Tax Figures
Corporate Income Tax
The corporate income tax rate is 35%.
Income Tax Rate
- 0 – 10,000: 9%
- 10,000 – 20,000: 14%
- 20,000 – 30,000: 19%
- 30,000 – 60,000: 23%
- 60,000 – 90,000: 27%
- 90,000 – 120,000: 31%
- 120,000+: 35%
Professionals who work in Argentina for less than six months are subject to a single income tax withholding of 24.5%.
Payroll Tax
There is no payroll tax in Argentina.
Sales Tax
The general Value Added Tax (VAT) is 21%, which increases to 27% to certain services such as communication and utilities provisions and decreases to 10.5% for capital goods and other specified items. The export of goods and services have no VAT.
There is also a provincial level sales tax in some municipalities levied at 4% of gross revenue. Higher rates may be levied for certain services or industries and in certain provinces.
Withholding Tax
Dividends paid to nonresidents have a withholding tax of 10%. An additional withholding tax applies if the dividends received exceed the payer company’s accumulated taxable income, standing at 35%.
Interest paid to nonresidents have a withholding tax of 35%, but may be reduced to 15.05% if the borrower is a financial institution, bank or in special circumstances.
Royalty payments made to nonresidents are subject to a withholding tax of 35% on 35% of the gross payment, at an effective rate of 12.25%. Patent royalties and technical assistance fees have varying withholding taxes depending on payment type, ranging from an effective rate of 21% to 31.5%.
Other Tax
- Real estate tax – The provincial governments levy a real estate property tax on both urban and rural land, with differing rates depending on the jurisdiction.
- Stamp duty – Documents such as contracts, notarial deeds, receipted invoices, promissory notes and other instruments are subject to stamp tax. The stamp duty is generally 1%, although may range from 2.5% to 4% depending on nature of tax and province.
- Customs and excise duties – Export duties depend on the nature of the goods exported, while excise taxes are levied on certain products only, e.g. fuel, luxury items and cigarettes.
- Financial transaction tax – All financial transactions are taxed at 0.6% per transaction on all debits and credits in current accounts.
- Net wealth tax – An asset tax of 0.5% applies to equity interests held by a resident or nonresident individual in a company incorporated in Argentina.
Income Tax (Personal Allowance)
Up to ARS 15,552 are able to be deducted for basic personal allowance.
Time to prepare and Pay Taxes
359 Hours
Tax Returns Supplied
Yes
Employers Social Security and statutory contributions
Employer social security contributions are current 27%, spread across contributions to the Pension Fund, Pensioner’s Healthcare Fund, Family Allowance Fund, Unemployment Fund and Medical Care.
Employees Social Security and statutory contributions
Employee social security contributions are currently 17% of gross wages, up to a monthly cap of ARS 13,879.25. 11% is towards the pension fund, 3% towards the Pensioner’s Healthcare Fund and 3% to Medical Care.
Payroll
Remote Payroll
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Argentina. Under Argentine Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.
Local Payroll Administration
In some cases, a company will register their business in Argentina under the various business entity types available, but prefer to have another company administering its payroll. This can be accomplished through a payroll provider.
It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Argentina may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage an Argentine payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Argentine employment laws.
Setting up payroll in Argentina
Currency
Argentine Peso (ARS)
Employee Information Required
The following information is required for an employee to be registered in the Special Payroll Book, which must be registered immediately by the company upon hiring, and is subject to control and supervision by the Argentine Ministry of Labor:
- Full name
- Date of birth
- National I.D number
- Gross earnings
- Position and department
- Hiring date
- Deductions
- Marital Status
- Tax Identification Number (CUIL) – for foreign employees
Tax Registration Requirements
Argentine companies should register their employees with the tax authority and retain taxes from employee salaries. Under Section 52 of the Employment Contract Law, the employer must keep a Special Labor Ledger that is registered and sealed by the Department of Labor to register employer and employee’s particulars and other aspects pertaining to taxation.
Tax and social security registration are both done at the National Tax Office (Administración Federal de Ingresos Públicos, AFIP). Employees of the company should obtain their Tax Identification Number (CUIT) to be registered with the taxation authority.
Social Security Registration
The hiring or termination of an employment contract should be reported to the AFIP for the employee to be registered with the Social Security Registry. Notice of the arrangement must be given before the starting date. A receipt in original will be provided to the employer, while a duplicate is given to the employee once the registration has been processed.
Documentation Required for New Employees
For newly hired employees, indefinite term contracts are not required to be in writing. Offer letters are typically not provided when hiring under this arrangement, although a written formality may be appropriate if there are certain issues to be clarified.
If an employment contract is to be drawn, the following details may be included:
- Specification of trial period
- Overtime conditions
- Annual paid vacations
- Maternity leave
- Termination rules
- Severance pay
- Notice of dismissal
- Company benefits (not mandatory)
Payment Mode
Traditionally, Argentina has widespread use of cash to make payments. Since 1997, companies are required to pay their employees via bank automated payroll deposits instead of cash. Alternatively, deferred checks are quite a popular method, while direct bank deposits are also used to some extent.
Frequency of Salary Payment
The most common frequency of salary payment is monthly, although daily wages can be settled weekly or fortnightly. The salary must be paid within four working days at the end of the month.
There is a mandatory bonus scheme in Argentina known as the 13th month Salary, where half the employee’s monthly salary is paid mid-year and the other half at the end of the year.
Invoice / Payslips required
Under Article 59 of the Argentine Labor Law, any payment made regarding salary must be accompanied by a receipt signed by the worker. A duplicate is given to the employee, and must include full name, address and CUIT, types of remuneration received, deductions, proof of receipt, place and date.
Minimum Wage
As of January 2016, the minimum wage stands at 6060 ARS per month, paid 13 times a year.
