Social security taxes withheld by the employer are deductible from employment compensation for income tax purposes.
All personal deductions are also deductible from employment compensation. Employees are required to provide employers the information on personal deductions via an electronic Form 572 in order to be considered for income tax withholding calculations.
The annual electronic form 572 may be filed during the year to update tax deductions when required, but final filing must be done prior to 31 March of the following fiscal year.
Alimony, education and childcare expenses
Alimony, education and childcare expenses are not deductible from PIT returns.
Donations to tax-exempt charitable institutions are deductible up to a maximum of 5% of net income.
Pension and other social security contributions
Pension and other social security contributions withheld by the employer or paid by the individual as self-employed worker are deductible from PIT.
Life insurance and funeral expenses
Life insurance purchased from local authorised insurance companies and funeral expenses are deductible up to a maximum established annually by the tax authorities.
Mortgage and all other interest is not deductible, unless it relates to taxable income. However, mortgage interest paid on loans received for the purchase of personal dwelling property is deductible up to a cap of ARS 20,000 per year.
Individuals and undivided estates are allowed to deduct from their taxable income up to 40% of their rental expenses to the extent they correspond to their dwelling and do not have ownership of any real property, at a maximum of ARS 167,678.40.
Medical care contributions and expenses
Contributions to third-party medical schemes are deductible up to a maximum of 5% of net income. Other medical expenses may be deducted up to a maximum of 40% of all corresponding invoices of the fiscal year, provided the deduction does not exceed 5% of net income.
Domestic staff compensation
Expenses related to personal domestic services could be deducted up to a cap of ARS 167,678.40 per year, provided the domestic personnel is duly registered with the social security regime and the applicable social security contributions were paid on a monthly basis as follows:
|Hours worked weekly||Employee taxes (ARS)||Employer taxes (ARS)||Labour risk insurance (ARS)|
|Less than 12||84.49||29.82||232.16|
|12 to 15||156.55||59.63||371.46|
|16 and up||1,041.22||86.97||573.24|
Deductible amount for domestic personal expenses is changed annually.
Personal tax allowances
Residents and non-residents are allowed to deduct the following annual personal allowances:
|Eligibility for allowance||Annual allowance (ARS)|
|Basic (provided the individual has been living in Argentina at least six months during the calendar year)||167,678.40|
|Child (each younger than 18)||78,833.08|
|Earned income allowance: Employees||804,856.34|
|Earned income allowance: Self-employed workers||335,356.79|
|Earned income allowance: New professionals / entrepreneurs||419,196.02|
Amounts enforced as of fiscal year 2021.
Except for the earned-income allowance, personal and family allowances are applicable only when the taxpayers and their families, if eligible, have been living in Argentina for over six months during the tax year under consideration, and did not obtain income in excess of ARS 167,678.40 during the same period.
All losses and expenses incurred in obtaining and preserving taxable income are deductible, but living, personal and family expenses are not deductible, except for Pension Fund and other social security contributions. In cases where fringe benefits include lump-sum allowances for relocation expenses, household goods transportation, house hunting trip, and so on, only actual expenses incurred, supported by third-party vouchers, can be treated as a ‘business expense’ and accordingly be borne by the company as corporate expenses.
Capital losses can only be deducted from taxable capital gains.
In order for the deduction to be allowed, capital losses must have been suffered in a transaction that, if profitable, would have resulted in taxable income.
Carryback of losses is not permitted.