Social security contributions
Withholdings and contributions assessable on employee gross remuneration are as follows:
|Contributions||Employer (%)||Employee (%)|
|Pension Fund, Family Allowance Fund, and Social Services||19.50||14|
|Total social tax||25.50||17|
The above rates have been established as part of a comprehensive tax reform published in December 2017. According to the reform, the above employers’ social contributions (with the exception of Social Health) will be progressively modified from the former combined 17% to 23% (applicable up to 2017) to a 19.5% rate according to the following scheme:
|Employer contributions||Up to 31 December 2019 (%)||Up to 31 December 2020 (%)||Up to 31 December 2021 (%)||As of 1 January 2022 (%)|
|Commercial and service companies with sales exceeding ARS 48 million||20.40||20.10||19.80||19.50|
The maximum remuneration subject to employee contribution is ARS 1,208,357.30 per month as of December 2020. This cap is modified in March, June, September, and December of each year. Employer contributions are not capped.
The Family Allowance Fund entitles an employee to receive a tax-free monthly allowance for their spouse and children, including the education of the latter, provided the employee's family salary is not higher than ARS 155,328 and none of its members individually receives a salary higher than ARS 77,664.
Self-employed persons are subject to pension fund contributions; the monthly payments range from ARS 3,419.20 to ARS 16,454.83 as of December 2020. These contributions are adjusted quarterly.
Depending on the location of the employee, a specific percentage of the social tax basis of the employer's contributions can be offset against the employer's VAT liability in its monthly VAT return. However, no such credit is available in the City of Buenos Aires. Additionally, as part of the Argentine Tax Reform, the amount of this credit will be progressively repealed over a five-year period ending in 2022.
Professionals, researchers, scientists, and technicians contracted abroad to render services in Argentina for a term not exceeding two years and on a once-only basis may be excluded from the system at their own or their employers' request, provided the relevant requirements are fulfilled.
Argentina has entered into totalisation agreements with several countries according to which employee and employer contributions can continue to be paid in the home country for the first 12 months, and can be renewed for another 12 months, with the authorisation of the relevant authorities, and depending on the requirements of each agreement (see Tax treaties in the Foreign tax relief and tax treaties section for more information).
Where the rules of a totalisation agreement are applicable, it should be noted that the individual may be exempt from all or part of the social security contributions in Argentina during a period of time. This will depend on the specific case, and on the agreement.
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, shares, and bank accounts. However, savings accounts and term deposits at Argentine banks 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 2020, the exempt minimum is ARS 2 million, being of application the following tax rates:
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 no longer 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 11,510 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.