Answer ... For income tax, the basis varies regarding the type of income, as follows:
- 60% of amounts paid for benefits derived from technical assistance, engineering or consulting services that were not available in the country, in the opinion of the competent authority, in matters of technology transfer, provided that they were duly registered and effectively rendered;
- 80% of amounts paid for benefits derived from the assignment of rights or licences for the exploitation of invention patents and other objects not contemplated in the first bullet point above;
- 35% of amounts paid in the case of exploitation in Argentina of copyright, provided that the respective works are duly registered with the National Directorate of Copyright;
- in the case of interest or remuneration paid for loans or placements of funds obtained abroad:
- 43% where the borrower is an entity governed by the Law on Financial Institutions or in the case of financing operations for the amortisation of assets – except automobiles – granted by the suppliers; and
- -100% if the lender does not meet the conditions mentioned in the previous point above;
- 70% of amounts paid for salaries, fees and other remuneration to persons acting temporarily in the country, such as intellectuals, technicians, professionals, artists, athletes and other personalities, who in order to comply with their functions do not remain in the country for a period exceeding six months in the fiscal year;
- 40% of amounts paid for the lease of personal property made by residents abroad;
- 60% of amounts paid in respect of rents or leases of real estate located in the country belonging to companies located abroad;
- 50% of amounts paid for the transfer of assets located, placed or used economically in the country, belonging to companies located abroad; and
- 90% of amounts paid for profits not foreseen in the previous points above (the income tax subsidiary base).
Answer ... As a general principle, any income or gain deemed under the Income Tax Law to be from an Argentine source – whether it is obtained by a non-resident individual or by a foreign legal entity without a permanent establishment in Argentina – is subject to withholding tax.
In order to determine the effective withholding rate, a 35% rate is applied to a presumed net income mentioned above. For example, if the presumed income is 90% (the income tax subsidiary base outlined in question 4.1), the effective rate will be 31.5%.
Answer ... Tax treaties between Argentina and other countries have a higher normative hierarchy than national laws, so in a situation that is regulated by a treaty, its provisions will take precedence.
In Argentina, the ‘monistic principle’ is applied, whereby the priority of conventional international law over domestic law forms part of the Argentine legal system under the Vienna Convention on the Rights of Treaties – a doctrine later ratified by Section 75(22) of the National Constitution.