December 6, 2007

Argentina legislature passes retroactive grain export tax
 

Argentina's House of Representatives voted on late Tuesday (December 4, 2007) to invalidate grain export declarations made prior to a recent increase in the export tax when the exporters can't show they bought the goods already.

The bill, which now passes to the Senate for debate, aims to prevent exporters from avoiding higher export taxes in place when they actually ship the goods.

Exporters raced to declare export commitments last month amid speculation the government was poised to raise the export tax on soy products and other grains.

Exporters must make a sworn declaration to the government of an export sale before shipping the goods. A reference price for tax purposes and the applicable tax rate are locked in once the company declares a shipment.

On November 7, the government raised the export tax on soy to 35 percent from 27.5 percent and the tax on soyoil to 32 percent from 24 percent. Wheat export taxes were raised to 28 percent from 20 percent, while the tax on corn rose to 25 percent from 20 percent.

Prior to the tax increases, exporters had declared 2007-08 soy export commitments of 8.6 million tonnes, up from 2.3 million tonnes of new crop export declarations at the same time last year.

New-crop soymeal export commitments totaled 8.2 million tonnes, up from 1.7 million tonnes a year ago, while 2007-08 soyoil export declarations reached 2 million tonnes, up from 777,462 tonnes.