Argentina introduces new import/export regime and foreign exchange regulations
During his first week in office beginning on December 10, 2023, newly elected Argentine President Javier Milei introduced significant policies and amendments to the country’s import/export regime, as well as issued new foreign exchange (FX) regulations.
In this alert, we take a concise look at changes within the Argentina import/export space since December 13, with a particular focus on access to the FX market for the payment of imports.
Imports of goods before December 13, 2023
For those imports made until December 12, 2023, the new FX regulations establish that access to the official FX market to make payments in connection with such imports (goods or services) will be subject to previous authorization of the Central Bank (BCRA).
The government is openly trying to block all payments connected to previous imports, and authorities are currently crafting a regularization plan. The plan is expected to be implemented in March 2024.
Import of goods from December 13, 2023
Access to the official FX market without Prior BCRA Approval: Financial entities are authorized to grant access to the official FX market without needing prior approval from the BCRA for deferred payments of new imports.
The schedule is as follows:
a) Fuel and energy: immediate payment
b) Pharmaceutical products used in local processing and manufacturing, as well as fertilizers and phytosanitary products: 30 calendar days from the date of clearance through customs
c) Automobiles and items with certain HTS codes: 180 calendar days from the date of clearance through customs
d) Other items: a) 25 percent after 30 days, b) an additional 25 percent after 60 days, c) an additional 25 percent after 90 days, d) the remaining 25 percent after 120 days
Import of goods – cost of payment
The official exchange rate has been fixed at USD1=AR838.
The PAIS tax must be added to this exchange rate. The new regulations raise the PAIS tax rate from 7.5 percent to 17.5 percent. Therefore, the effective official exchange rate when paying for imports is around ARS984.
Some items, such as certain pharmaceutical products, will be exempted from the PAIS Tax.
For items considered luxury goods (eg, high-end cars, high-end motorbikes, jewelry), the official exchange rate of USD1=ARS838 applies, plus a PAIS tax rate of 30 percent in addition to the 30-percent income tax perception. Therefore, the effective official exchange rate when paying for imports is around ARS1,340.
Import of services
Even if the import restrictions are lifted, restrictions to FX market access will continue. Imports of services performed before December 12, 2023 will require permission from the BCRA, with certain exceptions. A regularization plan is currently being defined.
Import of services from December 13, 2023
The new payment terms are as follows:
a) Immediate payment: transport, traveling, government services, health assistance, payments through credit cards
b) 30 days: other services between non-related parties
c) 180 days: other services between related parties
Import of services – cost of payment
Digital services:
- PAIS tax for digital services: 8 percent
- VAT on digital services: 21 percent
- Income tax perception on digital services: 30 percent
An official exchange rate of USD1=ARS838 leaves an effective exchange rate for digital services of USD1=ARS1,295.
Other services
- PAIS tax – other services: 30 percent
For services in general, the effective exchange rate is approximately ARS1,050. The Executive Branch may modify these figures in the future.
New regulation for exporters of goods
Exporters are allowed to repatriate the proceeds of exports (goods and services) on an 80-20 basis, with 80 percent to be settled through the official FX market at the official exchange rate and the remaining 20 percent settled through the blue-chip swap market (CCL) at the CCL exchange rate, resulting in around USD1=ARS860.
Minister of Economics Luis Caputo revealed in a press conference that new export duties of 15 percent will be imposed. According to Caputo, such 15-percent export duties will be applicable to the export of goods but not services. However, future implementation of export duties on services is not out of the realm of possibility, as such implementation has occurred in the past.
At the time of writing, the export duties on goods have not published at the official gazette. If they are applied, the effective official FX rate applicable to exports would be reduced to USD1=ARS760 (ie, the official FX rate at 80-percent official/20-percent CCL – 15-percent export duty).
Blue-chip swap
Most of the restrictions on operating blue-chip swaps have been lifted. The only restrictions that are still in force are as follows: (i) the securities must be held for one business (ie, parking period) for the securities issued under Argentine law and (ii) the use of the blue-chip swap for carrying funds out of Argentina and for purchasing USD, will prevent the local entities from accessing the official FX market for a 180-day period.
The exchange rate of the blue-chip swap is around 1 USD=ARS1,000. Considering that, with the official exchange rate and the PAIS tax, the effective exchange rate to operate through the official exchange market is 1 USD=ARS984, the gap between the official exchange rate and the exchange rate operating through the blue-chip swap has been reduced significantly.
Payment of dividends
Access to the official FX market for the payment of dividends, in relation to imports performed before December 13, 2023, are subject to previous authorization of the BCRA.
SIRA and SIRASE
The government announced that the SIRA and SIRASE for the importation of goods and services will be replaced by a simpler regime – one that will primarily be for the sake of statistics – and no authorization will be required to import goods and services.
If you have any questions or comments, please do not hesitate to contact the authors.
