[ESTABLISHING A BUSINESS ENTITY IN ARGENTINA]
17
security taxes in connection with their position as directors. ▪ Permits: Depending on the company’s purpose and industry in which company’s activities are carried out, certain permits might be necessary to operate. 3. Outline of Argentine Tax Regulations (notwithstanding the application of Double Tax Treaties) Please find below a general description of the main taxes applicable to companies in Argentina. This should be analysed on each specific case as exceptions or special regimes may apply. NATIONAL TAXES: Corporate Income Tax (CIT): Resident companies are subject to CIT on a worldwide basis. The income tax law has a progressive tax rate, according to the following criteria (for fiscal year 2023): a) if the net income of the company does not exceed ARS 14,301,209.21 million (approximately USD39,000) in the fiscal year, a 25% tax rate applies; b) if the net income range exceeds ARS 14,301,209.21 million but is less than ARS 143,012,092.8 million (approximately USD391,000), a tax rate of 30% applies to the income exceeding ARS 14,301,209.21 million; and c) if the net income exceeds ARS 143,012,092.08 million, a tax rate of 35% applies to the income exceeding ARS 143,012,092.08 million. Withholding tax in dividends: A withholding tax of 7% applies to the payment of dividends. Value Added Tax: the general VAT rate for Argentine local transactions is 21 %. For certain
goods or services could be 10,5%. There are also exemptions that may apply. For example, exports are levied at a 0% VAT and exporters can be reimbursed for the local VAT paid related to its exportation. Bank credits and debits tax: credits and debits on local bank accounts are subject to a 0.6 % tax rate on the debits and a 0.6 % tax rate on the credits. In general, depending on the kind of activity of the local entity certain exceptions may apply. There is an additional 1.2% tax rate for cash withdrawals, except for SMEs (Small and Medium Size entities). In general, this tax generates a tax credit of 33% that can be used to offset income tax or its instalments. Customs duties : Import/export of “goods” are taxed at different customs rates according to each tariff position (identification for customs purposes). Social security taxes (SST): Employers Contribution for SST: The social security tax rate for employers which activities are related to commerce or services and who are not a SMEs 1 is 20,40% and for the rest of employers the tax rate is 18,00%. The health care tax rate is 6%. So, it is 26,4% for the first case and 24% for the second one and it applies on the gross salary. Employee Payment for SST: Please note that the local company shall withhold the relevant social security taxes from the employee’s salaries which represent approximately 17% of the gross salary, health case included. Also, the company shall withhold the income tax from the employee’s salaries if applicable. TAXES ON SHAREHOLDERS: Capital gains tax (Direct or Indirect Sale): In broad terms, direct or indirect sale is taxable at
1 SME: small and medium-sized enterprises.
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator