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Legal Framework: Taxes, Customs and Exchange Regulations

Federal Taxes

Income Tax

Argentine companies, either local companies, local subsidiaries of foreign companies (“subsidiaries”) or branches of foreign companies, are subject to federal income tax at a rate of 35% applied on the net income (gross income less admitted deductions and amortizations). At present, payment of dividends or profits to shareholders or owners is not subject to income tax withholding, except when a certain percentage is exceeded: when distributed dividends or profits exceed the net income assessed and accumulated at the closing of the fiscal year previous to the fiscal year in which distribution takes place. In such case, the tax withholding is 35% over the amount exceeding the percentage. 

In 1998, the Republic of Argentina established thin capitalization rules, which limit, in certain cases, the possibility to deduct interest for loans granted by non-financial foreign companies to their subsidiaries.

Treaties for the avoidance of double taxation are in force with Canada, Australia, Great Britain, Sweden, Bolivia, Germany, Brazil, France, Italy, Finland, Denmark, Belgium, Netherlands, Norway and Russia. Argentina entered into, with the United States of America and with Switzerland, treaties for the avoidance of double taxation in 1981 and 1997 respectively, but such treaties are not effective yet. Argentina has reported agreements with Austria in 2009, and with Chile and Spain in 2012. 

Value Added Tax (“VAT”)


This federal tax is applied on the sale of personal property, the rendering of services and the import of goods. The tax rate is 21%.

The difference between VAT credits and VAT debits must be paid to the Argentine Tax Bureau (DGI) on a monthly basis. VAT credits may be carried forward from one month to the other with no time limit.

Particular aspects regarding the oil and mining activity

For VAT purposes, Temporary Associations of Companies (UTEs) are considered to be independent from the companies that are members of such associations. The transactions between such UTEs and the member companies, as well as any transactions between such companies, are subject to VAT. 

Tax on Presumed Minimum Income

Such tax is levied on assets, among others, of the companies domiciled in Argentina and the branches of foreign companies settled in the country. The tax rate is 1%.

This tax may be set off against income tax. 

Tax on Personal Assets

In principle, such tax is applied only to individuals residing in Argentina. However, a foreign company may have to pay this tax in the following cases:

Holding of Shares, Quotas or Participating Interests

Local companies must pay such tax annually with respect to the value of the shares, quotas or participating interests held by individuals and/or undivided estates domiciled in Argentina or abroad, and/or companies and/or any other type of legal entity domiciled abroad. The valuation is made taking into account the proportional net worth value. The tax rate is 0.5%.

The Argentine company paying the tax is entitled to obtain reimbursement from the shareholders either by means of withholdings or upon the foreclosure of the applicable shares.

Direct Asset Holding

Such tax shall be paid on assets belonging to companies or any other legal entity settled or located abroad, in countries not applying regimes for the registration of private securities.

In this case the tax rate would be 2.5%. This criterion does not apply if direct holders are insurance companies, open investment funds, pension funds or a financial or banking entities the head offices of which are located or incorporated in a country where the central banks or similar entities have adopted the international supervision standards set forth by the Basel Bank Committee.

Any Argentine company paying the tax is entitled to obtain reimbursement from the shareholders either by means of withholdings or upon the foreclosure of the applicable shares. 

Tax on Bank Debits and Credits

Such tax is levied on debit and credit activities in bank accounts. The general tax rate is 0.6% each time debit or credit activity occurs. A percentage of 34% over such 0.6% on the credit activity may be calculated for payment of Income Tax or for payment of Tax on Presumed Minimum Income. 

Provincial Taxes

Gross Income Tax

Such local tax is applied on the gross income obtained by entities or individuals that carry out economic activities within the territory of a province. Tax rates vary depending on the activity and the province, but generally range between 1% for primary activities, 3% for trading and 4% for financial activities or intermediation. 

Stamp Tax

Stamp tax is a tax levied on agreements which are either executed within the territory of a province or that cause effects in it. Tax rates vary depending on the type of agreement and the province. Most fiscal codes set forth that agreements will be subject to tax when they are either formalized (i.e., signed by the parties or by means of a notarial deed) or executed by exchange of letters. Consequently, it became a common practice among several companies to execute agreements with acceptance by way of action. Generally, the action consists of a bank deposit or delivery of a certain product referred to in the agreement. At present, the only provinces that have expressly levied agreements executed with an acceptance by way of action are Tierra del Fuego and Neuquén, but this extension of the tax is questionable from the constitutional point of view. 


Law No. 22415, also known as the Argentine Customs Code, governs foreign trade matters for the whole land, water and air areas subject to the sovereignty of the Republic of Argentina. As part of such areas, the law defines the concepts of “general customs territory” and “special customs territory”, depending upon the application of a general or special tariff system of economic prohibitions on imports and exports. An example of a special customs territory is Isla Grande de Tierra del Fuego.

The Argentine Customs Code provides for different import and export modalities. The most common modalities include the following:

  • Import for consumption: In this case, imported goods may stay for an indefinite time within the customs territory.
  • Temporary import: Under this modality, imported goods may stay for a specific purpose and for a certain term within the customs territory. Goods may undergo a transformation or not, but as from the time of their release, they are subject to the obligation of being re-exported for consumption prior to expiration of the above-stated term.
  • Export for consumption: In this case, exported goods may stay for an indefinite time outside the customs territory.
  • Temporary export: Under this modality, exported goods may stay for a specific purpose and for a certain term outside the customs territory, and they may undergo a transformation or not. As from the very moment of the export, goods are subject to the obligation of being re-imported for consumption prior to expiration of the above-stated term.

Both imports and exports for consumption are subject to taxes, the type and amount of which depend on the relevant goods. Temporary imports and exports are not subject to taxes.

For the specific case of hydrocarbons, upon enactment of Law No. 25561 (Law on Economic Emergency, of January 6, 2002), the application of export duties on hydrocarbons was set forth. Such export duties have varied throughout time and they are used to regulate domestic prices; rates reach 45% for crude oil export, and 100% of the value of natural gas for import applicable to natural gas export.

Such duties have also reached other products such as minerals not comprised in prior fiscal stability (between 5% and 10%), agricultural products (soybean, 35%), machinery and equipment in general. 

Exchange Regulations

As from the second semester of 2011, and as a result of the process of acceleration of the capital outflow that took place in October 2011, the Argentine government implemented several exchange measures intended to restrict the free outflow of currency.

To sum up, the current situation is the following:

  • Dividends: Even though there are no restrictions from the legal point of view to transfer dividends, the prior consent of the Central Bank of the Republic of Argentina (BCRA) is required.
  • Debt Principal and Interest: They may be freely transferred – at maturity – in the event that the loan had been previously reported to the Central Bank of the Republic of Argentina, in compliance with such entity’s applicable rules and regulations. Any extensions must also meet the BCRA’s requirements in order to freely transfer funds abroad.
  • Imports of Goods: Payments abroad may be made upon satisfaction of the following requirements:

    The Argentine Administration of Public Revenues (AFIP), through General Resolution No. 3252/12 (effective since February 2012), created a system of Import Anticipated Sworn Statement (Declaración Jurada Anticipada de Importación) or “DJAI”, establishing for importers the obligation to file the DJAI before AFIP prior to any import transaction. The DJAI includes data regarding the description of goods and price, and it is filed to AFIP and the Secretary of Domestic Trade, among others, that may object to the imports within a term not exceeding 15 business days.
  • Imports of Services: The procedure established for the import of goods is also applicable to certain services, such as, trademark and patent license agreements, royalties and technology contracts.

    Through General Resolution No. 3276, AFIP created the Service Anticipated Sworn Statement (Declaración Jurada Anticipada de Servicios) or “DJAS” for services rendered by parties abroad to purchasers residing in Argentina, for an amount exceeding USD 100,000 per year. The payment abroad of such service requires AFIP’s approval and the BCRA’s consent for any transactions exceeding USD 100,000 per year.
  • Exports of Goods and Services: Foreign currency must be cleared into the local market within the different terms established by the Central Bank of the Republic of Argentina.

To control the inflow of currency towards Argentina, and for the purpose of maintaining a controlled exchange rate, in 2005, the Government implemented certain measures establishing that any currencies entering the country is subject to a 30% withholding (encaje) by means of a single annual bank deposit in US dollars, for which no interest is accrued.

The main exceptions to such reserve are the following:

  • Direct foreign investments (defined as a holding of 10% or more of a company’s capital stock).
  • Income from financial indebtedness abroad undertaken for the purpose of acquiring non-financial assets in the Republic of Argentina, provided that such debt had been taken for a term not exceeding two years, including payment of principal and interest. The term “non-financial assets” means: (i) investments in fixed assets; (ii) intangible assets for mining costs; (iii) research and exploration expenses; (iv) acquisition of exploitation rights recorded as “intangible assets”; (v) investments in assets similar to intellectual property rights recorded as “intangible assets”.
  • Investments intended to acquire real property by parties not residing in the Republic of Argentina.
  • Debt borrowed from credit multilateral and bilateral entities, either directly or through their agencies.
  • Other financial indebtedness abroad to repay foreign debt and/or to create Long-Term Foreign Assets.
  • Purchase of goods and services to be recorded as “inventories”, to the extent that they do not constitute financial assets.

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