Building whitewash: 10 keys to know if it is appropriate

Pending the regulations of the AFIP and the Central Bank, the Executive Power has advanced in regulating the new version of money laundering in the construction sector.

Sebastián M. Domínguez, CEO of DSC Tax Advisors, develops the The keys to keep in mind in this second phase of money laundering (the first was not very successful).

Below are the most relevant aspects of the extension provided for by Law 27.679 and the provisions of Legislative Decree 556/2022, published on Tuesday in the Official Gazette.

1. What kind of goods can I recycle?

According to Law 27.613, the modification envisaged by Law 27.679 and the provisions of Legislative Decree 556/2022, it is possible to recycle foreign currency and / or national currency in the country and / or abroad which had not been declared as of 12 March 2021 by fiscally resident subjects pursuant to the IRPEF regulations as of 22 August.

2. What is the special tax I will have to pay for money laundering?

The tax to be paid it will depend on the date in which the funds are deposited into the special deposit and cancellation account for the Argentine construction (CECON.Ar), according to the following detail:

Consequentially, the biggest advantage Those who deposit the funds will have them until November 19, when they pay the 5% rate.

3. Can I pay the special tax with laundered funds?

No, It is not possible pay the special tax with laundered funds.

4. At what exchange rate do dollars have to be converted into pesos to calculate the special tax?

The recycled foreign currency must be converted in pesos at the exchange rate for the purchase of the Banco de la Nación Argentina on the day the funds are deposited into the Argentine Construction Special Deposit and Cancellation Account (CECON.Ar).

5. How much time do I have to invest the laundered funds in real estate projects?

Laundered funds must be invested in real estate projects by 31 December 2024or until 30 December 2024.

This is good since there is a horizon of more than two years for the development of real estate projects.

6. Can I invest in any real estate project?

The real estate projects eligible for investment are those to which they correspond from 12 March 2021 the new private works started (constructions, extensions, installations: among others) and which, in accordance with building regulations or similar provisions, are subject to complaint, authorization or approval by the competent authority.

Also included are those new private works that, at that date, they had a degree of progress of less than 50% completion of the works.

real estate projects must be registered in the Real Estate Project Register (REPI) and each of them be identified through the Real Estate Project Registration Code (COPI).

7. Do I have to invest all the laundered funds at once or can I do it step by step?

Laundered funds can be invested in multi-stage real estate projects, that is partially.

This allows you to make an investment in a real estate project in a well, through which the installments under development are paid.

8. Can I launder funds and benefit from the exemption and payment of down payments on personal property?

No. Those who adhere to money laundering are not entitled to the benefits of the personal wealth tax exemption or to the payment of the advance of that tax for investments made.

9. Is it convenient to launder pesos or dollars?

It is convenient to launder dollars instead of weights.

Let’s look at an example of one person recycling $ 200,000 and another person recycling $ 58,400,000 (“dollar free” exchange rate of $ 200,000 x $ 292): the person who launders $ 200,000 deposits the funds. today and must convert them to pesos at the exchange rate of 138.12 = $ 27,624,000. The 5% tax, totals $ 1,381,200.

Instead, the person who lays $ 58.4 million must pay 5%. amounts to $ 2,920,000.

That means, 211.41% more for laundering pesos instead of dollars.

This will likely result in those who want to launder pesos end up resorting to converting them into dollars through the illegal market for their subsequent laundering.

Operations of this type, even when illegal, they can press for a free or blue dollar raisewhich is seen to intensify towards the date on which the first phase of recycling ends, that is on November 19, 2022.

10. What is the true cost of money laundering?

If dollars are laundered, as these are converted into pesos at the official exchange rate, the real cost is lower than the tariff of the special tax.

In the example above we saw that if $ 200,000 is laundered, the fee is $ 1,381,200.

Considering that the “MEP Dollar” is trading at $ 283, we could indicate that the real cost of recycling would be 2.44% according to the following calculation:

$ 200,000 x 283 = $ 56,600,000

$ 1.381.200 / $ 56.600.000 = 2.44%

“The final unknown is whether this extension of money laundering will be successful,” says Domínguez. “In our opinion, the economic and political crisis that Argentina is experiencing, together with the lack of legal certainty and the absence of a modification of the rental law, generates a environment that does not favor the success of money laundering “.

“Anyway,” he adds, “it could be a useful tool for those with undeclared money and in need of a homesome departments to obtain an income or for those who have had an account abroad following the automatic exchange of banking information that Argentina receives and who want to regularize their situation “.

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