Financial Transactions Tax

Information on the tax on financial transactions, with details on when it has to be paid and who has to pay it...

Competitivity Law No. 25,413 (Official Bulletin March 26, 2001) has created a tax on credits and debits in bank checking accounts opened in financial institutions, with the exception of those expressly excluded, as well as the following services:

  • The transactions carried out by financial institutions, in which a bank checking account is not used, no matter how they are called, the mechanisms used to carry them out and their legal instrumentation
  • All the movements or delivery of owned or third-party funds - even in cash - that any person - including financial institutions-  may make on his own account or for the account and/or on behalf of other parties, no matter the mechanisms used to carry them out, how they are called and their legal instrumentation. This apart includes the movements to accredit funds to commercial businesses members of the charge or credit card systems, except the movements or the delivery of funds made as a result of the payroll deposit service for employees

The taxable event will take place as follows:

  • debits and credits to accounts: at the time of making the debit or credit to the respective account.
  • others: at the moment of making the payments, credits or making the funds available. In the case of drafts and transfers, when they are issued.

The general tax rate is 0.6 percent (six per thousand) for credits and 0.6 percent (six per thousand) for debits, except in transactions involving collection management, rendering of collections and payments to commercial businesses member of the credit and/or charge card system - when the revenues from the collection operation, collection and payments are not credited to accounts open in the name of the beneficiaries of the securities or documents and issuers of the management, collection or payment order - as applicable, in which case the tax rate to be levied will be 1.2 percent (twelve per thousand).

The holders of bank accounts levied with the general rate of 6‰ can compute as a tax credit 34 percent of the amounts calculated and received by the related collecting agent as a result of the amounts credited in such accounts.

Additionally, taxpayers subject to the general rate of 12‰ can compute as a tax credit 17 percent of the amounts paid on their own or, as the case may be, calculated and received by the related collecting agent in the light of the referred taxable events. Such amount will be credited as a prepayment indistinctly against income tax and/or minimum presumed income tax.

Information provided by KPMG Contact Fernando Quiroga Lafargue, e-mail, Tel: (011) 4316-5834