Social security contributions
The employer Social Security Tax is payable on the employee’s total monthly compensation and is not subject to any cap amount. The total employer contribution is 26.4% for companies mainly engaged in the provision of services or trade, provided their annual sales exceed the amount established by the regulation that is updated annually (as from April 1, 2022: ARS 1,438,900,000 for services and ARS 5,495,450,000 for trade), and 24% for all other companies.
Argentine employers are exempt from paying social security contributions for the first ARS 7,003.68 per month per employee.
The employee social security withholdings, which include pension fund, health care and social services, are payable on the monthly salary, up to a monthly cap of ARS 410,742.03 (as from June 2022), except for June and December, where the cap is increased by 50% due to the 13th month salary. This salary cap is index-adjusted in March, June, September and December of each year.
The total employee Social Security Tax rate is 17%, which consists of contributions of 11 % to the pension fund, 3% to health care and 3% to social services.
VAT is assessable on the sales value of products (e.g. raw materials, produce, finished, or partly finished merchandise) with few exemptions, most services (e.g. construction, utilities, professional and personal services not derived from employment, rental), and on import of goods and services. The VAT rate is 21%, although certain specific items are subject to a 10.5% and 27% rate. The VAT is also applicable on earning derived from a self-employed activity, at a general rate of 21%. It is paid by filing monthly tax returns.
The increased rate of 27% applies to 'utilities services' (e.g. telecommunications, household gas, running water, sewerage, and energy) not rendered to real estate used for dwelling purposes.
A reduced rate of 10.5% applies to certain transactions, including (but not limited to) the following:
- Construction of housing.
- Interest and other costs on personal loans granted to final consumers by financial institutions.
- Sales and imports of living bovine animals, supply of publicity and advertising in some specific cases.
- Any passenger transportation operating inside the country when the distance does not exceed 100 km.
- Medical assistance in some specific cases.
- Certain capital goods depending on the Custom Duty Code.
VAT paid on purchases, final imports, and rental of automobiles not considered as inventory, cannot be computed by the purchaser as a VAT credit. The same tax treatment applies to other services, such as those provided by restaurants, hotels, and garages.
Registered VAT payers, except for taxpayers carrying out certain activities that, due to the singularities of their transactions, are required to include in their tax returns specific information, are required to use a web-based (online) modality for filing VAT return.
‘Digital transactions’ (e.g. digital services, hosting, online technical support, software services, Internet services) are subject to Argentine VAT at a 21% rate if they are supplied by a non-resident entity to an Argentine customer and there is an effective use in Argentina. The tax is to be paid by the Argentine recipient of the service unless there is an intermediary in the payment of the fee (e.g. bank institutions, credit card issuers), in which case such intermediary will act as a collection agent for the tax.
In addition, foreign beneficiaries carrying out taxable activities within the Argentine territory are also subject to VAT. The resulting tax is to be remitted to the Argentine tax authorities by the local counterpart on a reverse-charge mechanism.
Tax on personal assets (wealth tax)
Individuals domiciled in Argentina as of 31 December, are subject to an annual wealth tax on their worldwide taxable personal assets exceeding the minimum exempt threshold as of 31 December, without consideration of liabilities. These taxable assets include, among other items, real estate, cars and bank accounts. However, savings accounts, term deposits at Argentine banks, Argentine government bonds are tax exempt. Individuals domiciled abroad and working in Argentina for reasons duly proven for a period not longer than five years are assessable only on personal assets located in Argentina.
As of fiscal year 2021, the exempt minimum will rise from ARS 2,000,000 to ARS 6,000,000 (*). Also the Non-taxable minimum for dwelling house was increased from ARS 18,000,000 to ARS 30,000,000 (*). The following tax rates were to fiscal year 2021 on local assets:
(*) Tax rates and exempt minimum will be adjusted annually, considering the annual variation of the Inflation Index (IPC – Consumer Price Index).
Assets held in Argentina:
|Taxable assets (ARS)||Tax on column 1 (ARS)||Tax on excess (%)|
|Over (column 1)||Up to (inclusive)|
Assets held abroad (for tax residents):
|Value of assets held in Argentina and abroad (ARS)||Tax rate (%)|
|Over||Up to (inclusive)|
All taxpayers must file an annual tax return and pay the tax liability in June of each year.
Individuals living abroad who own assets located in Argentina must pay the corresponding tax in full and final settlement through a local representative in June of each year. The tax rate is 0.5%. Tax is not levied where tax liability on each year does not exceed ARS 250.
Shares held in Argentine companies and participation in fideicomisos (local trusts) set up in Argentina are not included in the shareholder’s wealth tax return. However, the respective company and fideicomiso must determine wealth tax on the participation owned by individuals residing in the country or abroad, or owned by companies residing abroad. The wealth tax rate is 0.5% and is payable by the company or local trust to the tax authorities. However, reimbursement from the shareholders can be claimed.
Inheritance and gift taxes
There is no federal gift and inheritance tax in Argentina. However, the province of Buenos Aires has gift and inheritance taxes based on certain conditions and amounts. The federal government and other provinces may introduce similar taxes in the future.
Real property tax and automobile duty
There is no federal real property tax or automobile duty in Argentina. Property taxes fall within the authority of the provinces. Federal property taxes are included in the wealth tax.
Real estate tax is levied on the ownership of real estate properties in each jurisdiction. Automobile duty is levied on the ownership of cars registered (car plate licence) in each jurisdiction.
Amounts are determined by provincial taxation authorities based on the fiscal valuation of the asset (also determined by the tax authority) and the tax rates in force under the annual tax law. Payments must usually be made on a monthly or a bimonthly basis.
Stamp tax is levied by each of the 24 jurisdictions in Argentina and applies principally to contracts and agreements, deeds, mortgages, and other obligations. It also applies to agreements and discharges of a civil, financial, or commercial nature, of which there is written evidence, or in certain instances, that are the subject of entries in books of accounts. The average tax rate is 1% applicable on the economic value of the contract.
In the City of Buenos Aires, the standard tax rate is 0.75% of the aggregate amount of the transactions, contracts, and deeds that are subject to the stamp tax. Special rates of 0.5%, 1%, 1.2%, 1.5%, 3%, and 3.6% are also established; and, in the case of transactions involving uncertain consideration, a fixed tax of ARS 16,460 is applicable (on the fulfilment of certain conditions).
Tax on bank account debits and credits
Debits and credits from bank accounts are subject to this tax at 0.6% on the amount of the transaction. However, the deposit and disposal of employment compensation and pension payments are tax exempt.