Argentina’s five-year tax reform plan aims to reduce the tax burden to stimulate economic growth.
Argentina’s package of tax reforms aims to attract investors and increase the economy’s competitiveness, while reducing inequality in the tax burden and avoiding a drop in tax revenues.
The reform bill, which was approved by Congress on 28 December 2017, includes regulations to provide greater tax transparency of trust and investments by Argentinian individuals and entities residing in foreign countries, as well as a labour amnesty to encourage the registration of previously unregistered employees.
Corporate income tax
There will be a gradual decrease in the corporate tax rate applied to non-distributed profits (from 35% to 25%). An additional tax on dividends will be established to reach a 35% corporate income tax rate.
Personal income tax
Several exemptions on financial investments held by Argentinean individuals will be eliminated or subject to a ‘reduced’ tax rate. Gains on real estate transfers will be taxed.
VAT recovery related to investments will be accelerated. Digital services provided by non-residents will be subject to VAT.
Social security contributions
There will be a gradual exemption of social security tax on a reduced part of gross salaries. The cap on employees’ contributions with regard to social security taxes will be abolished.
Tax on debits and credits on Argentinian bank accounts
Tax credits will be offset against income tax payable.
Turnover and stamp tax
As these are both provincial taxes, the Executive Power is currently negotiating reduced rates with regional governments.
Taxation on certain goods such as mobile phones, TVs and mid-range cars will be abolished, and there will be an increase in tax on goods such as aircrafts, vessels, alcoholic beverages and sodas.
Other amendments include changes to tax procedural regulations, tax treaties to avoid double taxation and advance pricing agreements.