabrina Maiorano
- Juan Ignacio Pernin
Ernst & Young LLP (United States), Latin American Business Center, New York
- Pablo Wejcman
- Agustina Paula Paradiso
- Ana Mingramm
- Lucas Moreno
- Enrique Perez Grovas
Ernst & Young Abogados, Latin American Business Center, Madrid
- Jaime Vargas
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
- Lourdes Libreros
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
- Raul Moreno, Tokyo
- Luis Coronado, Singapore
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
