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 real estate tax (if the property is located within the ‘Technology Hub').

2.2 Is relief available for corporate reorganisations or intra-group transfers of companies and other assets? Please include details of any participation regime.

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.

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)?

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.

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?

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.

2.5 How are intangibles taxed?

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.

2.6 Are corporate-level deductions available for contributions to pensions?

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).

2.7 Are taxpayers from different sectors (eg, banking) subject to different or additional taxes or surtaxes?

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.

2.8 Are there other surtaxes (eg, solidarity surtax, education tax, corporate net wealth tax, remittance tax)?


2.9 Are there any deemed deductions against corporate tax for equity?

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.

3 Investment in capital assets

3.1 How is investment in capital assets treated – does tax treatment follow the accounts (eg, depreciation) or are there specific rules about the write-off for tax purposes of investment in capital assets?

Depreciation is applied to capital assets, which are deductible from gross profits to determine the income tax base. These include buildings and other constructions and maintenance expenses, such as movable property. Movable property annexed to real estate whose useful life is less than 50 years may be amortised separately.

Depreciation method for real estate: As depreciation of buildings and other constructions on properties affected by activities or investments that result in the tax, it is possible to deduct 2% per year of the cost of the building or construction, or of that part of the acquisition value attributable thereto, until such cost or value is exhausted. Amortisation must be made from the beginning of the quarter of the fiscal year or calendar in which the asset has been affected until the quarter in which the value of the assets is exhausted or until the quarter immediately preceding that in which the goods are sold or alienated, or the activity or investment is discontinued.

Depreciation method for movable property: The resulting sum will be deducted according to the following rule: the cost of acquisition of the goods will be divided by a number equal to the years of its probable useful life. The result of the calculation is the ‘ordinary amortisation fee'. The update rate determined by the Argentine Tax Department will be applied for the month corresponding to the closing date of the fiscal period that is settled. The amount thus obtained will be the annual deductible depreciation.

This procedure also applies to intangible assets subject to amortisation.

This method does not include agricultural livestock, to which a specific amortisation procedure applies.

3.2 Are there research and development credits or other tax incentives for investment?

Yes – there are special regimes to promote investment in mining and oil and gas (in the exploration and exploitation stage).

Law 24,196 provides that the total amount invested in exploration, technical trials, research and other studies to determine the feasibility of a mine may be deducted from the income tax balance.

Law 26,154 establishes promotional regimes for the exploration and exploitation of hydrocarbons. These regimes are applicable both on the continental shelf and in the territories of the provinces, including their territorial seas.

The fiscal benefits common to both regimes are as follows:

  • VAT: Early refund of the tax for investments and expenses incurred in the exploration stage and for investments in the exploitation stage. This benefit is also available to transitory business unions and any other individuals or collective entities that are subject to VAT.
  • Income tax: Expenses on assets and investments made in the exploration stage and investments made in the operating period may be subject to accelerated amortisation in three annual instalments, equal and consecutive from the year in which they are made and insofar as they are activated or investments are enabled.
  • Imports: Exemption from the payment of import duties and any other right, special tax, correlative tax or statistical fee, excluding the remuneration of services, the introduction of capital goods necessary for the activities promoted or parts or component elements of such goods, which are not manufactured in the country.

3.3 Are inventories subject to special tax or valuation rules?

See question 3.2

3.4 Are derivatives subject to any specific tax rules?


4 Cross-border treatment

4.1 On what basis are non-resident corporate entities subject to tax in your jurisdiction?

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).

4.2 What withholding or excise taxes apply to payments by corporate taxpayers to non-residents?

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%.

4.3 Do double or multilateral tax treaties override domestic tax treatments?

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.

4.4 In the absence of treaties, is there unilateral relief or credits for foreign taxes?


4.5 Do inbound corporate entities obtain a step-up in asset basis for tax purposes?


4.6 Are there exit taxes (for disposed-of assets or companies changing residence)?


5 Anti-avoidance

5.1 Are there anti-avoidance rules applicable to corporate taxpayers – if so, are these case law (jurisprudence) or statutory, or both?

Law 11,683 includes the ‘economy reality' principle as a general anti-avoidance rule, under which the tax authorities can analyse the economic taxation in each case and disregard the legal form and structured used by the taxpayer.

According to the Double Taxation Convention (DTC) between Argentina and Chile, dividends paid by a company are taxable only in the country of domicile (this treaty was modified by Law 27,274 on 7 September 2016). In other words, through the treaty, each country waived its tax authority over foreign-source income; its power of taxation is thus limited to income originated by subjects domiciled in their respective jurisdictions.

Molinos Río de la Plata v AFIP, a case which is pending before the National Supreme Court, arose from the tax reform introduced by Law 19,840. This incorporated in Section 41D of the Income Tax Law a preferential tax regime whereby an incentive was made available to foreign investors to canalise their investments abroad through ‘investment platform companies', thus exempting them from paying taxes on dividends derived from investments made in other jurisdictions.

The Argentina Tax Department (AFIP) argued that a platform company established in Chile by Molinos had as its main and only interest the canalisation of income from group companies in order to benefit from the advantages enshrined in the DTC. Molinos argued that there was no divergence between the adopted form and the economic reality: the platform company had been established pursuant to a business decision made within the framework of freedom of commerce, which allows for a business to be structured in the way deemed most convenient within the framework of the law.

The principles of interpretation enshrined in Sections 1 and 2 of Law 11,683 (fiscal procedure) are established as anti-avoidance norms of double tax agreements.

The Argentina Tax Court decided in favour of AFIP. It held that most of the dividends received by the platform company were directly remitted to its parent company in Argentina. Likewise, the holding company never received dividends from Molinos Chile SA – these being the only dividends that would have been subject to income tax in Chile, as they were of Chilean source. There was thus an abuse of the treaty, as if the dividends obtained by companies incorporated in third countries were remitted directly to the Argentine company, those dividends would be subject to Argentine income tax. For this reason – there being no obstacle in the application of the anti-abuse clauses of the domestic legislation – the National Appellate Court held that it was appropriate to ignore the application of the DTC with Chile in this specific case.

The lack of a real economic link between the Chilean platform company and several Uruguayan companies and a Peruvian society was highlighted. Rents remitted did not remain in the patrimony of the holding company and were not used to fulfil its social object. On the contrary, they were immediately remitted to the majority shareholder in Argentina, so that the Chilean holding acted as a mere conduit; the real beneficiary was Argentine company Molinos.

Molinos has appealed and a decision is awaited from the National Supreme Court.

5.2 What are the main ‘general purpose' anti-avoidance rules or regimes, based on either statute or cases?

See question 5.1.

5.3 What are the major anti-avoidance tax rules (eg, controlled foreign companies, transfer pricing (including thin capitalisation), anti-hybrid rules, limitations on losses or interest deductions)?

In Argentina, the ‘economic reality' principle is incorporated in Section 1 (for interpretation of the tax code) and Section 2 (which allows for the legal structure of an act to be dispensed with in order to reflect the economic and effective intention of the taxpayer) of Law 11,683.

Section 1 provides: "in the interpretation of the provisions of this law or of the tax laws subject to its regime, the purpose of them and their economic significance will be considered ...".

Section 2 provides: "to determine the true nature of the taxable event will be addressed to the acts, situations and economic relationships that are actually carried out, pursued or established by the taxpayers."

Thus, the actual legal forms or structures used may be disregarded in considering the actual taxable event, and the real economic situation will be considered in the light of the economic and effective intention of the taxpayer.

In Kellogg Company Argentina SACIYF (CSJN - 26/2/1985), the Brazilian Supreme Court stated that the principle of economic reality is applicable to both the Treasury and the taxpayer.

In San Buenaventura SRL c / DGI (CSJN - 23/5/2006), the Brazilian Supreme Court confirmed that the basic principle enshrined in Section 2 – whereby the actual legal structure used can be set aside and replaced with one that reflects the true intention of the parties – is limited to cases in which the legal structure adopted is inadequate to achieve the real intention. That is, the legal relationship established between the parties cannot be ignored, on the basis that it does not correspond to the economic reality, if it is not demonstrated that the agreement is not adapted to reality or is manifestly inadequate to reflect the effective intention of the parties. In other words, if AFIP cannot prove this inadequacy, it must respect the agreement between the parties.

The principle of economic reality is also applicable in the presence of a DTC (as is evident in the Molinos case discussed in question 5.1) , although it is not expressly recognised in the text of the treaty. The rule will become operative only in case of ‘simulation of the legal business' and given its status as a long-established principle of the tax system. It was acknowledged by all contracting states at the time of signing of the respective double tax treaties, none of which has imposed any explicit or implicit restrictions on its application.

5.4 Is a ruling process available for specific corporate tax issues or desired domestic or cross-border tax treatments?

Recently, an amicable procedure by mutual agreement was incorporated into Argentine law for countries with which double tax treaties have been concluded, which allows for the appointment of representatives of the two tax administrations in order to resolve any disagreements on tax matters that may arise between them.

Such disagreements include cases of double taxation, as well as divergence in the interpretation and application of tax treaties.

The inclusion of these norms relates to Action 14 of the Base Erosion and Profit Shifting (BEPS) initiative, which aims to make dispute resolution mechanisms more effective.

5.5 Is there a transfer pricing regime?

Yes. The most important is the so-called ‘Sixth Method', adopted pursuant to the principles recently developed under Action 10 of the BES) initiative and integrated within the Organisation for Economic Co-operation and Development guidelines for commodity transactions. The prior Argentine measures included a mandatory method whereby the price was considered as of the shipment date in certain commodity export transactions. The new rules include provisions which require, in the case of exports of commodities where an international intermediary is involved, that the Argentine taxpayer – in addition to complying with the substance test described above – register with the local tax authorities the written agreements in which the price and other conditions of the export have been determined. In the case of failure to register, the pricing of the transaction will be determined based on the price at the shipment date.

Low-tax jurisdictions: The transfer pricing rules apply not only to related-party transactions, but also to transactions when the counterparty is located in a jurisdiction considered to be ‘non-cooperative'. There is also a new concept of ‘low-tax jurisdictions', whereby transactions involving parties in these jurisdictions are subject to transfer pricing scrutiny. A regime has also recently been introduced whereby taxpayers can request the conclusion of a ‘joint determination of prices of international operations' with AFIP, in order to determine the applicable criteria and methodology for the determination of prices, amounts of considerations or profit margins of transactions related to the transfer pricing regime.

Intermediary substance test: For imports and exports of goods where an international intermediary is involved, there is a new requirement whereby the Argentine taxpayer must demonstrate that the compensation paid to that intermediary is aligned with the functions, assets and risks involved in the transactions. This provision will apply when:

  • the intermediary is a related party of the Argentine taxpayer; or
  • the foreign counterparty in the transaction is a related party of the Argentine taxpayer.

5.6 Are there statutory limitation periods?

Under Law 11,683, the statutory limitation period is five years, computable from 1 January of the year following the expiration of the obligation to enter the tax.

6 Compliance

6.1 What are the deadlines for filing company tax returns and paying the relevant tax?

For income tax, the sworn statement must be submitted during the fifth month as from the end of the company's fiscal year. The exact date depends on the termination of the tax number of the company. For example, if the fiscal year ends on 31 December, the deadline for submission will be May the following year.

6.2 What penalties exist for non-compliance, at corporate and executive level?

National and provincial laws provide for the imposition of fines in case of failure to file tax returns, which are called ‘formal fines'. Although these fines are not as high as the penalties for omission or tax fraud (called ‘material fines'), they are likewise transferable in solidarity to the directors or managers of the company.

Failure to file a tax return also allows the Argentine Tax Department (AFIP) to determine the tax pursuant to a presumed procedure with prior notice to the taxpayer. This procedure, called ‘provisional tax payment', could include an amount equivalent to x times the amount of the tax declared or determined with respect to any of the relevant fiscal periods.

6.3 Is there a regime for reporting information at an international or other supranational level (eg, country-by-country reporting)?

AFIP's General Resolution 4130-E establishes a regime that requires the annual presentation of a country-by-country report by local corporations that are members of multinational enterprise groups whose total income is equal to or above €750 million (or the equivalent value in local currency).

7 Consolidation

7.1 Is tax consolidation permitted, on either a tax liability or payment basis, or both?


8 Indirect taxes

8.1 What indirect taxes (eg, goods or service tax, consumption tax, broadcasting tax, value added tax, excise tax) could a corporate taxpayer be exposed to?

Value added tax (VAT): This tax applies to the sale of goods located in Argentina, the provision of services in Argentina and the import of goods into Argentina. Under certain circumstances, services rendered outside Argentina which are effectively used or exploited in Argentina are deemed rendered in Argentina and are therefore subject to VAT.

VAT is levied at each stage of the production or distribution of goods or services on the value added during each stage. Thus, this tax does not have a cumulative effect.

The tax is levied on the difference between the so-called ‘tax debit' and the ‘tax credit'. If this difference is positive, it constitutes the amount to be paid to the Argentine Tax Department.

Turnover tax (tax on gross income): Turnover tax is a local tax levied on gross income. Each province and the City of Buenos Aires apply different tax rates to different activities.

The tax is levied on the amount of gross income resulting from business activities carried on within the respective local jurisdiction.

As each jurisdiction is empowered to set this tax as it sees fit, as a general principle, in each jurisdiction in which activity is undertaken the specific features from turnover tax may vary (eg, the tax rate).

If a company is active across numerous jurisdictions (eg, various provinces and the City of Buenos Aires), the terms of the Multilateral Agreement (Convenio Multilaterial) shall apply. This agreement aims to avoid difficulties arising from the application of this tax and allows for a single tax payment to be made which is then distributed among the relevant provinces.

8.2 Are transfer or other taxes due in relation to the transfer of interests in corporate entities?

The amount of the transfer will be subject to income tax, but otherwise there is no special tax applicable to the transaction.

The tax rates varies depending on who is selling its interest:

  • In the case of a local company, it is considered income and consequently is included in the income tax return; and
  • In the case of an individual (foreign or local) or a foreign company, the tax rate is either:
    • 15% of the difference between the cost of acquisition and the sale price; or
    • 90% of the selling price.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.