How much are you going to pay for a patent this year in the Autonomous City of Buenos Aires

How much are you going to pay for a patent this year in the Autonomous City of Buenos Aires

The ballots came with increases of up to 100%, due to the increase in the tax valuation of vehicles

An average increase in vehicle prices of the order of 47% throughout 2020 sent car tax valuations skyrocketing this year. As this tax value is the tax base from which the City of Buenos Aires calculates the patent payment for the entire year, the ballots are beginning to arrive with increases of up to 100% depending on the case.

Although the district led by Horacio Rodríguez Larreta adjusted more than 70% of the scales from which the different rates paid by each vehicle are established, a measure that cushioned the impact on the tax costs of having a car based in the City, the increases are considerable.

To know how much a specific car is going to pay, it is necessary to know the tax value of the particular model. Although the Government Administration of Public Revenues (AGIP) Buenos Aires has not yet published the valuations of this year, but the National Directorate of the Automotive Registry (DNRPA) does have a list of valuations updated to January 2021 that can serve as a reference.

The aliquots of the Buenos Aires Patent Tax

The aliquots of the Buenos Aires Patent Tax 

With the tax assessment in hand, the next step is to apply the tax rate. For private cars, motorcycles and trucks there are four scales with different rates, namely: if the tax value is equal to or less than $ 1,600,000, the rate is 3.2%. Between $ 1,600,000 and $ 2,200,000, it becomes 4%. Between $ 2,200,000 and $ 3,200,000, 4.5% and, in the event that the tax valuation exceeds $ 3,200,000, the rate is 5%, as detailed in a chart provided by Sebastián Domínguez from SDC Asesores Tributarios.

For example, in the DNRPA listing it is seen that A 2016 Volkswagen Gol 5-door sedan has a tax value of $ 600,000 at the beginning of 2021. It therefore falls into the lowest rate for vehicles up to $ 1,600,000. Therefore, to obtain how much will be paid annually as a patent, you must multiply the tax value (VF) by the first aliquot (VF * 0.032), that is, 3.2 per 100.

The result, in the case of this model, is that this year the patent will pay $ 19,200 in one year. As it is paid in 6 installments, each one will be worth $ 3,200.

On a higher step falls one of the best-selling models, the Ford EcoSport Freestyle 1.5 liter 0km, to which the DNRPA assigns a tax value of $ 1,795,000. Since it exceeds $ 1,600,000 and is below $ 2,200,000, an aliquot of 4% corresponds to it. As in the previous example, the corresponding calculation is the tax valuation for the aliquot (VF * 0.04) that yields an annual cost of $ 71,800. Equivalent to six bimonthly installments of $ 11,966.

To reach the last aliquot of the Autonomous City of Buenos Aires, the tax value must exceed $ 3,200,000. An example above that level is the Audi A1 Sportback 35 TFSI Stronic 5-door sedan, which is assigned a 2020 model valuation, which is assigned a value of $ 3,388,000. With the 5% rate (VF * 0.05) it shows that the patent payment for this year will be $ 169,400, or six payments of $ 28,234.

What happens in the Province of Buenos Aires?

In the Province of Buenos Aires, meanwhile, the application of the tax is different. As detailed in a table prepared by Lisicki, Litvin and Associates, there are 15 different scales. To the first scale -up to $ 250,000 of tax valuation- an aliquot of 3.554% is applied, while in the rest a fixed fee is paid -corresponding to the previous scales- plus an aliquot on the surplus value that is above the minimum limit of each scale.

Buenos Aires Province scales. Source: Lisicki, Litvin and Associates

Buenos Aires Province scales. Source: Lisicki, Litvin and Associates 

Thus, for example, the same 2016 Gol sedan valued at $ 600,000 in the example cited above would only have to pay the fixed annual fee of $ 28,518, about $ 4,753 bimonthly, because it does not exceed the limit of the ninth level of the scale by one peso. For each extra peso above that minimum of the ninth step, it would have been necessary to pay an extra of 6.111%.

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Ben Oakley
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