Argentina

At a glance

 

Total net taxable income

Will pay ARS

Plus the %

On the amount exceeding ARS

More than ARS

Up to ARS

0

5,000,000

ARS 0

25%

ARS 0

5,000,00

50,000,000

ARS 1,250,000

30%

ARS 5,000,000

50,000,000

and ahead

ARS 14,750,000

35%

ARS 50,000,000


Tax rates applied on capital gains: 25% - 35%

Tax rates applied on branch profits: 25% - 35%

   

Other taxes (e.g. local or state tax): Income Tax, Value Added Tax, Tax on Debits and Credits, Personal Assets Tax, Social Security Taxes, Custom Duties, Gross Revenue Tax, Stamp Tax, Municipal Rates.


Withholding taxes (standard rate) 35%

on dividends 7% 

on branch profit remittance 7% 

on interest 35% (a)

on royalties 31.5% (b)

   

Loss carry back period N.A.

Loss carry forward period 5 years



(a) 15.05% on interest on equipment financing provided by the vendor (Treaty Tax Rates may be applicable) and inter alia on loans to financial institutions.


(b) 28% on agreements in compliance with Transfer of Technology Act or 21% on technical assistance, engineering or consulting not obtainable in Argentina according to Technology Transfer Authority (Treaty Tax treatment may be applicable).

Introduction

In Argentina, the separation of powers between Legislative, Judicial and Executive must be respected by the federal, provincial and municipal governments, including the City of Buenos Aires. The Argentine Constitution upholds the "no taxation without representation" principle which implies that the Legislative body is the only authorized at all three levels of government to impose taxes or change substantial aspects of taxes already in force. The income tax is applicable to resident taxpayers on their worldwide income with tax credit for similar taxes paid outside of Argentina. Non residents are subject to income tax on their Argentine source income. Argentine companies operating with foreign related parties or independent parties located in tax haven jurisdiction must justify the arm's length nature of their dealings. Transfer pricing rules generally follow the OECD Guidelines, with some important departures. Foreign trade triangulation and commodities exports are usually under scrutiny by the tax authorities. Equity interests held by individuals and nonresidents, are subject to the Personal Assets Tax at a rate of 0.5% on the book value of the Argentine companies who are required to pay the tax. There are various planning opportunities such as the extensive Treaty network that provides tax relief on income and capital items. VAT is levied on sales, services and imports into Argentina. The Gross Revenue Tax is imposed by the Provinces and the City of Buenos Aires. Exports of goods and services are exempt from VAT and Gross Revenue Tax in mosto local jurisdictions. The Stamp Tax is also imposed by the Provinces and the City of Buenos Aires. Agreements entered without the express written consent of the offeree are generally not taxable. There are certain special tax regimes available for specific industries, such as the knowledge economy, mining, biotechnology, and certain "eco-friendly" projects. As a Mercosur member, trade with other Mercosur countries is not subject to customs duties. Supply chain management, transfer pricing, selection of business entity, election of foreign parent, debt vs. equity funding, geographic location and contract instrumentation are key areas to structure in order to minimize tax and foreign exchange exposure in Argentina.

Publications

CTA Members in Argentina

Daniel Rybnik Daniel Rybnik
Telephone: +54 11 4776 8200 E-Mail: daniel.rybnik@corptax.org

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