experts warn that reaching FCIs is a mistake

This weekend, through a journalistic statement by the National Deputy Carlos Heller, a project by Frente de Todo was revealeds to create an extraordinary tax on large fortunes.

It would be an extraordinary tax on the highest assets, in order to generate financial resources for the State, destined for the health system and tax collection, as a measure before the fall of the economy brought by the Covid-19 coronavirus pandemic.

Also these days circulated through the media and social networks un bill that would be attributed to deputies Alderete and Caliva. It consisted of two chapters, the first being entitled “Emergency Tax on Great Fortunes”.

Without going into the consideration of various aspects that an extraordinary assessment can bring up for discussion, especially when it was created after the moment when the manifestation of wealth took place that is intended to tax, here we want to warn about an aspect that could contradict the spirit that is being pursued.

It would appear that this emergency tax is not intended to reach small savers or the middle class. Neither to small businesses, nor to family savings.

In line with this objective, we highlight that it would be a mistake to consider mutual funds as taxpayers or taxpayers of this tax.

In reality, a common investment fund (FCI) is an estate owned by various people, to which shared property rights are recognized (joint ownership), represented by shares. In accordance with the legislation of our country – Law 24,083 – these funds do not constitute companies and lack legal status.

The legal definition is enough to understand that a fund does not represent a “great fortune”, but rather it is the sum of individual savings of many people.

Investment funds can be open or closed. The former are made up of negotiable securities with public offering and national, provincial, CABA and municipal public securities, currencies (national and foreign), derivative financial instruments, instruments issued by financial entities, among other possibilities provided by current law.

Closed FCIs integrate their assets with authorized assets for open funds, movable or immovable property, securities that do not have a public offer, among other authorized assets.

The funds allow the small saver to access opportunities, assets, advice and professional management of an investment portfolio that would not otherwise be within their reach.

If an extraordinary tax on “large fortunes” considered that mutual funds were taxable – taxpayers – it would be a serious mistake, because in reality small savers and SMEs would be being reached.

The same would happen with other types of collective investment instruments that are considered taxable persons of the tax (eg trusts, associative contracts, joint ventures, collaboration groups, transitory unions, etc.).

Martín R. Caranta
Partner – Lisicki Litvin y Asociados

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