As a result of the 2017 tax reform, a new WHT on dividend distributions and branch profit remittances has been introduced at a rate of 7% (while the applicable profits tax rate is at 30%) and 13% (when the profits tax rate lowers to 25%).
The tax reform also has abolished the so-called ‘equalisation tax’ for profits generated in taxable years starting on or after 1 January 2018. The equalisation tax was a WHT levied at a 35% rate on dividend distributions in excess of tax earnings. However, the equalisation tax still applies to dividend and branch profit distributions made out of earnings accumulated prior to 1 January 2018 that exceeded tax earnings as of the year-end prior to the relevant distribution.
Other payments to residents and to non-residents are subject to WHT rates as follows:
Notwithstanding the above, in the event of interest paid to a non-resident located in a cooperative jurisdiction in connection with any type of bank deposit (with no indexation clause), government bonds (with no indexation clause), corporate bonds, interest in a local mutual fund, debt certificates in a financial trust, bonds, or other Argentine securities denominated in Argentine currency, the applicable WHT should be 5%. In case the above-referenced securities are denominated in foreign currency or contain an indexation clause, the applicable WHT on interest payments should be 15%. The above WHT may be further reduced to 2.15% or 6.45% (for securities denominated in local currency or foreign currency, respectively) in the situations described in points (i) and (ii) above.
Several other concepts of 'royalties' are subject to rates that, in turn, may be limited by treaty. A broad sample of these concepts and the non-treaty effective rates are set forth in Note 2.
Last Reviewed - 18 June 2019