Introduction to Taxes

Argentina has both federal and jurisdictional taxes. The federal taxes are VAT, Income Tax and Bank Transaction Tax. These taxes are set at a national level and allow for full or partial exemptions by customer, Bank Transaction taxes allow for executions by account. The jurisdictional taxes are Stamp tax and Turnover tax and the tax rates for these are set at the province level and can have full or partial exemptions by customer.

Click here to understand the terms and abbreviations used in this module.

Stamp, VAT and Transaction Tax

The Argentinian regulation includes the collection of five taxes, two with a jurisdictional scope, and three with a national scope. This functionality covers three taxes: stamp tax that is jurisdictional, VAT and bank transactions taxes that are national. All these taxes are for customers who are residents in Argentina.

The stamp tax is applied on account debit balance or debit interest capitalized, loan disbursement, repayment or renewal, and deposits redemption. Rate on the tax may depend on tax jurisdiction of the customer.

The VAT is always applied with reverse withholding method, which is normally the service fee + tax. When a customer’s transaction is applicable for VAT, the padrones are checked for specific or full exemption for the customer. If there is no information for a specific taxpayer, it is considered that the customer has no exemptions and default VAT rate of 21% is applied.

The Bank Transaction tax is calculated on debits and credits transaction in the customers’ account. The tax rate depends on different transactions in accounts which can be originated from accounts, loans, and deposits. There are two padrones that are checked in order to identify if a customer is totally or partially exempt. When the customers are totally exempted, the tax is not calculated, but if they are partially exempted, the tax is applied with a reduced rate. In addition, there are exemptions that is considered: transactions on salary accounts and transactions generated between accounts of the same owner.

Configurations of new fields, taxes, and products are necessary.

Turnover Tax

The Argentinian regulation includes the collection of turnover tax, which is a jurisdictional tax. The turnover is applied to taxpayers (individuals and entities), residents in Argentina conducting business, in any of the tax jurisdictions or under multilateral compact rules. This tax applies in general for all the credits done in one account. Padrones per jurisdiction are checked which determine:

• If a customer is exempted totally or partially based on if, the customer has multilateral agreement, and accordingly tax rate applied.
• For customers who are not in the padron, a general rate is applied.

Configurations of new fields, taxes, and products are necessary to use the functionality for this tax.

Interface to Padron Data

The regulatory institutions in Argentina handle administrative records, named padrones with specific conditions for taxpayers. This information must be considered during tax collection to apply rates and exemptions properly. The national and jurisdictional taxes have their own padrones.

This functionality includes the implementation and management of the information received via padrones from regulatory institutions in Argentina, the amendment of customer data from padrones, and the input of manual exemptions. Five padrones related to VAT, bank transactions and turnover tax (collection) for Buenos Aires jurisdiction are in the initial scope and later more padrones can be added. The solution considers that the five padrones are uploaded by the bank to an external server to Temenos Transact. These padrones through ETL are converted into 3 flat files with specific formats, one for VAT, one for bank transaction, and one for turnover tax.

Microservices and other technical components are used to process information of padrones. This information is stored in Temenos Transact in one application with all the padron details for VAT, bank transaction and turnover tax. In addition, a menu option, an enquiry and a version are available to allow the user to input manual exemptions which data is stored in the same application that has details of padrones.

Tax Returns

Argentinian regulation includes different taxes that could apply to same transaction or event. The bank has supplementary requirements on ARMB Taxes, which includes tax returns. It is the returning of money to OB customers, based on the information received via the padron file from AFIP and jurisdictional tax regulators in Argentina. In addition, tax return based on exemption certificate presented by customer. Argentinian banks per regulation requires refunding of taxes to customers.

The turnover tax has his own return padron. This padron has the amount per customer that has to be refunded to the customer. It is required to check this padron which determines:

• The amount to refund to a customer.
• For multilateral this amount comes in negative.

Additionally, the tax return can be based on exemption certificate presented by customer.

Return All Taxes in a Period

The tax in Argentina has a general method to be calculated, but specific contributors are categorized as exempted or with different tax rates.

This categorizations are published by the tax authorities, nationals or jurisdictional, at contributor level, (CUIT, CUIL or CDI) through periodic files called padrons.

Padrons are published by the regulators, including information for contributors.

The new functionality includes the automatic process of padrones from Catamarca, Salta and Tucuman that request to return all the debits performed for a specific tax, a specific client and in a determinate period.

In this case, Temenos Transact will identify all the debits performed in this period, for the specified client for the specified tax.

For return taxes, up to now, only Buenos Aires, Catamarca, Salta, Tucuman and multilateral agreements have implemented padrones for this purpose. The rest of the jurisdiction must be managed into operational procedures.

For different reasons, the tax authorities have to return the incorrectly collected taxes. Due to this, the mentioned tax jurisdictions request banks to return the amount collected for these incorrect taxes to their customers.

In both cases, by considering padron or manually, Temenos Transact must check the previous tax withhold under claim.

The ARTAXS.RETURN.TAX.FILE.DETAILS application is released to store the details of the return padron files.

The ARTAXS.RETURNS.FILE.PROCESS.STATUS enquiry checks the status of the processed file for each file type and the ARTAXS.RETURNS.AUTOMATIC.STATUS enquiry checks the status of the upload of each file type.

Tax Concepts View in Loans

This functionality allows the user to view in the arrangement overview the VAT and stamp tax amount.

For the above, a copy of the payment schedule enquiry is created, and new routines extract information in order to show the tax value in each installment.

According to the definition corresponding to VAT and stamp taxes, these are reflected in the arrangement overview in order for the user to visualize the correct application of the tax.

The Payment Schedule enquiry is released (AA.DETAILS.SCHEDULE.AR) and when the charges are configured as tax, they are moved to the Tax column and projected for future due dates. Each tax will be displayed separately in the schedule.

Income Tax of UVA Deposits

In Argentina, where the local currency suffers a significant increase in the inflation rate every year, the UVA (Unidad de Valor Adquisitivo) tool is used to measure the money purchasing value. UVA helps customers to not lose money. According to the regulation, the income tax is applied on the interests generated in UVA for fixed term deposits. To handle this tax, there are three padrons involved, which must be downloaded manually from the tax authorities websites. The rate to calculate this tax depends on the information that a customer has in the related padrons.

Income tax is a national tax for residents in Argentina that must be calculated over the interests paid to the customers that have UVA fixed term deposits. This tax must be calculated when the credit interest amount is greater than 240 Argentinian pesos and the deposits reach the maturity date. For early redemption deposits in UVA, income tax is not applied.

It is possible that a customer has exceptions in the tax rate that will be applied when calculating income tax. The information to identify these exemptions comes through three padrones, each one with a specific format:

• AFIP contributor’s padron: Indicates the general rate to be applied for a customer.
• RG268: Indicates if a customer is fully exempted.
• RG830: Indicates if a customer is partially or temporarily exempted.

The key to access the information in these three padrons is the customer’s CUIT.

The AFIP contributor’s padron has information regarding income tax in the Imp Ganancias field which has a code with one or two letters that are related to tax rates:

Value in the Imp Ganancias field	Rate to apply
NI	10,00%
N	10,00%
AC	3,00%
S	3,00%
EX	0,00%
NA	0,00%
XN	0,00%
AN	0,00%
NC	0,00%

It is not necessary to check any date in the AFIP contributor’s padron.

For RG2681 and RG830, it is necessary to check the start date and end date provided for the customer’s exemption, and if it is a valid period, the full exemption or the tax rate provided respectively has to be applied.

A customer can or cannot have a record in any of these padrons, and depending on it, the rules to apply the rates vary. These are the possibilities:

1. When a customer has a record in RG2681, it means this person is fully exempted.
2. When a customer has only a record in the AFIP contributor’s padron, it is necessary to convert the value in the Imp Ganancias field to the rate to apply.
3. When a customer has a record in AFIP contributor’s padron and in RG830, it is necessary to convert the value in the Imp Ganancias field in AFIP padron to the rate to apply and reduce the rate that is in RG830.
4. When a customer has a record in RG830 only, it is necessary to reduce from the standard rate of 10% the rate that is in RG830.
5. When a customer does not have a record in any of the padrons, the rate to apply is the standard rate of 10%.

Different Calculation Base by Jurisdiction for Stamp Tax

Temenos Transact needs to calculate the stamp tax for the non-instrumented loans considering the tax calculation base depending on the customer’s jurisdiction. The possible tax calculation bases are the outstanding principal amount, the principal amount and the principal amount in instalment.

This functionality allows the system to calculate the stamp tax for non-instrumented loans considering the tax calculation base given by the customer’s jurisdiction. The possible tax calculation bases are the outstanding principal amount, the principal amount and the principal amount in installment.

Three different variations are created, one per calculation base, which are assigned to the jurisdictions in the PROVINCE virtual application.

Three eligibility rules are also created, one per calculation base, to verify the variation returned from the system. Then, it is assigned to the arrangement during its creation.

A charge property is created to be used later in the payment schedule.

An activity charges property is created to set the variations supported property type and be able to use variations.

A payment type is created to allow the system to combine bills at parent level and to be used in the payment schedule.

The adjustment routine to calculate the tax is modified to identify the tax calculation base to apply.

The product for non-Instrumented loans is configured to handle the three variations defined, assign to the arrangement the variation configured for the customer’s jurisdiction and calculate the tax with the corresponding tax calculation base.

To cover the stamp tax calculation with the calculation based by jurisdiction, the following items are created:

• Three different variations, one per calculation base, each one assigned to a jurisdiction in the PROVINCE application.
• A routine to check the customer’s jurisdiction and obtain the variation that corresponds to the calculation base set for that jurisdiction.
• Three eligibility rules, one per calculation base, to verify the variation returned from the system, which is assigned to the arrangement during its creation.
• A charge property is created to be used later in the payment schedule.
• An activity charges property is created to set the variations supported property type and be able to use variations.
• A payment type is created to allow the system to combine bills at parent level and to be used in the payment schedule.

In addition, the system is enhanced to calculate the stamp tax based on the three variations of the tax calculation bases, and the settings in AA for the AR Loans product group and non-instrumented loan product are changed. Depending on the variation assigned to an arrangement, the specific settings for the charge will be used to calculate the stamp tax

Mapping of AFIP Padron for VAT, Income and Turnover Tax

This functionality allows banks to upload the padron files, store them in the Padron Microservice Database and send it to Temenos Transact. The padron data will be added the customer’s records so that the data is available for the calculation of the following taxes: Value Added Tax (VAT), Income Tax, Perception and Retention tax. This functionality also provides the calculation for the Generic VAT.

VAT (Value Added Tax) is a national tax in Argentina, calculated over the added value in purchased operations in products or services.

This generic VAT applies on customers that are residents in Argentina, and there are no differences depending on customer’s address jurisdictions. It is collected on interest (payable and receivable), commissions, and charges on the customer’s accounts. Also, there is a perception VAT to be applied under specific conditions and it can be exempted based on the related RG17 padron file.

In addition, in Argentina, where the local currency suffers a significant increase in the inflation rate yearly, UVA (Unidad de Valor Adquisitivo) is used, which is a tool to measure the purchasing value that money represents. UVA helps customers not to lose money.

According to the regulation, there is another national tax named Income Tax that is applied on the interests generated in UVA fixed term deposits. To handle this tax, there are three padrons involved, which must be downloaded manually from the Tax Authorities websites. The rate to calculate this tax depends on the information that a customer has in the related padrons.

On the other hand, the Turnover Tax is a jurisdictional tax charged to any person (physical or juridical) that performs an economic activity (including freelancers and companies) and its fiscal residence is any province in Argentina.

There are 3 different roles or regimes that need to be considered for the management of the Turnover Tax: Collection, Perception and Retention role.

Finally, there is some specific information on AFIP padron that will affect VAT (Generic and Perception), Income Tax and Turnover (Perceptions and Retentions).