The criteria for attributing income is based on a proportion of the sum of income, passive interest and passive updates in each jurisdiction involved. The details in the note.
The Government advances in the regulation of Digital Banking. Through the General Resolution 5/2024 of the Arbitration Commission of the Multilateral Agreement of August 18, 1977published this Friday in the Official Gazette, “the fundamental rules to determine the allocation of income to each relevant jurisdiction” were established.
“In an increasingly digitalized world, where financial entities operate exclusively through digital platforms, such as the internet and mobile applications, this resolution establishes the fundamental rules to determine the allocation of income to each relevant jurisdiction,” states the official text.
Firstly, the standard clearly defines the concept of Digital Banking, focusing only on those financial institutions whose modus operandi is limited to digital channels, excluding traditional physical operations.
Standard criteria
The criteria for attributing income is based on a proportion of the sum of income, passive interest and passive updates in each jurisdiction involved. This sum covers the total gross income, regardless of its origin, but excludes certain elements such as the results generated by specific accounting regulations of the Central Bank, among others.
The Resolution also details specific rules for the attribution of income according to the type of operation carried out. For example, Operations between financial entities are attributed to the jurisdiction of the headquarters of the giving entity, while credit cards are assigned to the address of the holder customer, and so on.
Attribution of income by type of operation
They are established specific rules for income attribution depending on the type of operation, such as:
- Operations between financial entities: They are attributed to the jurisdiction of the headquarters of the giving entity.
- Credit cards: They are attributed to the address of the titular client.
- Loans: are attributed to the applicant’s address.
- Purchase and sale of foreign currency: are attributed to the address of the owner.
- Deposits: are attributed to the depositor’s domicile.
In summary, the Resolution establishes a regulatory framework for the taxation of financial entities that operate digitally. According to him, with the objective of determining fairly the share of income that corresponds to each jurisdiction.
Source: Ambito
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