1 Basic framework
1.1 Is there a single tax regime or is the regime multi-level (eg, federal, state, city)?
Argentina is a federal country with three different government levels: a federal government, and provincial and municipal governments (National Constitution Act, enacted in 1853 and amended in 1860, 1866, 1898, 1957 and 1994). Each level is empowered to levy taxes (id, Sections 75(1) and (2), and Sections 121, 123 and 126). There is thus a multi-level tax regime under which taxation powers are coordinated between the federal, provincial and municipal governments.
1.2 What taxes (and rates) apply to corporate entities which are tax resident in your jurisdiction?
Corporate entities resident in Argentina are subject to income tax at the following rates (Section 69 of the Income Tax Law 20,628, as amended):
30% for the fiscal period from 1 January 2018 to 31 December 2019; and 25% for the fiscal period from 1 January 2020 onwards. If the local company distributes dividends, these will be subject to income tax at the following rates (Section 69 of the Income Tax Law):
7% for the fiscal period from 1 January 2018 to 31 December 2019; and 13% for the fiscal period from 1 January 2020 onwards. In such cases, the final tax rate will reach almost 35%.
1.3 Is taxation based on revenue, profits, specific trade income, deemed profits or some other tax base?
There are different tax bases for each tax. For instance:
income tax is based on income obtained in each fiscal period (Sections 1 and 2 of the Income Tax Law); personal asset tax is based on assets owned on 31 December each year (Title VI, Section 16 of the Personal Assets Law 23,966, as amended); valued added tax is a consumption tax levied on a product whenever value is added at each stage of the supply chain, from production to point of sale; fuel transfer tax is based on the sale of fuel to final consumers or wholesalers which do not transform such products; and withholdings on exports are taxed up to a limit of: $4 (Argentine pesos) per dollar for services exported; and $3 or $4 (Argentine pesos) per dollar for goods exported, depending on the customs classification. The tax base for this withholding is the total value of the invoice.
1.4 Is there a different treatment based on the nature of the taxable income (eg, gains on assets as opposed to trading income or dividend income)?
The Income Tax Law (Sections 41, 45, 49 and 79) establishes four types of income, as follows:
income from land; income from assets; income from corporate benefits; and income from personal work, labour relationships and other sources.
1.5 Is the regime a worldwide or territorial regime, or a mixture?
Section 1 of the Income Tax Law establishes a federal tax on the worldwide income of Argentine-resident individuals, legal entities incorporated in Argentina and Argentine branches of foreign entities. Non-resident individuals and legal entities without a permanent establishment in Argentina are taxed only on Argentine-source income.
Pursuant to Sections 5 and 127 of the Income Tax Law, 'Argentine-source income' is income arising from:
assets located, placed or used in the Argentine territory; the performance of any act or activity in Argentina that produces an economic benefit; and events occurring in Argentina.
1.6 Can losses be utilised and/or carried forward for tax purposes, and must these all be intra-jurisdiction (ie, foreign losses cannot be utilised domestically and vice versa)?
Section 19 of the Income Tax Law allows for the deduction of losses generated during a fiscal period that cannot be absorbed within the income earned during the same fiscal period. The loss may be deducted over the following five years.
Argentine-resident legal entities incorporated in Argentina and Argentine branches of foreign entities which are taxed on their worldwide income can count as a tax credit for income tax and personal asset tax purposes amounts paid abroad for analogous taxes, up to the limit that is generated by the fiscal obligation in Argentina.
1.7 Is there a concept of beneficial ownership of taxable income or is it only the named or legal owner of the income that is taxed?
Under Section 91 of the Income Tax Law, a 'foreign beneficiary' is anyone that receives benefits from abroad directly through attorneys, agents, representatives or any other agent in Argentina, but that does not have a stable residence in Argentina.
A party which makes a payment to a foreign beneficiary abroad must retain and remit the income tax to the Argentine Tax Department as a single and definitive payment of the tax.
1.8 Do the rates change depending on the income or balance-sheet size of the taxpayer?
The Income Tax Law does not establish different rates for companies depending on income or balance sheet. The applicable rates are:
30% for the fiscal period from 1 January 2018 to 31 December 2019; and 25% for the fiscal period from 1 January 2020 onwards.
1.9 Are entities other than companies subject to corporate taxes (eg, partnerships or trusts)?
As a general principle, partnerships, foundations, cooperatives and trusts are subject to income tax.
2 Special regimes
2.1 What special regimes exist (eg, for fund entities, enterprise zones, free trade zones, investment in particular sectors such as oil and gas or other natural resources, shipping, insurance, securitisation, real estate or intellectual property)?
As observed in question 1, in Argentina there are different government levels with their own taxation powers.
As a result, many special regimes may be established by each level of government within the scope of its taxation powers.
In this context, the federal government has enacted several laws granting benefits to industrial promotion, including the following:
Law 19,640 establishing a special tax and customs regime for the former National Territory of Tierra del Fuego, Antarctica and the South Atlantic Islands, and a system that carefully regulates commercial traffic between the different internal areas, both among themselves and with the continental territory; Law 20,560 establishing a regime for new industrial activities, the expansion, improvement and modernisation of existing industrial activities, the encouragement of geographic decentralisation, the national development of technology and the consolidation of the national property industry; Law 21,608 promoting the expansion of Argentina's industrial capacity and strengthening the participation of private companies in this process; Law 22,021 promoting economic development for agricultural, livestock, tourism and industrial farms to settle in the Province of La Rioja, granting tax benefits for exploitation of this project and for amounts invested as direct contributions of capital or integrations by subscription of actions for investors; and Law 23,614 promoting new industrial activities and the expansion, reconversion and modernisation of existing activities. Various tax exemptions are also available.
Provinces and municipalities have also introduced specific benefits and tax exemptions. For example, in the City of Buenos Aires, a promotion regime for technology companies was established by Law 5927/2018, with several exemptions from turnover tax, stamp tax and...