Argentina’s corporate tax rate is calculated according to a number of factors related to your commercial activity and geographic location, both inside and outside the South American nation.
If you are considering company incorporation in Argentina, you will need to understand the corporate tax regime you will be dealing with, in order to maximize your potential benefits in Latin America’s third-largest economy by GDP.
Argentina’s Corporate Tax Rate
Argentina’s corporate tax rate is handled by the Federal Administration for Public Revenue (AFIP). Among its responsibilities, the entity handles:
- Registration of Tax ID for physical persons and legal entities
- Determination process for national taxes
- Filing of tax returns
- The imposition of fines and penalties
- Management of the appeals process related to taxes
Provincial and municipal administrations levy turnover tax, real estate tax, stamp duty, vehicle tax, and tax on public advertising. The local tax entity for the capital city of Buenos Aires is the “Government Administration for Public Revenue” (AGIP).
General Compliance Requirements
National tax ID registry
Entities seeking to operate in Argentina must apply to the AFIP for a “Single Tax Identification Number,” or CUIT (pronounced “coo-it”). This will be the reference for both national and municipal taxes.
National Taxes are filed online through the AFIP website. Municipal Taxes are filed before the municipal tax authority. That is the the AGIP for entities operating in Buenos Aires and varies by region outside.
Imports/ Exports Compliance Requirements
To import or export goods to or from Argentina, a local company needs to be registered before the Customs General Directorate of the AFIP. The registry is partially carried out online but the process must be completed in person.
Tariff headings (customs duties)
Argentina’s corporate tax rate will differ according to the type of import. For example, the government charges an 18% customs duty on mattresses and related products. A tax advisor will be able to consult AFIP rates on any product you are considering importing or exporting to inform you of the accompanying tax burden.
Product nationalization requires a review of both the product and its documentation. If the documentaton is fully in order, the process can be passed to a “green channel,” which reduces the number of reviews from authorities and therefore gets you in business sooner.
During the nationalization process the importer will pay the VAT rate for the product, as well as an additional 0.5% “statistics tax,” and a 1.5% income tax, calculated over the gross value of the goods placed in Argentina.
Corporate income tax
Imposed over any kind of income at a general rate of 30%. Argentinian tax residents have their global revenue taxed while nonresidents are taxed on only their Argentinian income. Entities can discount cost and other tax approved expenses directly related with the income generation.
Income Tax returns are filed once yearly within five months of the end of the fiscal year, which in Argentina follows the calendar year.
Tax on dividends
Dividends are taxed at a 13% rate regardless of whether the beneficiary is a local tax resident or nonresident.
Value Added Tax (VAT)
The general rate is 21%. A higher rate of 27% is applied to electricity, natural gas and water supplied to business activities. Some special residual activities have a rate of 10%.
Exports of goods and services are included in the scope of VAT, but they are taxed at a zero rate (0%). This means that VAT is not levied on output, while VAT paid on inputs may be recoverable through tax refunds.
Financial transactions tax
The general financial transactios tax rate is 0.6% (six per thousand) , however that works out at an effective rate of 1.2%, because it is applied to both the debiting and the crediting transaction.
Social security and “payroll taxes”
These taxes are between 24% and 26.4% of the employee’s total monthly compensation.
Other Local Tax Rates
Each of the 24 jurisdictions into which Argentina is divided imposes a tax on gross revenues from the sale of goods and services.
Exported goods are exempt from this tax. Rates, rules, and assessment procedures are determined by the local tax administrations. On average, rates for trade and services range from 3% to 5%. Industrial goods rates are generally lower (ranging from 0% to 2%).
This tax is approximately 41% of the final price.
Real estate tax
This tax is approximately 0.7% of the property value paid yearly
International Tax Rates
Applicable international treaties
Argentina has treaties to avoid double taxation with the following countries: Australia, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland, Russia, Mexico, and the United Kingdom.
Argentina – Chile treaty
When distributing dividends from Argentina to Chile the paying entity will withhold a 10% tax as opposed to the general rate of 30%.
Argentina – Germany treaty
the distributing entity will withhold a 15% as opposed to the general rate of 30%.
Argentina uses the “standing arm” principle, meaning that transactions between related entities have to be done under the same proce, quality and quantity conditions as if it were to be done with non-related parties.
Argentinean entities making transactions with related parties above $39,800 (USD) annually or $3,980 (USD) for an individual transaction, must file a local and a master report with the AFIP, describing the relevant information of the corporate group, the control relations and the individual conditions and amounts for each transaction.
Understand more about Argentina’s Corporate Tax Rate with Biz Latin Hub
Negotiating Argentina’s corporate tax rate need not be a major headache. At Biz Latin Hub, our team of multilingual tax specialists are here to guide you in understanding Argentina’s corporate tax rates and offer advice. We also provide professional company formation and incorporation, legal, and financial services tailored to you and your company’s needs for help on getting your business set up in Argentina.
Contact us now to learn more about Argentina’s corporate tax rate.