ARGENTINA moved in May to subject foreign shareholders of Argentine companies to personal assets taxes on their shares.

Shares issued by Argentine companies and owned by nonresident legal entities on December 31 each year will be subject to a 0.5% tax on the percentage they represent of the net equity of the company, according to Maximiliano Batista with Perez Alati, Grondona, Benites, Arnsten & Martinez de Hoz in Buenos Aires. Argentine companies will be responsible for collecting the taxes from shareholders. The new law is expected to have a significant effect on Argentine utilities that were sold to foreign investors in privatizations in the 1990’s. The tax is not creditable against income taxes in the United States.

Keith Martin