Law 27.260, known colloquially as the money-laundering law, includes significant tax incentives for those having reported the entirety of their assets and who have paid all of their due taxes. In other words, for those not engaging in the illegal act of money-laundering.
There are two main advantages arising from this item of legislation, for law-abiding tax payers:
1) Relief in the Personal Assets Tax: The reduction in the tax on personal assets is a privilege which the individual will have access to during the three following three fiscal years: 2016, 2017 and 2018. The benefit may be significant, even if the law foresees a reduction in the rate for this tax by 0.75% for the year 2016, by 0.50% for 2017 and 0.25% for 2018 and the following.
2) Tax blocking, the “cap” or “bottle-top” law (ley tapón): The incentive consists of granting a general tax waiver on assets in existence as of 31st of December 2015 or which had been previously owned and have been sold or consumed.
In general, payment is exempted for taxes that would have been due for income tax, VAT, private assets and the Tax on Minimum Presumptive Income. The tax payer benefitting from such tax blocking, will also be granted immunity for criminal offences specified by the penal Tax Law (for tax evasion offences) and by Exchange Law (for laws relating to acquisition or sale of foreign currency through the informal market).
The key for the benefit of the tax blocking to work is that the entirety of their private property as of December 31st 2015 arising from the corresponding tax declarations represents the true equity situation of the tax payer, namely, that the tax payer has been completely truthful.
In other words, the question is: What conditions must be fulfilled in order to qualify for the “tax blocking” waiver?
The submission of an affidavit confirming the facts and ratifying that the entirety of assets and holdings possessed on 31st of December 2015 are those indicated in the sworn declarations for the income tax and for the private equity tax or, if the case may be, the tax on minimum presumptive income, corresponding to the last concluded fiscal year.
Additionally, some further conditions are required in order to qualify as a “compliant tax payer”:
*Having reported and paid the sworn affidavits for taxes corresponding to the fiscal years 2014 and 2015.
*Not having been listed in the Cedines laundering program (Legislation 26.860).
*Not having tax debt in executable status conditions.
*Not having been fiscally executed nor convicted due to fines for tax fraud in the years 2014 and 2015.
Now then, can one lose the right to this incentive?
The answer is in the affirmative, as the incentive is not of an absolute nature. The tax authority continues in all of its fiscal capacities and control measures for the years not prescribed, although it cannot formulate adjustments, except in assets not declared by the tax payer for the 31st of December 2015. In this event he or she loses the benefit of the tax blocking waiver, and the tax office regains its right to make any due adjustments for the previous fiscal years not having been prescribed.
Finally, while it is indeed a significant advantage to enjoy a double benefit, namely both tax waiver and tax relief for private equity, for those having fully and correctly complied, we cannot ignore the fact that the benefit of a tax waiver also applies to those entering the laundering program and paying the corresponding laundering fee.
-Those persons joining the laundering program enjoy the advantage of obtaining benefitting from the “Ley tapón” and tax relief for the due tax payments that would have applied to the undeclared assets.
-The compliant tax payer, submitting their ratifying affidavits of equity, receives the “Ley tapón” benefits and the tax relief on relating to private property for the next 3 fiscal years.
-Tax payers not entering the laundering program and furthermore not meeting some requirement such as “good compliant tax payer”: will in this case not receive benefits.
Under these circumstances, the framework has left those individuals in the worst position, who are not required to join the laundering scheme but have been left excluded from the compliant tax-payer regime due to indebtedness, or by having taken part in earlier laundering programs. These are the individuals who must now evaluate the steps they need to take.