Argentina Market
Tax Structure in Argentina
In Argentina, taxes are collected by the National Government, the provinces and the local authorities. The National Constitution states the federal tax co-participation between the National State, the Provinces and the City of Buenos Aires (based on the services, duties and jurisdictions of each of them).
The tax system is mainly structured on income, assets and consumption taxes. The main taxes, according to government levels, are as follows:
National Taxes
Income Tax
a) Corporate
Any profits, including capital gains, are taxable. Corporate taxpayers resident in Argentina are obliged to pay income tax on their worldwide income. In order to avoid double tax imposition, they make a tax credit for alike paid abroad on their foreign business activities, up to the amount of the increase tax liability resulting from including foreign source income. The tax rate is 35 per cent. Non-resident companies without a branch or other permanent establishment in Argentina will solely pay taxes on their Argentinean sources of income and capital gains. Tax is normally levied in the form of a withholding made by a taxpayer agent in Argentina, at various effective rates depending on the particular type of income. These rates are calculated as 35 per cent of the presumptive income as set forth in the Income Tax Law.
b) Individuals
Resident individuals in Argentina are liable for income tax at progressive rates on their worldwide income. Rates range from 9 to 35 per cent depending on the income level. Non-resident individuals are taxed only on their Argentinean-source income. Tax is levied as a withholding made by a taxpayer agent in Argentina at various effective rates depending on the particular type of income.
a) Corporate
Any profits, including capital gains, are taxable. Corporate taxpayers resident in Argentina are obliged to pay income tax on their worldwide income. In order to avoid double tax imposition, they make a tax credit for alike paid abroad on their foreign business activities, up to the amount of the increase tax liability resulting from including foreign source income. The tax rate is 35 per cent. Non-resident companies without a branch or other permanent establishment in Argentina will solely pay taxes on their Argentinean sources of income and capital gains. Tax is normally levied in the form of a withholding made by a taxpayer agent in Argentina, at various effective rates depending on the particular type of income. These rates are calculated as 35 per cent of the presumptive income as set forth in the Income Tax Law.
b) Individuals
Resident individuals in Argentina are liable for income tax at progressive rates on their worldwide income. Rates range from 9 to 35 per cent depending on the income level. Non-resident individuals are taxed only on their Argentinean-source income. Tax is levied as a withholding made by a taxpayer agent in Argentina at various effective rates depending on the particular type of income.
2. Tax on Assets (Tax on Minimum Presumptive Income)
Tax is levied on the worldwide assets of Argentinean companies. The tax rate is 1 per cent and this tax and income tax may be mutually offset. The term during which these two taxes may be offset has been extended from 4 to 10 years.
Tax is levied on the worldwide assets of Argentinean companies. The tax rate is 1 per cent and this tax and income tax may be mutually offset. The term during which these two taxes may be offset has been extended from 4 to 10 years.
3. Tax on Assets (Personal Property Tax)
Resident individuals are subject to an annual tax of 0.5 per cent on their assets (both in the country and abroad) for amounts in excess of AR$102,300 -US$33,541- and below AR$200,000 -US$65,574-. Beyond this amount, the tax rate increases to 0.75 per cent. Stocks of companies resident in Argentina are exempted from this tax if the securities are held for at least one year.
Resident individuals are subject to an annual tax of 0.5 per cent on their assets (both in the country and abroad) for amounts in excess of AR$102,300 -US$33,541- and below AR$200,000 -US$65,574-. Beyond this amount, the tax rate increases to 0.75 per cent. Stocks of companies resident in Argentina are exempted from this tax if the securities are held for at least one year.
Non-resident individuals are only levied on their assets located in the country.
4. Real Estate Transfer Tax
Transactions of real estate located in Argentina, owned by individuals or part of undivided estates of deceased people, are subject to a tax of 1.5 per cent only if this transaction is not subject to income tax.
5. Value Added Tax (VAT)
VAT is applied to the delivered cost of the product or service at each change of hands, with a credit given for taxes paid at earlier stages of production. Imports are subject to taxation at the same rates that apply to similar domestic items. VAT is not levied on exports. Exporters may claim the reimbursement of VAT paid on their purchases. The general rate for VAT is 21 per cent. Sales of capital goods, passenger transport fares (except for international journey fares), newspapers, magazines, brochures and publications, private health insurance, and interest paid on foreign loans and domestic bank loans pay a differential (50 per cent lower) rate of 10.5 per cent. The supply of certain services such as electric power, natural gas and water, for places other than houses, is subject to a higher tax rate.
VAT is applied to the delivered cost of the product or service at each change of hands, with a credit given for taxes paid at earlier stages of production. Imports are subject to taxation at the same rates that apply to similar domestic items. VAT is not levied on exports. Exporters may claim the reimbursement of VAT paid on their purchases. The general rate for VAT is 21 per cent. Sales of capital goods, passenger transport fares (except for international journey fares), newspapers, magazines, brochures and publications, private health insurance, and interest paid on foreign loans and domestic bank loans pay a differential (50 per cent lower) rate of 10.5 per cent. The supply of certain services such as electric power, natural gas and water, for places other than houses, is subject to a higher tax rate.
6. Excise Taxes
This tax is charged on specific consumer goods and services at different rates. The firs consumer or importer pays this tax. The main products under this category are cigarettes, alcoholic beverages, oil and lubricants, wine, gold, furs, insurance on property, etc.
This tax is charged on specific consumer goods and services at different rates. The firs consumer or importer pays this tax. The main products under this category are cigarettes, alcoholic beverages, oil and lubricants, wine, gold, furs, insurance on property, etc.
7. Customs Duties
a) Import Duties
Currently, import duties range between 0 and 35 per cent. There are certain exceptions, where minimum specific duties are applied, or for goods that have a special tax treatment. Generally, goods that come from member countries of ALADI have certain preferences. Regarding Mercosur, import duties among members have been practically removed. In turn, a common external tariff has been set for goods coming from or originated extra-zone. There is a minimum period for the outflow of foreign currency, depending on the imported product. Other taxes to be paid by importers are: Statistics Rate (0.5 per cent calculated on the CIF value and up to US$1,750) and, if applicable, Proof of Destination Rate (2 per cent calculated on the CIF value). Imports will be subject to VAT (21 or 10.5 per cent in some special cases), additional VAT (usually 10 per cent) and Income Tax (usually 3 per cent in most of the cases).
a) Import Duties
Currently, import duties range between 0 and 35 per cent. There are certain exceptions, where minimum specific duties are applied, or for goods that have a special tax treatment. Generally, goods that come from member countries of ALADI have certain preferences. Regarding Mercosur, import duties among members have been practically removed. In turn, a common external tariff has been set for goods coming from or originated extra-zone. There is a minimum period for the outflow of foreign currency, depending on the imported product. Other taxes to be paid by importers are: Statistics Rate (0.5 per cent calculated on the CIF value and up to US$1,750) and, if applicable, Proof of Destination Rate (2 per cent calculated on the CIF value). Imports will be subject to VAT (21 or 10.5 per cent in some special cases), additional VAT (usually 10 per cent) and Income Tax (usually 3 per cent in most of the cases).
b) Export Duties
Currently, export duties range from 5 or 20 per cent. Exports of goods which have undergone some type of industrial processing (based on the MOA “Manufactures of Agricultural and Livestock Origin- and MOI “Manufactures of Industrial Origin- under statistical criterion) will pay a 5 per cent rate; while Primary Products “non-industrialized items- pay just a 20-per cent rate. There is a minimum period for the inflow of foreign currency, depending on the exported product.
Currently, export duties range from 5 or 20 per cent. Exports of goods which have undergone some type of industrial processing (based on the MOA “Manufactures of Agricultural and Livestock Origin- and MOI “Manufactures of Industrial Origin- under statistical criterion) will pay a 5 per cent rate; while Primary Products “non-industrialized items- pay just a 20-per cent rate. There is a minimum period for the inflow of foreign currency, depending on the exported product.
8. Taxes on Bank Checking Account Debits and Credits
This tax is levied on every credit and debit to bank current accounts. The rate is usually 4 per thousand and part of the charge may be used as credit for income tax and VAT purposes.
This tax is levied on every credit and debit to bank current accounts. The rate is usually 4 per thousand and part of the charge may be used as credit for income tax and VAT purposes.
Provincial Taxes
1. Turnover Tax
This tax is levied on each commercial transaction. No credit is given for tax paid at previous stages. Tax rates vary between 1.5 and 4 per cent, depending on the type of activity and the province where it takes place. (Primary and industrial activities are usually exempted). It is paid on an annual basis, with advances made every month or every two months, as applicable in each jurisdiction.
This tax is levied on each commercial transaction. No credit is given for tax paid at previous stages. Tax rates vary between 1.5 and 4 per cent, depending on the type of activity and the province where it takes place. (Primary and industrial activities are usually exempted). It is paid on an annual basis, with advances made every month or every two months, as applicable in each jurisdiction.
2. Tax on Real Estate
Provinces and municipalities tax real estate located in their respective jurisdictions. This tax varies per jurisdiction.
Provinces and municipalities tax real estate located in their respective jurisdictions. This tax varies per jurisdiction.
3. Stamp Tax
Stamp tax is levied on public or private instruments upon formal execution. The rate is usually 1 per cent. Some jurisdictions have eliminated this tax for certain transactions.
Stamp tax is levied on public or private instruments upon formal execution. The rate is usually 1 per cent. Some jurisdictions have eliminated this tax for certain transactions.
Local Taxes
Retributive rates for services For industrial safety, health and similar services, local treasury departments charge the rates they might determine based on income or other fixed parameters, such as number of employees, driving force capacity, etc.