Argentina enacts tax incentives and voluntary disclosure program to promote construction and access to housing

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EY Global

23 Mar 2021
Subject Tax Alert
Categories Corporate Tax
Jurisdictions Argentina

The new law has tax incentives for investments in real estate development projects and allows taxpayers to voluntarily declare funds in local or foreign currency that were previously undeclared.

On 12 March 2021, Argentina enacted Law 27,613, which establishes a promotional regime for construction. The regime includes two different incentives: tax incentives for construction and a voluntary disclosure program for local and foreign currency to be invested in the development of real estate projects in Argentina.

Tax incentives for real estate investors

The law establishes tax incentives to promote investment in real estate projects in the territory of Argentina that are initiated after the date of enactment (12 March 2021).

The incentives include the following:

  • Investments in real estate projects until 31 December 2022 are exempt from the personal assets tax for two tax years after the investment is effective.
  • One percent of the value of investments in real estate projects may be credited against the individual’s personal assets tax.
  • Owners that transfer real estate from 12 March 2021 to 31 December 2022 to corporations that develop projects covered by this regime will be able to defer the federal tax payment on the transfer.

Voluntary disclosure program for local and foreign currency to be invested in real estate projects

Individuals and corporations residing in Argentina may voluntarily declare before the federal tax authorities, the holding of foreign and/or local currency in Argentina and abroad, within 120 calendar days from 12 March 2021.

Individuals and corporations may temporarily use the declared funds to purchase domestic government bonds and invest in the development of real estate projects in Argentina.

The law imposes a special tax on the value of the declared holdings, according to the following rates:

  • 5% for funds deposited from 12 March 2021 to 60 calendar days from that date
  • 10% for funds deposited from the day after the 60-calendar-day period ends to the end of another 30 calendar days
  • 20% for funds deposited from the day following the expiration of the 30-calendar-day period above to the end of another 30-calendar-day period

Individuals and corporations that apply for this program will be exempt from the imposition of any omitted taxes and fines that may have applied to the declared funds.

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 
  • Pablo Baroffio
  • Juan Ignacio Pernin 
Ernst & Young LLP (United States), Latin American Business Center, New York
  • Pablo Wejcman
  • Agustina Paula Paradiso 
  • Ana Mingramm 
  • 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.