December 14, 2017

Controls may affect argentines

Wednesday, August 27, 2014

Uruguay bans all cash payments over US$5,000 as of next year

Uruguay yesterday sanctioned its Financial Inclusion Law, which will ban cash payments worth more than US$5,000 as of May 1 next year. Property transactions and car purchases will thus have to be made through banking mechanisms.

The measure will affect thousands of Argentines who have snapped up properties across the River Plate, primarily in the summer-favourite destination of Punta del Este.

According to Uruguayan daily El País, if a property is bought with funds located in another country, deeds will have to include details on how the transaction was made, including account numbers and the names of the buyer and the bank where the funds came from.

The recipients of income from rent contracts already in place before May 1 of 2015 will have to declare a bank account to which the funds should be deposited.

Management firms,’ lawyers’ and notaries’ fees as well as the commissions of real estate agencies will also have to be made electronically should they exceed the US$5,000 limit.

In addition, all taxes will have to be paid electronically, regardless of the sum that is owed.

The newspaper suggested that the Uruguayan Executive could delay the implementation of the law, however. Aiming to make financial operations more transparent, the measure was partly designed to improve the country’s credit ratings.

Argentines have long flocked to Uruguay for their tax-evading “needs” due to the neighbouring country’s traditionally slack controls, but the phenomenon was augmented upon the implementation of strict domestic restrictions by President Cristina Fernández de Kirchner.

In a recent example, tennis player Juan Martín del Potro was confirmed this week to be under investigation for alleged income tax evasion that cost state coffers more than one million pesos, judicial sources said yesterday.

Judge Martín Brava will look into whether Del Potro diverted revenue from advertising and cash prizes from tournaments to Bongarden, a company set up by his parents in Uruguay.

On August 12, Agents working for the Federal Public Incomes Administration (AFIP), with a little help from Larishka, a dog, found US$86,500 hidden by an Argentine who was trying to leave the country for Uruguay.

The passenger was carrying the cash in a holdall and was about to leave the Buquebus ferry terminal in Buenos Aires for Colonia del Sacramento.

Herald staff

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