New Retention Obligations for Virtual Wallets Res. AFIP No. 4622/2019

Through General Resolution 4622/2019 of the General Administration of Public Revenue (“AFIP”), retention regimes were established in the Income Tax and the Value Added Tax (“VAT”) charged to those who administer virtual wallets, defined as electronic payment services and / or collections on behalf of third parties, including through mobile devices and / or any other electronic support, including virtual ones.

The withholdings will be applicable on the liquidations made by the holders of the virtual wallets to the merchants, locators or service providers for the use of said payment systems.

In this sense, merchants, tenants or service providers that have the character of those responsible for VAT as those who do not accredit said condition, or who are exempt or not reached will be subject to retention. Merchants, tenants or service providers that are attached to the Monotax will not be liable to withholding. Nor will those who accredit their quality of «Micro Enterprise» or «Potential Micro Enterprise» be subject to withholding.

The VAT withholding rates vary from 0.5% to 10.5%, depending on the merchant’s condition, lease or service provider, and its commercial activity. The withholding corresponding to the Income Tax varies between 0.5% and 2% depending on the situation of the merchant, tenant or service provider in the VAT.

The retention regimes mentioned will enter into force on November 19, 2019.