Dealing with tax in Argentina while being overseas can be a tricky process and pose complications that would demand expert guidance. Bradford Jacobs has more than 20 years of experience in the front line of international payroll providers, and we ensure our clients comply with every aspect of taxation legislation worldwide. Our local know-how and global expertise are vital for multinational companies expanding into Argentina and farther afield into Latin America (LATAM).
Foreign companies must establish a legal entity in Argentina to hire staff and run their payroll. They typically choose to open a limited liability subsidiary, often as a small to medium-sized enterprise, to gain a foothold in the region. In Argentina, this is a Sociedad de Responsabilidad Limitada, SRL, which needs two or more members or partners and is regulated by the General Companies Act. However, Argentina’s personal and corporate tax regimes have many layers of complexity. Bradford Jacobs’ dedicated specialists remove the burden of worrying about these complications while you focus on building your business in a new territory. From locating the brightest talent to running your payroll, our Professional Employer Organisation (PEO) and Employer of Record (EOR) specialists are with you at every step.
Personal Income Tax (PIT):
There are nine bands beginning at 5% on income up to ARS 97,202 (€795, US$827) to 35% for income over ARS 1,555,232 (€12,721, US$13,249).
Social Insurance Taxes:
Employers contribute a total of 24% and 26.4% of employees’ gross remuneration to funds for pensions, family allowance, social services and health care. Employees contribute 17% of their gross earnings.
Corporate Income Tax:
Profits up to ARS 5 million (€41,034, US$42,640) are taxed at 25%; 30% applies on the excess up to ARS 50 million (€410,375, US$426,400) and 35% on the excess above that. Capital Gains are taxed as corporate income.
Value Added Tax (VAT):
The general rate is 21%. Utilities applying to non-residential dwellings attract 27%, such as telecommunications and energy, with 10.5% against such as housing construction and some medical services. Zero rates apply to books, medicines, basic foodstuffs and some cultural events, among other categories.
Withholding Tax (WHT): A tax of 7% applies to the distribution of dividends for fiscal years beginning after January 2021. Various rates apply to transactions with individual countries. WHT on interest ranges from 15.05% to 35% and on royalties from 17.5% to 35% for companies and 12.25% to 31.5% for individuals.
The tax year is from January 1 until December 31 for personal income tax (PIT) payers. Married couples are taxed independently for both employment income and any business earnings. Individual taxpayers do not need to file returns if their employer withholds their payroll tax and is forwarded to the Federal Administration of Public Revenues, the Administración Federal de Ingresos Públicos (AFIP). In other cases, returns should be filed by June 30 of the following year. Liability for taxes is judged on residency for individual taxpayers.
Under the Income Tax Law, tax residents generally are Argentine nationals (or naturalised), foreigners who have permanent residency or have been legally residing in Argentina for more than 12 months. Residents lose tax liability if they live in a foreign country for 12 consecutive months. Non-residents include foreigners assigned to work in Argentina for less than five years. Foreign beneficiaries include foreigners working in Argentina for less than six months in a calendar year. Residents are taxed on worldwide income but may qualify for tax credits, while non-residents and foreign beneficiaries are liable only on Argentina income.
| From | Not Over | Tax % |
|---|---|---|
|
ARS 0 |
ARS 97,202 (EUR 795 - USD 827) |
5% |
|
ARS 97,202 |
ARS 194,404 (EUR 1,592 - USD 1,655) |
9% |
|
ARS 194,404 |
ARS 291,606 (EUR 2,387 - USD 2,483) |
12% |
|
ARS 291,606 |
ARS 388,808 (EUR 3,183 - USD 3,310) |
15% |
|
ARS 388,808 |
ARS 583,212 (EUR 4,774 - USD 4,996) |
19% |
|
ARS 583,212 |
ARS 777,616 (EUR 6,367 - USD 6,622) |
23% |
|
ARS 777,616 |
ARS 1,166,424 (EUR 9,550 - USD 9,933) |
27% |
|
ARS 1,166,424 |
ARS 1,555,232 (EUR 12,733 - USD 13,246) |
31% |
|
Over ARS 1,555,232 |
- |
35% |
Employers in Argentina must contribute to the social security system based on a percentage of their employees’ gross remuneration. Employers contribute between 24%-26.4% to funds for pensions, family allowance, unemployment and the social health care plan. Contributions to funds for unemployment, family allowances and the social services plan for pensioners are grouped at 18%-20.4% of the total depending on the company’s activity.
Employers are exempt from contributions on the first ARS 7,003 (€57, US$59) of an employee’s monthly earnings. SMEs employing no more than 25 workers are exempt from the first ARS 10,000 (€82, US$85). Employers must also pay labour risk insurance of ARS 49.48 (€0.41, US$0.43) per employee per month, plus a percentage of their salary depending on the type of employment and risk involved. Employers also pay ARS 24.23 (€0.20, US$0.21) towards life insurance for their employees.
For more information, download our free guide or get in touch with our consultants here