Legislation
Argentina – Buenos Aires tax deal suspended
By Phil - 20 December 2013
An agreement which would have seen the casinos located in capital Buenos Aires being let off billions of pesos in back taxes has been suspended by a local judge.
Judge Elena Liberatori has filed an injunction against the new law suspending clause 3.2 of the agreement which would have let local operator Casino Club off a massive $2.4bn pesos in back taxes.
The Buenos Aires Justice filed an injunction that restrains one of the clauses of the agreement which benefits gambling entrepreneur Cristóbal López whose company Casino Club has the right to run the slot machines in the racino in downtown Buenos Aires and has a significant share of the floating casinos moored permanently to the city harbour. The complaint was filed by constitutional lawyer Andrés Gil Domínguez. The suspension of the bill was justified as the new law included a clear waiver when it came to the paying of back taxes for casinos in the city.
According to the new act, which was passed by a majority of 42 votes to 15 votes, beginning in 2014 the city of Buenos Aires will receive additional $300m pesos annually from casinos in the city. In addition, the agreement provides that the National Lottery will also transfer an additional fee which will be paid by gaming operators which will be the equivalent of 3 per cent of the net profits generated by both the floating casinos and the slots based in the Palermo Racetrack. In return, the measure contained an exemption from the payment of gross income tax for the gambling establishments based within the city limits and clause 3.2 ruled that the casinos would no longer have to pay a debt of between $1.5bn pesos and $2.4bn pesos in gross gaming back taxes.
There has been growing speculation over the new agreement after Mayor Mauricio Macri seemed to deny reports last week that the new deal struck between the city and the national government would allow gaming operators to avoid paying years of back taxes on gross gaming tax revenue tweeting: “The City would not overlook the debt of gaming companies.”
Gaming has long been a controversial issue in the capital and it was believed that the deal, which was struck quickly and without going through the committee stage, might have finally resolved the long standing dispute. However, the suspension of clause 3.2 of the agreement means that an entirely new agreement may have to be reached before the issue is finally resolved.
