On September, 21, 2018, the State of Rio de Janeiro published Supplementary Law n° 182, by means of which the state has granted reductions of amounts due as penalties and interest related to debts of ICMS (Brazilian VAT), motor vehicle taxes (IPVA) owed by individuals, and penalties applied by the State Court of Auditors, assessed or not, enrolled or not as overdue tax liability debts, whose expiration dates occurred up to June 30, 2018.
Read more here.
By: Augusto Nicolás Mancinelli
Argentina’s new Law 27,430 introduces a new taxable event: a Value Added Tax (hereinafter VAT) applicable to the importation of “digital services” rendered by a non-resident to a resident individual or entity when the effective use or exploitation of the service is carried out inside Argentina.
An earlier regulation, Decree 354/2018 of April 23, 2018, a deficient attempt to regulate the VAT applicable on digital services, was recently repealed.
According to the current wording of the VAT Law and its Regulatory Decree, VAT applicable to the importation of digital services has the characteristics that are detailed below.
By: Augusto Nicolás Mancinelli
The Argentine executive branch has established new export duties applicable to goods and services. These new export duties were established by a Decree of the Executive Power (Decree No. 793/2018) issued on September 3, 2018 and published at the official Gazette on September 4, 2018, with immediate effect for the export of goods.
The effective date for the application of export duties on services is expected to be January 1, 2019, as the government would need Congress to enact a law providing for such export duties.
The new export duties on goods and services are among the measures being applied by the Macri Administration with the goal of reducing Argentina’s fiscal deficit.
The new export duties, which amount to 12 percent of the value of the exported goods and/or services, include a cap of AR$3 or AR$4 for each US dollar of exports, depending on the kind of exported good or service. These new export duties apply in addition to any other export duties already in force.
The authority of the executive branch to create or impose taxes or import/export duties without Congressional approval is questionable. Although the Argentine Customs Code provides the executive branch with wide power to establish import/export duties, such delegation has been challenged before the federal courts on constitutional grounds.
The Argentine Federal Supreme Court, in its ruling in Camaronera Patagónica, dated April 15, 2014, established that the executive branch is not entitled to create or impose taxes or export duties, even when reasons of urgency, crisis or financial needs are invoked, claiming that, pursuant to the Argentine Constitution, taxes fall under the scope of the legislative branch’s authority, not the executive’s.
DLA Piper Argentina’s tax team has initiated a protective action (amparo) and requested an injunction before the federal courts, in order to challenge the constitutionality of Decree No. 793/2018.
The financial press continues to portray Argentina as another emerging-market casualty. But, to the contrary, there are a number of positive financial signs, for investors, the country and the marketplace, in today’s Argentine economy.
In fact, President Mauricio Macri’s Administration has put in place a number of fiscal policies and governmental reforms that will have a positive long-term impact, and the country is already beginning to reap benefits from these changes.
In this economic briefing, we review the most notable of these developments
Find out more about the current state of the marketplace in Argentina and the implications of these developments by contacting the author.
By: Felipe Bahamondez and Paulina Farias
Published by: Getting the Deal Through
Act No. 19,886of 30July2003about the Administrative Contracts Bases for Supply and Provision of Services (Act No. 19,886/2003) (the Act), and its regulation, Decree No. 250of 24September2004, set the basic rules for the procurement of goods and services by public entities.
The Act establishes, as a general procurement rule, the public bidding system, but in exceptional cases a public entity may contract through a private bidding process or through a direct deal.
In the construction field, Decree No. 75dated 1December 2004 (Decree No. 75/2004) and Decree No. 48dated 9September 1994 (Decree No. 48/1994), both issued by the Ministry of Public Works, establish special procurement rules that apply to the construction of public works and public works advisories.
The energy supply services executed by the public distribution service’s concession companies are also governed by a specific statute, regulated in the General Act for Electric Services (Force of Law Decree No. 4, dated 5February 2007) and its regulation, approved through Supreme Decree No. 106of 2005.
Additionally, the assignment of concessions by public bodies is subject to special statutes, regulated among others by the following acts:
Read more here.
Guest post from our friends at Bergstein Abogados
Uruguay requires online companies incorporated abroad, with no presence in Uruguay, to pay taxes in Uruguay whenever their clients are located within Uruguayan territory. Online services providers (such as Netflix and Spotify) are subject to VAT at the rate of 22 percent, plus Non-Residents Income Tax (so-called IRNR) at the rate of 12 percent, both assessed over the sales price. Online services intermediaries (such as Airbnb) are subject to the same taxes, except that IRNR is assessed only over 50 percent of their sales where one of the parties of the ultimate transaction (the supplier or end-user) is based abroad.
In May this year, Uruguay’s Executive Branch issued a regulatory decree, summarized below, clarifying aspects of the tax law; and a few days ago, the Tax Office issued a special resolution spelling out certain implementation details. Continue Reading
Brazil has taken a significant step to protect the personal data of Brazilians with the enactment of the first specific law on the subject. Bill of Law 53/2018, approved by the Senate on July 10, 2018, will be sent to the President for signing into law. The President will have 15 business days to sign it, but it is not yet clear whether whether any particular items in the law will be vetoed. After presidential signing, the law will take effect 18 months after its official publication.
Here are the main points of the law in the form approved by the Senate:
treatment of personal data (i) carried out by individuals for private purposes; (ii) performed for journalistic, artistic or academic purposes; (iii) carried out for purposes of public safety, national security and defense or activities for investigation and deterrence of crimes (which will be the subject of a specific law); or (iv) with foreign provenance and that are not the target of communication, shares use with Brazilian data treatment agents or the object of transfer of data with another country that other than the country of provenance, provided such country provides a degree of protection adequate to the Brazilian Law.
data” is defined as any data or information related to an identified or identifiable individual (called the “owner”), with “sensitive personal data” being data about racial or ethnic background, religious belief, political opinion, membership labor unions or religious, philosophical or political organizations, as well as referring to health or sexual life, genetic or biometric data.
be all operations carried out with personal data,
such as collection, production, reception,
classification, utilization, access, reproduction,
transmission, distribution, processing, filing,
storage, elimination, evaluation, control,
modification, communication, transfer, diffusion or extraction of data or information.
Treatment agents: Agents fall into two categories: “controller,” defined as any individual or public or private legal entity responsible for the decisions related to the treatment of personal data, and “operator,” defined as the individual or legal entity that carries out the treatment of personal data at the behest of the controller.
creation of a National Data Protection Authority, a body of the indirect federal public administration, subject to a special independence regime and linked to the Ministry of Justice and the National Council for Protection of Personal Data and Privacy; among its responsibilities are to propose strategic guidelines; provide support for the formulation of the National Policy on Protection of Personal Data and Privacy; suggest actions and propose studies.
Principles: Important principles must be observed in treatment activity, such as:
(i) purposes − the treatment must be carried out for specific and legitimate purposes, without the possibility of subsequent treatment in a form incompatible with these purposes
(ii) adequacy − compatibility of the treatment with the purposes reported to the owner
(iii) need − limitation of treatment only to the extent necessary to achieve expressed purposes
(iv) free access − guarantee that the owners can consult, easily and at no cost, on the form and time frame of the treatment, as well as the integrity of their data
(v) quality of the data − guarantee of the precision, clarity, relevance and currency of the data
(vi) transparency − guarantee of clear information that is easily accessible by the owners
(vii) security − utilization of technical and administrative measures to protect the data from access by unauthorized parties
(viii) prevention − adoption of measures to prevent the occurrence of damages due to treatment of personal data
(ix) nondiscrimination − impossibility of treatment for purposes of discrimination and
(x) accountability − demonstration of effective means to observe and prove compliance with the rules on protection of personal data.
comply with a legal or regulatory obligation of the
controller; (iii) by the public administration, for treatment of data necessary for public policy purposes; (iv) for the purposes of study by a research entity, with guarantee of anonymization; (v) when necessary to perform a contract; (vi) for regular exercise of rights in a judicial, administrative or arbitral proceeding; (vii) for protection of the life or physical integrity of the owner or third parties; (viii) for protectio n of health, through a procedure carried out by professionals in the area of public health of by sanitary authorities; (ix) in the legitimate interests of the controller or third parties; and (x) for protection of credit.
writing (in the case of a contract, highlighted with respect to the other clauses) or by other means that demonstrate the manifestation of the owner’s will, with the controller having the burden of proving consent was obtained pursuant to the law. Generic consent will be deemed null and void, and treatment in cases of defective consent is forbidden.
Revocation of consent: Consent can be revoked at any time, by the owner, with ratification of any treatment performed under the consent provided previously.
of treatment; (ii) access to data; (iii) correction
of incomplete or inexact data; (iv) anonymization, blockage or elimination of unnecessary or excessive data; (v) portability of the data; (vi) elimination of personal data treated with consent; (vii) information about the public or private entities with which the controller has carried out shared used of the data; (viii) information about the possibility of not providing consent and the consequences of denial; and (ix) revocation of consent.
when the purpose has been attained or the data cease being necessary or pertinent; at the end of the treatment period, by communication from the owner; or by determination of a national authority. The data must be deleted after the end of the treatment, other than in case of specific exceptions.
Treatment of data by the public authorities: The treatment must be performed only to serve the corresponding public purpose and with the objective of satisfying the legal attributions of the public service, with observation of the conditions determined in law.
personal data to other jurisdictions will be allowed only in cases set forth in law, such as (i) with the specific consent of the owner; (ii) to satisfy a legal or regulatory obligation, when necessary to perform contracts or for regular exercise of rights in a judicial, administrative or arbitral proceeding; (iii) to countries or international organizations that provide an adequate degree of protection of personal data as specified in law or determined by the competent entity; (iv) when the controller of the data proves it has guarantees of compliance with
the principles, rights of the owner and data
protection regime set forth in Brazilian law; (v) for protection of the life of physical integrity of the owner or a third party, among other situations.
Chief of treatment: the Chief of Data Treatment is the person responsible for accepting complaints and other communications from the data owner and competent authorities and for training employees about best practices, among others attributions. The Chief must be appointed by the controller and his/her identity and contact information must be disclosed clearly and objectively.
exceptional cases identified in law, the operator and controller are deemed to be jointly and severally liable for the data with respect to pecuniary or moral damages, either individual or collective, caused by the date treatment.
technical and administrative security measures to protect the personal data from unauthorized access and accidental or illicit situations of destruction, loss, alteration, disclosure or any other form of inadequate or illicit treatment. The minimum technical standards must be disclosed by the competent body in a timely way, considering the specificities of the personal data and their treatment.
applicable administrative penalties by the
competent body, after an administrative proceeding that affords rebuttal and ample defense. Among the penalties are official warning, publicity of the infraction, partial or total suspension of use of the use of the database, single or daily fine (up to 2 percent of the gross revenue of a private company, business group or conglomerate in Brazil in the preceding year, excluding taxes, capped at R$50 million per infraction), or partial or total suspension of the activities related to the data treatment.
We will be monitoring this area of law to keep you informed about coming developments.
FOR MORE INFORMATION PLEASE CONTACT THE AUTHOR
T: +55 21 3262 3028F: +55 21 3262 3011
The State of Rio de Janeiro enacted the Resolution n° 265 on June 19, 2018, in order to allow taxpayers to regularize their tax debts before starting an official tax audit and to reduce the amount of credits in dispute before the administrative court.
The proceeding is called a “friendly warning” and encompasses tax debts not yet declared in ancillary obligations and also ancillary obligations not yet presented to tax authority by the taxpayers. Tax authority identifies possible outstanding tax debts and ancillary obligations not yet fulfilled by crossing electronic data available in its systems. Continue Reading
The Brazilian Government has enacted Decree No. 9,422/2018, which introduced into Brazilian law the Agreement on Social Security between the United States and the Federative Republic of Brazil, originally signed on June 30, 2015.
The Agreement was enacted in late June 2018; its enforceability shall commence on October 1, 2018 and shall be applicable to (i) individuals currently or previously covered under US or Brazilian laws, and/or (ii) individuals who, under the laws of either contracting state, may derive rights by virtue of their relationship to an individual subject to the laws of the US or Brazil. Continue Reading
The State of Rio de Janeiro has enacted Law 7,988, effective from June 14, 2018, in order to grant powers to its state tax auditors to reject operations or transactions performed by taxpayers who are suspects of intending to disguise tax-triggering events or the features of the tax liabilities during the course of tax audits.
Law 7,988/2018 was enacted to regulate the sole paragraph of Section 116 of the Brazilian National Tax Code which Brazilian courts have declared by decisions not self-applicable.
The most relevant taxes entitled to be collected by states in Brazil are VAT (the so-called ICMS) and the Tax on Inheritance and Donation of any property or right (ITCMD).
Law 7,988/2018 sets forth requirements that shall be fulfilled by state tax auditors to reject operations or transactions performed by taxpayers:
If the state tax auditors decide to disregard operations or transactions performed by taxpayers, they must (i) detail the elements considered as performed by the taxpayers with the intent to disguise tax-triggering events or the features of the tax liabilities and (ii) describe the acts and transactions to be taxed, citing applicable legislation.
Moreover, the state tax auditors shall present the impacts of the disguised tax triggering events or the features of the tax liabilities with the specification of taxes to be levied, calculation basis, applicable rates and legal accruals.
Taxpayers will have the right to present defenses and appeals against a tax assessment notice issued by the state tax auditors.
Law 7,988/2018 entered into force on June 15, 2018.
The issuance of Law 7,988/2018 strengthens the need for technical support to address tax audits, in order to highlight the business purposes of operations and transactions and to ensure that taxpayer rights are respected by the tax authority.
For more information please contact the author
Renato Lopes da Rocha
T +55 11 3077 3593
M +55 11 97269 2831
M +55 21 99610 1172
Av. Presidente Juscelino Kubitschek, 360 – 10º andar
Vila Nova Conceição – São Paulo, SP – Brasil 04543-000
