Income tax in Argentina is progressive for individuals, meaning the tax rate increases as income levels rise. This system ensures that higher-income individuals contribute a larger proportion of their earnings in taxes. There is no specific method stated in the legislation for allocating the tax credit related to exports, but taxpayers are able to use any methods of calculation that would be suitable to their business model. VAT paid on purchases, final imports, and rental of automobiles not considered as inventory cannot be computed by the purchaser as a VAT credit.
VAT reporting obligations – why the changes are required?
Our lawyers in Argentina can help you with all the formalities before starting business activities in this country. If a taxpayer is not domiciled or incorporated in Argentina, they should register as long as they have a physical presence (i.e., permanent establishment) in the country. You must register if you habitually or incidentally sell movable property, provide services, or import goods. Now that the content of ViDA package is politically agreed and formal adoption is likely to follow, we recommend that you begin assessing the impact for your organization.
VAT for digital products in Argentina
An annual wealth tax is levied on the shares or holding in the capital of local companies owned by individuals or undivided estates domiciled in Argentina or abroad, and/or companies and/or any other type of legal person domiciled abroad. It shall be assessed and paid directly by the local company as a full and final payment on behalf of the shareholders (the issuing company has the right to recover from the shareholder the tax paid). Trent is a Senior Tax Technology expert at Fonoa with over 8 years of experience in providing e-invoicing compliance and global digital reporting advisory. Specializing in delivering tailored e-invoicing solutions, Trent helps businesses streamline operations and meet regulatory requirements efficiently.
What are the VAT rates in Argentina in 2025?
As a result, the supplier will charge the fee on top of the purchase value, which includes the price and the VAT. The local entity must issue salary slips every month for each employee included on its payroll, considering the total compensation mentioned above. An expedient VAT recovery mechanism for VAT credit balances on certain infrastructure and investments in capital goods is available, to the extent that companies have not been able to recover the VAT within six months. VAT/IVA is administered by the Federal Administration for Public Revenues, while IIBB is administered by the revenue service of each province — Dirección General de Rentas. Our Argentine lawyer is ready to assist clients in any legal matter they may deal with.
Argentina VAT updates for 2025
The tax rates and regulations may differ between provinces, as they have the authority to establish their own tax policies. Each of the 24 jurisdictions into which Argentina is divided imposes a tax on gross revenues from the sale of goods and services. Exports of goods are exempt, and certain industries are subject to a reduced tax rate. All companies registered for VAT purposes in Argentina are obliged to use electronic invoices.
The content of a VAT invoice in Argentina
These fees contribute to the funding of essential municipal services such as lighting, garbage collection, and maintenance of public spaces. Throughout this guide, we will discuss tax incentives, recent tax reforms, and international taxation in Argentina. We will also shed light on the social security taxes imposed on employers and employees, ensuring a comprehensive understanding of the Argentina tax system as a whole.
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By providing these incentives, the government aims to stimulate economic growth, attract investments, and create job opportunities in key sectors of the economy. AFIP’s role in tax administration is crucial for ensuring the effective functioning of the tax system in Argentina. By enforcing tax laws and regulations, AFIP contributes to the generation of public revenue, which is essential for the country’s economic development and provision of public services. The general tax regime in Argentina encompasses individuals and businesses that are subject to various taxes, including income tax, value-added tax (VAT), and property tax.
Argentina: New Perception VAT Regime on Sale of Food and Products for Human Consumption
Under the digital service rules in Argentina, VAT is not collected and remitted by the supplier. The VAT Directive dates from the 1970s and, as such, the default reporting requirements are not digital. However, the global trend shows a move from traditional VAT compliance towards real-time sharing of transaction-based data with tax administrations, often based on e-invoicing. This trend is also visible in the EU and many Member States have already introduced or are planning to implement different digital reporting obligations domestically. The revenue collected from these federal taxes plays a vital role in financing public services, infrastructure development, education, healthcare, and other essential programs that benefit Argentine citizens.
What if I already use electronic invoicing?
Furthermore, AFIP administers social security contributions, which include employer and employee contributions. It ensures that employers fulfill their obligations towards social security by collecting and allocating the necessary funds for pension, healthcare, and other social security benefits. Similar to the turnover tax, real estate tax is imposed by each Argentine jurisdiction. It is levied on the ownership of real estate located in the territory of the jurisdiction. The tax credit related to exports and other taxable activities can only be refunded in proportion to the exports, and can be fully refunded to a cap of 21% of the freight on board (FOB) value of the exported products.
Australia’s Digital Tax Policy
- Fonoa is incorporating a specific field for indirect national taxes and adjusting the placement of tax information on invoices and receipts to ensure compliance with the mandate.
- Each province in Argentina has its own tax system, independent of the federal tax regulations.
- The specific rates and regulations for foreign trade taxes in Argentina are determined by the country’s tax laws and customs regulations.
- Additionally, we will explore the municipal fees that municipalities impose for services like lighting and garbage collection.
- This includes internet services, software, technical support online, and other digital services.
- Discover in this article how the registration of VAT in Argentina in 2025 of local and international companies is done.
- Regarding digital products for sale in Argentina, VAT is imposed depending on the number of sales registered in the country and the type of business, whether B2B or B2C.
- The same tax treatment applies to other services, such as those provided by restaurants, hotels, and garages.
The government has introduced measures to streamline tax processes, enhance taxpayer compliance, and reduce the administrative burden. Under these tax treaties, the participating countries agree to allocate taxing rights and establish mechanisms for the exchange of information. This helps to ensure that taxpayers are not subject to excessive taxation and promotes a fair and efficient international tax system. It’s important to note that the specific fees and rates can vary between municipalities, so it’s essential for property owners and residents to familiarize themselves with the regulations and fee structures of their local municipality.
Financial transaction information
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- Services rendered within the country shall be deemed to be exports if they are effectively applied or economically utilised outside the country.
- Monthly VAT returns must be submitted by all companies with an Argentinian VAT number, detailing all taxable supplies (sales) and inputs (costs).
- These agreements provide clear rules for determining the allocation of taxing rights and specify the conditions for claiming benefits such as reduced tax rates or exemptions.
- There are different types of electronic invoices, also called electronic receipts, depending on the tax status of both the issuer and the recipient.
- This guide covers the essential steps ecommerce sellers need to take now that the UK has left the EU Customs Union and VAT regime to keep their cross-border sales going, avoid extra tax costs and frustrated customers.
- Invoices will now detail VAT and “Other Indirect National Taxes.” Existing electronic systems will reflect these changes in XML automatically, with updates required in PDFs.
- Fonoa is well-positioned to assist businesses in updating their invoicing systems to comply with these new requirements, enhancing their service offerings and ensuring compliance with the new regulations.
Argentina’s Cross-Border Data Transfer Regulation
Regarding the internal documents of a company with economic activities in Argentina, these should also contain notifications regarding the VAT corrections, where applicable. This guide provides an in-depth overview of VAT (Value Added Tax) in Argentina, including applicable rates, registration requirements, invoicing rules, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Argentina or with Argentine customers. The liability for return filing and payment of taxes does not fall on the foreign service provider, but rather on the credit card or financial institution that withholds VAT, or the Argentine recipient that collects and remits the VAT. The non-resident digital service provider should not be required to file a VAT return in Argentina. Argentina’s tax treaties cover a wide range of areas, including income tax, capital gains tax, withholding tax, and more, allowing for the effective management of tax liabilities in international transactions.
In preparation for the new rules, businesses will have to make significant changes to their systems and processes, and in order to be ready to implement these in a timely manner, it is important to consider and prepare for these on time. The taxpayers must report such transactions up to the due date for filing the Income Tax return for the fiscal year to which they correspond. There will be no possibility to continue issuing summary invoices for a calendar month as it goes against the aim of the almost real-time reporting system. Understanding the municipal fees in Argentina is crucial for property owners and residents to effectively manage their finances and contribute to the sustainable development of their local communities. There is no restriction regarding the employment of foreigners, provided they hold working visas. Invoices and receipts must include a section detailing the amount corresponding to VAT and other indirect national taxes.
- Many Chinese firms, particularly those with state backing, are smaller or operate through local partnerships, making them less affected by VAT compliance shifts.
- VAT is collected at each stage of the supply chain, ensuring that taxes are paid on the value added at each step.
- Regarding the internal documents of a company with economic activities in Argentina, these should also contain notifications regarding the VAT corrections, where applicable.
- The document will record the amount received in a discriminated manner and with express mention of this regime.
- Stay up to date with the latest tax and compliance updates that may impact your business.
- Exports of goods are exempt, and certain industries are subject to a reduced tax rate.
- The non-resident digital service provider should not be required to file a VAT return in Argentina.
- The system generates a pro forma VAT return that the taxpayer must validate or amend, allowing the tax authority real-time oversight of transactions and VAT balances.
A digital service is taxable in Argentina if it is supplied by a non-resident and used or effectively exploited within the jurisdiction. Compliance and advisory services for value added tax, customs and excise duties, as well as indirect environmental taxes and levies. The international transactions to be reported are those carried out during https://www.vatupdate.com/2019/10/09/argentina-implements-digital-vat-book/ the fiscal years of the reporting entity that close on or after 1 August 2022. On 8 December 2022 the European Commission published the following proposals with regards to the digital reporting requirements and e-Invoicing. This percentage will be 1.50% in the case of operations taxed with a rate equivalent to 50% of the general VAT tax rate.
It is important for individuals and businesses to comply with their tax obligations and keep abreast of any changes or updates to the tax laws. To ensure fairness and sustainability, the social security tax rates in Argentina are determined based on factors such as the type of activity and the annual sales of the company. These rates are periodically reviewed and adjusted as per the prevailing economic conditions and social security requirements of the country. Argentina has implemented tax incentives to promote specific activities and investments. These incentives may include tax credits, exemptions, or reduced tax rates for eligible taxpayers.
KPMG Personalization
These should include detailed information about each transaction, sales, costs, exits, and returns, where applicable. It is good to know that VAT returns can be prepared and submitted with the help of our specialists, to avoid possible errors that may occur along the way. Considering the details above, you can get an idea about Argentinian VAT registration for a foreign company.
VAT Filing and Payment Deadlines
These agreements provide clear rules for determining the allocation of taxing rights and specify the conditions for claiming benefits such as reduced tax rates or exemptions. They also establish procedures for resolving disputes between the tax authorities of the participating countries. Argentina has entered into agreements on the avoidance of double taxation with several countries in order to facilitate cross-border trade and investment. These agreements, commonly known as tax treaties or double taxation agreements, aim to prevent individuals and businesses from being taxed twice on the same income or profits. Each province in Argentina has its own tax system, independent of the federal tax regulations. These provinces levy various taxes on income, property, and business turnover, contributing to the overall tax structure of the country.
- In the city of Buenos Aires, the standard tax rate is 1% of the aggregate amount of the transactions, contracts, and deeds that are subject to the stamp tax.
- The tax reform in Argentina includes measures such as digitalization of tax procedures, introduction of online tax filing systems, and strengthening of tax audit capabilities.
- In doing so, they will electronically generate the “Libro IVA digital” (Digital VAT Book).
- It is designed for businesses engaging in transactions within Argentina or with Argentine customers.
- Both the local company and the employees will be subject to the corresponding regulations.
- Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
- A digital service is taxable in Argentina if it is supplied by a non-resident and used or effectively exploited within the jurisdiction.
- Taxable people registered for VAT purposes will also be subject to this regime when acquiring said products.
ARCA has announced a Consumer Tax Transparency Regime, requiring large companies to itemize VAT and other indirect taxes on invoices starting January 1, 2025. This initiative aims to provide consumers with a clear breakdown of tax components in their purchases, enhancing transparency and informed decision-making. Provincial and municipal authorities are encouraged to adopt similar measures for local taxes.
Under this regime, taxpayers must comply with a range of tax obligations and regulations. All VAT-taxable persons, including those with exempt transactions, must record all transactions, including imports and exports, on the AFIP website. The system generates a pro forma VAT return that the taxpayer must validate or amend, allowing the tax authority real-time oversight of transactions and VAT balances. DRR is any obligation for VAT taxable persons to periodically or continuously submit data in a digital way on all (or most of) their transactions, including by means of mandatory e-invoicing, to the tax authority.