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Argentina

General Information

Country Name: Argentine Republic
Currency: Argentine Peso (ARS)
Primary Tax Authority: Federal Administration of Public Revenue (Administración Federal de Ingresos Públicos, AFIP)

Key Legislation

  • National Constitution: Provides the foundational legal framework, including principles for taxation.
  • Income Tax Law (Ley de Impuesto a las Ganancias): Regulates personal and corporate income taxation.
  • Value Added Tax Law (Ley de Impuesto al Valor Agregado, IVA): Governs VAT.
  • Social Security Law (Ley de Régimen de la Seguridad Social): Regulates social security contributions.
  • Tax Procedure Law (Ley de Procedimiento Fiscal): Governs tax administration, including assessment and appeal processes.

Fiscal Authority Allocation

Argentina has a centralized tax system, with the Federal Administration of Public Revenue (AFIP) handling most tax collection and administration.

Taxes Collected by Central Authorities:

  • Income tax (personal and corporate)
  • VAT
  • Customs duties
  • Social security contributions

Taxes Collected by Provincial Authorities:

  • Gross income tax (applied to businesses)
  • Property tax (local portion)
  • Certain local business taxes

Revenue Sharing Mechanisms:

Revenue from national taxes is collected by the federal government, which then redistributes funds to provincial governments based on established formulas and agreements.

Corporate Income Tax (CIT)

  • Standard CIT Rate: 35%.
  • Taxable Income Definition: Resident corporations are taxed on worldwide income. Non-resident companies are taxed on Argentine-sourced income.
  • Deductible Expenses: Business-related expenses, including salaries, utilities, and cost of goods sold, are deductible.
  • Loss Carryforwards: Losses can be carried forward up to five years.
  • Tax Incentives: Tax credits for investments in specific industries and regions, including technology and renewable energy.

Value-Added Tax (VAT)

  • Standard VAT Rate: 21%.
  • Reduced Rate: 10.5% (e.g., for certain goods and services).
  • Exemptions: Health services, education, and certain financial transactions are exempt from VAT.
  • Refunds: VAT refunds are available for registered businesses, including exporters.

Personal Income Tax (PIT)

  • PIT Rates: Progressive rates from 5% to 35%. The top rate applies to income exceeding ARS 3,000,000 (for tax year 2023).
  • Taxable Income Thresholds: Income below ARS 300,000 is tax-free; higher incomes are taxed progressively.
  • Deductions and Exemptions: Various deductions are available, including for dependents, mortgage interest, and education expenses.
  • Treatment of Foreign Income: Residents are taxed on worldwide income. Relief through tax credits or exemptions is provided under Double Tax Treaties (DTT).
  • Special Rules for Expatriates: Certain expatriates may benefit from special tax regimes or exemptions.

Additional Mandatory Contributions

Social Security Contributions:

  • Rate: Contributions are made to the Argentine Social Security system.
  • Contribution Rate: Approximately 27% of gross salary (employer’s share); employees contribute around 17%.
  • Mandatory Participation: All employees and self-employed individuals are required to participate.

Withholding Taxes

  • Dividends: 7% withholding tax, with reduced rates under DTT.
  • Interest: 15% withholding tax, potentially reduced under DTT.
  • Royalties: 21% withholding tax, with reduced rates available under DTT.
  • Payments to Non-Residents: Generally subject to withholding tax, with reduced rates under DTT provisions.

Transfer Pricing Rules

Argentina adheres to the OECD guidelines for transfer pricing. Companies must maintain documentation for related-party transactions and comply with the arm’s length principle.

Special Tax Regimes

  • Free Zones: Argentina has several free trade zones offering tax incentives for businesses operating within these areas.
  • Investment Incentives: Tax incentives for investments in infrastructure, technology, and renewable energy.

Other Taxes

  • Property Tax: Levied by provincial authorities based on property value.
  • Customs Duties: Applied to imports based on the Customs Law.

Double Taxation Agreements (DTAs)

Argentina has signed 27 DTAs to avoid double taxation and provide reduced withholding tax rates on dividends, interest, and royalties.

Compliance and Reporting

  • Corporate Tax Filing Deadline: Annual corporate income tax returns must be filed within four months of the end of the fiscal year.
  • VAT Filing: VAT returns are filed monthly or quarterly, depending on turnover.
  • Penalties for Non-Compliance: Penalties for late filing and non-compliance include fines and interest on unpaid amounts.

Recent Developments

  • Tax Reforms: Argentina is implementing reforms to simplify the tax system and improve compliance.
  • Economic Challenges: Efforts to stabilize the economy include adjustments to tax rates and increased scrutiny of tax evasion.
  • Digital Economy Taxation: Argentina is exploring measures to tax digital services and cross-border e-commerce more effectively.

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