[ESTABLISHING A BUSINESS ENTITY IN ARGENTINA]
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includes a list of “non-cooperative jurisdictions” that can be review on the official website: https://www.afip.gob.ar/jurisdicciones Cooperantes/no- cooperantes/periodos.asp
indefinite-term employment, certain conditions (such as wages, start date, and job category) must be registered with the tax and social security authorities. Failure to properly register an employment relationship may lead to presumptions of labor fraud, triggering significant penalties and sanctions for the employer. Salaries must be paid in legal tender and through traceable means, typically via bank transfer to the employee’s salary account. Employers are also required to make mandatory social security contributions and withhold income tax on behalf of the employee, in line with the statutory framework. Termination of employment without cause entitles the employee to severance compensation, generally calculated as one monthly salary per year of service (or fraction thereof exceeding three months), plus additional compensation in lieu of prior notice if not given. Recent reforms have reaffirmed and, in some cases, clarified these rules, while also seeking to reduce litigation by promoting alternative dispute resolution mechanisms and facilitating employer compliance through digital tools and simplified registries. In addition, employers must observe mandatory provisions arising from collective bargaining agreements (CBAs), which apply by industry and region. These CBAs typically regulate working hours, salary scales, leave entitlements, and other benefits, and are enforceable as part of the employment relationship. Overall, while the Argentine labor regime continues to prioritize employee protection, recent developments reflect a gradual shift toward promoting formal employment, legal certainty, and administrative efficiency.
C. LOCAL TAXES:
• Turnover tax: A 3 % average tax rate on gross income. Such rate may be increased to 5 % in accordance with the company’s annual gross income. Note that such tax rate may also vary depending on the activity developed. Exemptions may apply. This provincial tax is deductible for income tax purposes (federal level). • Stamp tax: A 1 % tax rate over the value of contracts. This tax may not apply if the instrumentation of the document is made by offer/acceptance letters. • Argentine municipalities impose local business taxes ("tasa de comercio") based on gross revenue: Rates vary by jurisdiction but commonly range from 0.5% to 1% of a company's gross income. 4. Outline of Labor Regulations. Argentina has a labor law framework historically characterized by strong protection of employees, including extensive regulation of employment relationships, minimum working conditions, and termination procedures. This employee-leaning approach is rooted in public policy principles and has remained largely consistent over time, although recent legislative changes aim to modernize and introduce some flexibility into the system. Employment agreements are generally deemed to be for an indefinite term unless explicitly agreed otherwise and permitted by law. While written contracts are not mandatory for
ILN Corporate Group – Establishing a Business Entity Series
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