Expanding your business into Argentina presents exciting opportunities, but understanding the local tax system is crucial for compliance and optimizing financial operations. This guide outlines Argentina’s tax landscape, including corporate income tax, personal income tax, and other key tax aspects. Whether you are working with an Employer of Record (EOR) or managing payroll directly, this guide will help you navigate Argentina’s tax obligations effectively.
1. Corporate Income Tax (CIT)
Argentina applies corporate income tax to businesses operating within its borders.
Key Points:
- Tax Rate: Argentina’s corporate income tax rate is 35% on taxable income.
- Applicable Entities: The tax applies to all corporations and businesses operating in Argentina, both domestic and foreign.
- Exemptions: Some small and medium-sized enterprises (SMEs) may benefit from lower tax rates under certain conditions.
| Corporate Tax Rate | Rate (%) | Applicable Entities |
|---|---|---|
| Corporate Tax Rate | 35% | All corporations |
Compliance Notes: Corporate tax returns must be filed annually, and the deadline for filing is typically 30 days after the closing of the fiscal year.
2. Value Added Tax (VAT)
Argentina applies a Value Added Tax (VAT) on goods and services.
Key Points:
- Standard VAT Rate: The standard VAT rate in Argentina is 21%.
- Exemptions: Certain goods and services, such as exports, basic food products, and medical services, are exempt or subject to reduced VAT rates.
- Reduced VAT Rates: Certain items such as domestic transport and hotel accommodation may qualify for reduced rates.
| VAT Rate | Rate (%) | Exemptions |
|---|---|---|
| Standard VAT Rate | 21% | Exports, medical services, certain food products |
| Reduced VAT Rate | 10.5% | Domestic transport, hotel accommodation |
Compliance: Businesses must charge VAT on taxable goods and services and file VAT returns on a monthly or quarterly basis, depending on their turnover.
3. Withholding Tax
Argentina imposes withholding tax on certain payments made to non-resident entities.
Key Points:
- Dividends: Argentina applies a 13% withholding tax on dividends paid to foreign shareholders.
- Interest and Royalties: Interest and royalty payments are subject to a 15% withholding tax.
| Payment Type | Withholding Tax Rate (%) |
|---|---|
| Dividends | 13% |
| Interest & Royalties | 15% |
Compliance: Businesses must ensure the correct withholding tax is deducted and file the relevant tax returns for international payments.
4. Personal Income Tax (PIT)
Argentina applies personal income tax to the earnings of individuals.
Key Points:
- Tax Rates: Argentina has a progressive income tax system with rates ranging from 5% to 35% based on income.
- Deductions: Individuals can claim various deductions such as for dependents, medical expenses, and pension contributions.
| Income Range (ARS) | Tax Rate (%) |
|---|---|
| 0 – 1,467,500 | 5% |
| 1,467,501 – 2,200,000 | 9% |
| 2,200,001 – 3,000,000 | 12% |
| Above 3,000,000 | 35% |
Compliance: Employees are required to file their annual tax returns by the last business day of June of the following year. Employers withhold tax on behalf of their employees on a monthly basis.
5. Social Security Contributions
Social security contributions are mandatory for all employees in Argentina, both local and foreign.
Key Points:
- Employer Contribution: The employer contributes approximately 27.5% of the employee’s gross salary to the Argentine social security system (including pension, health insurance, and unemployment insurance).
- Employee Contribution: Employees contribute around 17% of their salary for social insurance (pension, healthcare, and family allowances).
| Contribution Type | Employer Rate (%) | Employee Rate (%) |
|---|---|---|
| Social Security (Pension & Health) | 27.5% | 17% |
Compliance: Employers are responsible for deducting and remitting social security contributions on a monthly basis.
6. Tax Incentives and Exemptions
Argentina offers several tax incentives to encourage investment, particularly in certain sectors like technology, R&D, and export activities.
Key Incentives:
- Research and Development (R&D) Tax Credit: Companies conducting qualifying R&D activities can benefit from tax exemptions and credits.
- Export Incentives: Certain export activities may be eligible for tax exemptions or reductions.
| Incentive Type | Description |
|---|---|
| R&D Tax Credit | Exemptions and credits for eligible R&D activities |
| Export Incentives | Tax exemptions or reductions for exports |
Compliance Notes: Companies must meet specific criteria to qualify for these incentives, and applications must be properly documented.
7. Filing and Compliance Deadlines
It is important to adhere to filing deadlines to avoid penalties.
| Tax Type | Filing Frequency | Deadline |
|---|---|---|
| Corporate Income Tax | Annual | 30 days after fiscal year-end |
| VAT | Monthly/Quarterly | 15th of the following month |
| Personal Income Tax | Annual | Last business day of June |
| Social Security | Monthly | End of each month |
Penalties: Late submissions or payments may result in penalties or interest charges.
Key Takeaways:
- Corporate Income Tax: Argentina applies a standard 35% corporate income tax rate, with exemptions for certain sectors.
- VAT: Argentina’s VAT rate is 21%, with reduced rates for specific goods and services.
- Withholding Tax: Argentina charges 13% withholding tax on dividends and 15% on interest and royalty payments to foreign entities.
- Personal Income Tax: Argentina has a progressive personal income tax system, with rates ranging from 5% to 35%.
- Social Security Contributions: Employers contribute 27.5%, and employees contribute 17% to Argentina’s social security system.
- Tax Incentives: Argentina offers tax credits and exemptions for research and development and export activities.
Summary Table:
| Tax Type | Rate/Description | Filing Frequency | Deadline |
|---|---|---|---|
| Corporate Income Tax | 35% on taxable income | Annual | 30 days after fiscal year-end |
| VAT | 21% standard rate, reduced rates apply | Monthly/Quarterly | 15th of the following month |
| Withholding Tax | 13% on dividends, 15% on interest and royalties | Annual | Varies depending on payment type |
| Personal Income Tax | 5% to 35% progressive rates | Annual | Last business day of June |
| Social Security | Employer: 27.5%, Employee: 17% | Monthly | End of each month |
| Tax Incentives | R&D tax credit and export exemptions | N/A | N/A |
GlobainePEO – Your Trusted Partner
At GlobainePEO, we simplify tax compliance in Argentina, managing corporate income tax, social security contributions, and regulatory filings with expertise. Focus on expanding your business while we ensure full compliance with Argentina’s tax and labor laws.