ArgentinaTax Obligations Detailed

Employers in Argentina face various tax obligations related to their employees' salaries and other compensation.

Corporate Income Tax

• Rate: A progressive rate ranging from 25% to 35% applies to corporate income. The top rate of 35% is applicable to income exceeding a threshold, which is adjusted annually.
• Filing: Annual corporate income tax returns, along with financial statements, are due by the 15th day of the fifth month following the fiscal year-end.
• Payments: Ten estimated tax payments are required throughout the year. The first installment, equivalent to 25% of the previous year's income tax liability, is due by the 15th day of the sixth month after the fiscal year starts. The remaining nine installments, each equal to 8.33% of the previous year's liability, are paid subsequently. The final tax balance is due with the annual return.

Social Security Contributions

• Employer Contribution: Rates vary from 24% to 26.4% of the employee's salary, depending on the company's size and primary activity. The 26.4% rate applies to companies primarily engaged in services or trade with annual sales exceeding specified thresholds. The threshold for service companies is ARS 6,520,009,000, while for trade companies, it is ARS 28,997,100,000. All other companies contribute at a 24% rate.
• Exemption: Employers are exempt from contributions on the first ARS 7,003.68 of an employee's monthly salary.
• No Cap: Employer social security contributions are calculated on the employee's total monthly compensation without a cap.

Other Taxes

• Real Estate Tax: This tax is levied by provincial authorities and is based on the fiscal valuation of the property. Payment frequency is typically monthly or bi-monthly.
• Stamp Tax: This tax applies to various documents like contracts, agreements, and mortgages. It is levied by each of Argentina's 24 jurisdictions.

Individual Income Tax (Employee Withholding)

• Rates: A progressive system applies, ranging from 5% to 35%. The specific thresholds for each rate are adjusted annually.
• Filing: Employees generally do not need to file annual tax returns unless they are due a refund, have additional income sources (besides salary), or their annual gross income surpasses a certain threshold (ARS 6,600,000 for fiscal year 2022). An informative return is required in cases where income exceeds this amount. The filing deadline is generally June 30th.

This information is current as of February 5, 2025, and might change due to legal and regulatory updates. Consulting with a local tax advisor is recommended for the most up-to-date information and personalized guidance.

In Argentina, employee tax deductions and contributions are crucial aspects of payroll and compliance.

Income Tax

As of January 2025, Argentina has implemented significant changes to its income tax system. Tax brackets and deduction amounts are now adjusted twice per year (January and July) in line with inflation. This aims to provide more accurate and fair taxation considering economic fluctuations.

Previously, a temporary exemption from income tax was in place for the majority of employees, with only those earning above a specific threshold being subject to taxation. While this measure was aimed at boosting take-home pay during a period of high inflation, the long-term plan involved transitioning to a "schedular tax" system. Under the proposed system, taxpayers would receive an exemption on annual salaries up to a designated amount, indexed twice yearly, with progressive tax rates on income exceeding the exemption limit.

It is important to note that, as of February 2025, specific details about the currently applicable income tax brackets, rates, and deductions need to be confirmed with the latest official resources. The information concerning the schedular tax system was a proposal and its current status requires verification.

Social Security Contributions

Employees contribute to the social security system through deductions from their salaries. As of September 2024, the total employee contribution rate was 17% of eligible earnings. This rate encompasses contributions to the pension fund (11%), social security (3%), and health insurance (3%).

The contribution is calculated based on earnings within a defined range. As of September 2024, contributions were applicable for salaries between ARS 7,003.68 and ARS 776,478.32. The upper limit (ARS 776,478.32 as of September 2024) is subject to monthly adjustments based on the consumer price index. Furthermore, there's a lower threshold below which social security contributions are not required. This threshold was ARS 7,003.68 per employee as of 2019. This amount has likely been adjusted in subsequent years based on inflation.

An important change introduced is the deductibility of employee social security contributions from employment compensation for income tax purposes. This offers a tax advantage to employees.

Other Deductions and Considerations

Apart from social security and income tax, several other factors influence net pay. Other potential deductions include contributions to a labor risk insurance and a life insurance fund, with specific amounts varying depending on the sector.

Employees can claim additional personal deductions through an electronic Form 572, impacting income tax withholding calculations. This form needs to be submitted to employers and should be filed by March 31st of the following fiscal year.

It's vital for employers and employees to stay up-to-date with the most recent legislation, regulations, and official guidelines from the Federal Administration of Public Revenue (AFIP) for accurate payroll calculations and compliance.

In Argentina, the Value Added Tax (VAT), known as Impuesto al Valor Agregado (IVA), is a consumption tax applied to most goods and services.

VAT Rates

• Standard Rate: 21% applies to most goods and services.
• Increased Rate: 27% applies to utilities like telecommunications, household gas, water, and industrial energy. It also applies to some financial and professional services.
• Reduced Rate: 10.5% applies to specific goods and services including certain food items (meat, fruits, vegetables), agricultural services, passenger transport, residential housing construction, some medical services, books, newspapers, and periodicals. Digital advertising services and imports of digital content are also subject to a reduced rate, which currently stands at 3%.
• Zero Rate: 0% applies to exports of goods and services.
• Exempt: Certain goods and services are exempt, including some essential food items (e.g., bread, milk), residential housing/farm leasing, passenger transport, specific medical services, education, and services provided by public entities.

VAT Registration

• Threshold: As of today, large companies (those designated by the ARCA) don't have a registration threshold and need to be registered from the get-go. Smaller businesses, however, currently have a threshold of ARS 300,000 for goods and ARS 200,000 for services. E-commerce platforms also have specific thresholds of 120 transactions per year and/or ARS 200,000. These thresholds, however, might change according to specific regulations.
• Mandatory Registration: Businesses operating in Argentina without a fixed establishment, if they are providing goods and services within the Argentinian territory, must register for VAT. As of January 1st, 2025, companies selling to final consumers in Argentina must itemize VAT on invoices. Smaller businesses have until April 1st, 2025 to implement these changes.
• Foreign Companies: Non-established foreign companies providing services in Argentina also need to get a VAT number.

Filing and Payment

• Returns: VAT returns must be filed monthly.
• Deadline: The deadline for filing and payment is between the 12th and the 22nd of the month following the reporting period. This deadline is dependent on the final digit of the company’s CUIT.
• Currency: Payments must be made in Argentine Pesos (ARS).
• Digital VAT Ledger: As of late October 2024, most registered companies first file the digital VAT ledger, followed by Form F2002 (VAT by Activity), which integrates the information provided in the ledger.

Other Indirect Taxes

In addition to VAT, businesses in Argentina may be subject to other taxes like the Gross Income Tax (Ingresos Brutos), which varies by province and activity.

Advance Payments and Withholding

The Argentinan tax system includes advance VAT and income tax payments withheld at import on certain goods. These advance payments may lead to increased credit balances. The regulations concerning which imports these advances apply to have seen changes and extensions recently, with some exemptions for specific businesses like micro and small companies and specific situations involving the National State. The suspension of exclusion certificates related to these taxes, previously slated to expire at the end of 2024, has been extended to June 30, 2025.

This information is current as of today, February 5, 2025, and might be subject to changes due to ongoing regulatory updates in Argentina. Always ensure to verify the latest regulations with the Federal Public Revenue Administration (AFIP) or a tax advisor.

Argentina offers a range of tax incentives, notably the Regime for the Promotion of Large Investments (RIGI), designed to attract significant investments in key sectors.

Regime for the Promotion of Large Investments (RIGI)

This regime targets investments exceeding USD 200 million in sectors like forestry, tourism, infrastructure, mining, technology, steel, energy, and oil and gas.

• Tax Incentives:

  • Reduced corporate income tax rate of 25% (compared to the standard 35%).
  • Accelerated depreciation options for tangible assets.
  • Unlimited carryforward of net operating losses, transferable to third parties after five years.
  • Reduced dividend tax rate (7%, decreasing to 3.5% after seven years).
  • Full credit for the Financial Transaction Tax (FTT) against income tax.
  • VAT payment flexibility using Fiscal Credit Certificates.

• Customs Incentives:

  • Exemptions from import duties on capital goods, spare parts, and consumables.
  • Exemption from export duties for goods produced by the Special Purpose Vehicle (SPV) after three years.

• Foreign Exchange Benefits:

  • Unrestricted payment of dividends and interest in foreign currency.
  • Partial exemptions from repatriating export proceeds.

• Other Benefits:

  • 30-year stability guarantee for the incentive regime.
  • Free distribution of project products without local market preferences.

• Eligibility: Special Purpose Vehicles (SPVs) created exclusively for the qualifying projects. This includes corporations, limited liability companies, branches of foreign entities, joint ventures, and other associative contracts.

• Application: SPVs must submit an application and investment plan. Approval is granted within 45 calendar days. The application deadline is two years from July 8, 2024 (with a possible one-year extension).

Provincial Regime for Strategic Investments - Buenos Aires

The province of Buenos Aires offers a separate incentive program for strategic investments exceeding USD 5 million.

• Benefits:
  • Fiscal stability for up to 30 years.
  • Partial exemptions from property tax, gross income tax, and stamp tax.

Personal Assets Tax

• The general rate for personal assets tax is 0.50%. Micro, small, and medium-sized entities classified as "compliant taxpayers" benefit from a reduced rate of 0.375% for 2023-2025.

This information is current as of February 5, 2025, and may be subject to change. It's advisable to consult with a tax professional for personalized advice.