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Results: 4 Answers
Corporate 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)?
 
Argentina
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 real estate tax (if the property is located within the ‘Technology Hub’).

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.2
Is relief available for corporate reorganisations or intra-group transfers of companies and other assets? Please include details of any participation regime.
 
Argentina
Sections 77 and 78 of the Income Tax Law and Section 105 of National Decree 1,344/1998 establish the requirements that must be fulfilled in order for company reorganisations and transfers within the same economic group to be tax neutral, and for the transfer of tax credits and other fiscal benefits to the new organisation. These provisions also apply to other taxes, such as value added tax (VAT) and turnover tax.

Depending on the type of reorganisation (eg, merger, spin-off), these requirements may vary.

The Argentine Tax Department (AFIP) has the power to challenge the reorganisation, which would render its tax neutrality ineffective, in which case the applicable taxes will be payable with interest and penalties.

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.3
Can a taxpayer elect for alternative taxation regimes (eg, different ways to calculate the taxable base, such as revenue-based versus profits based or cash basis versus accounts basis)?
 
Argentina
As regards income tax, there are two criteria: perceived and accrued.

Under the ‘perceived’ criterion, revenues are computed at the moment they are actually received. On the other hand, according to the ‘accrual’ criterion, income is computed at the moment the obligation to pay arises.

The income of companies must be computed under the accrued criterion; Argentine law does not allow this to change to ‘perceived’. However, companies can also choose ‘accrued due’, which changes the point at which to compute the payment to the moment of expiration of the term to pay the credit (regardless of whether it is paid). To elect for the ‘accrued due’criterion, it is necessary to carry out an administrative procedure at AFIP.

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.4
What are the rules for taxing corporates with different functional or reporting currency from that of the jurisdiction in which they are resident?
 
Argentina
The same rules apply as for all other companies. Foreign currency will be converted at the official exchange rate on the day before the end of the fiscal year.

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.5
How are intangibles taxed?
 
Argentina
When intangibles such as trademarks, patents, concession rights and other similar assets are sold, the gross profit shall be established by deducting from the sale price the updated acquisition cost by applying specific indexes (set out in Section 89 of the Income Tax Law), from the date of purchase until the date of sale. The amount thus obtained will be reduced in the amortisations to which it would have corresponded, calculated on the updated value.

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.6
Are corporate-level deductions available for contributions to pensions?
 
Argentina
Decree 814/2001 establishes the possibility of computing part of the employer’s contributions actually paid as a VAT credit, as defined in Annex I to the decree. The reform repealed Annex I in force and implemented another transition period. The modification is effective from 1 February 2018 to 31 December 2021.

Employers may continue to compute as a VAT credit part of the employer contributions up to 31 December 2021 in the same way as they have done previously, according to the new Annex I.

However, the new annex establishes a regressive percentage up to 0.00% within five years for all jurisdictions. For 2018 the same percentages apply as under the previous annex. Over the following years, the percentage for computing the tax credit will be reduced by 25% per year (ie, 75% in 2019, 50% in 2020, 25% in 2021 and 0% in 2022) (Law 27430: modifications to the system of employer contributions and their computation as tax credit VAT).

This benefit has never been allowed for companies based in the City of Buenos Aires and a large part of Buenos Aires Province (Almirante Brown, Avellaneda, Berazategui, Esteban Echeverrí­a, Florencio Varela, General San Martí­n, General Sarmiento, La Matanza, Lomas de Zamora, Merlo, Moreno, Morón, Quilmes, San Fernando, San Isidro, Tigre, Tres de Febrero, Vicente López, La Plata, Berisso, Ensenada, Pilar, General Rodríguez, Escobar, Marcos Paz, San Vicente y Cañuelas).

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.7
Are taxpayers from different sectors (eg, banking) subject to different or additional taxes or surtaxes?
 
Argentina
Yes. For instance, Section 20 of Law 23,349 establishes that the general VAT rate is 21%. However, Section 28(d) reduces the applicable VAT rate to 10.5% for loan interests and commissions granted by financial entities governed by Law 21,526, where the holder is liable for VAT in Argentina and where the financial benefits correspond to loans granted by financial entities located in countries whose central banks or equivalent have adopted the international banking supervision standards established by the Basel Committee of Banking Supervision. This rate increases to 27% for sales of gas, electricity and telecommunications services.

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.8
Are there other surtaxes (eg, solidarity surtax, education tax, corporate net wealth tax, remittance tax)?
 
Argentina
No.

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.
2.9
Are there any deemed deductions against corporate tax for equity?
 
Argentina
Yes – the cost of acquisition or in the case of foreign shareholders, which can consider their tax cost to be 20% of the purchase price.

For more information about this answer please contact: Francisco Blanco from JP O'Farrell Abogados S.A.