b) if the net income range exceeds ARS 5 million but is less than ARS 50 million (approximately USD 500,000), a tax rate of 30% applies to the income exceeding ARS 5 million; and c) if the net income exceeds ARS 50 million, a tax rate of 35% applies to the income exceeding ARS 50 million. d) Stamp Tax. This is a tax levied by each of the provinces in Argentina and the City of Buenos Aires which in broad terms applies over the purchase price or the registered value of the property, whichever is higher. The tax rate varies in each local jurisdiction. Usually, this tax is borne in equal parts by the seller and the buyer. AGENTS. Real Estate agents may be used by either buyer or seller of real estate property, but their participation in real estate transactions in not mandatory. The agent fees are not determined by law and may differ from one jurisdiction to another. Usual fees range from 3 % to 4 % of the purchase price. VI. SPECIAL CASES. a) Frontier Securities Zone Act (Decree 15,385/44 as Amended) (“FSZA”). V. The FSZA regulates the acquisition by foreign individuals or foreign companies of rural real estate assets and certain urban real estate assets located in frontier zones. It also regulates the acquisition of shares in companies which own said real estate assets, as well as corporate restructuring operations of said companies. The regulation of the FSZA considers the following to be foreign companies: (i) companies incorporated abroad from

Argentina, (ii) companies incorporated in Argentina, in which foreign companies or individuals hold the majority stake or have sufficient votes to make decisions in shareholders’ meeting; and (iii) companies in which foreign shareholders own more than 25% of the corporate capital. Under the FSZA, all acquisitions of real estate assets located in frontier zones or shares of companies which own said assets require clearance from governmental authorities, with the exception of assets located in certain cities or urban assets which have a surface of less than 5,000 square meters, must be previously approved by the Internal Affairs Secretary. In order to obtain said approval, foreign companies must make a filing with the Internal Affairs Secretary, including certain forms provided by said governmental entity, certain corporate information (e.g., corporate bylaws, appointment of board members, latest financial statements, identification of shareholders), certificates of criminal record of the board members and an investment project to be conducted in the real estate property to be acquired. The filing should be made by the investor. The authorization is granted by way of exception and depends on showing that the investor (or its shareholders and officers) has not been convicted of crimes affecting national security and proposing an investment project for the development of the acquired real estate asset. The investment project is analyzed in the light of the following criteria: (i) that the project is declared of national, provincial, or municipal interest by the competent authority; (ii) purports to the social and economic development of the region where it is located; (iii) it will be implemented in

ILN Real Estate Group – Buying and Selling Real Estate Series

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