德勤-国别投资指南-阿根廷（英文）-25页

Summary of Taxation and Investment in Argentina 2016

Core Content

Argentina's investment and business environment is shaped by its political structure, trade agreements, and regulatory framework. The country operates under a presidential system with a bicameral congress, and provincial governments are similarly structured. It is a member of Mercosur, a trade agreement involving Brazil, Paraguay, Uruguay, and Venezuela, as well as the Latin American Integration Association (LAIA), which aims to promote free trade across Latin America.

Argentina is rich in natural resources and has a diversified industrial base, including agribusiness, chemicals, petrochemicals, motor vehicles, and emerging sectors such as software, biotechnology, and biofuels. The government has introduced incentive regimes to support these sectors, particularly through tax incentives and special zones.

Main Views and Key Information

1. Investment Climate

• Political Structure: Presidential system with a bicameral congress; federal and provincial governments operate with similar structures.
• Trade Agreements:
  • Mercosur: Promotes free movement of goods, services, and people; no import duties on goods from member countries.
  • LAIA: Encourages free trade and progressive tariff reductions.
• Economic Sectors: Key industries include agribusiness, food and beverages, chemicals, petrochemicals, and motor vehicles. Emerging sectors such as software and biotechnology are supported by incentives.
• Foreign Investment: Foreign companies can invest on equal footing with domestic firms without prior approval. However, certain procedures apply for equity holdings and shareholder information.

2. Currency and Exchange Controls

• Currency: Argentine Peso (ARS).
• Exchange Controls:
  • Eliminated requirements for repatriation of foreign currency proceeds within a specified period.
  • Minimum maturity period for repatriation reduced to 120 days.
  • Residents may access foreign exchange up to USD 2 million per month under the "Residents Foreign Asset Accumulation" scheme.
  • Export proceeds must be brought into the country and converted into pesos.

3. Business Entities and Formalities

• Main Business Entities:
  • Corporation (SA): Commonly used, requires minimum capital of ARS 100,000; at least 25% must be paid in at incorporation, with the rest within two years.
  • Limited Liability Company (SRL): Also common, requires minimum capital of 30% of SA's minimum (ARS 30,000); 25% must be paid in at incorporation, with the rest within two years.
• Branch of a Foreign Corporation: Can be registered, but generally, foreign firms prefer subsidiaries to limit liability.
• Registration Requirements:
  • Company name must be vetted by the Superintendentcy of Corporations.
  • Notarized contract and relevant documentation are required for registration.
  • Foreign companies must register with the Superintendentcy of Corporations and file balance sheets and beneficial owner statements.

4. Taxation Overview

• Tax Levels: Federal, provincial, and municipal.
• Main Federal Taxes:
  • Corporate income tax: 35%
  • Payroll tax: 23%–27% of payroll
  • Value Added Tax (VAT): 21%
  • Withholding tax: Varies by type of income (e.g., 10% for dividends, 15.05% for interest, 12.25%–31.5% for royalties)
  • Net wealth tax: 0.5% annually
  • Financial transactions tax: 0.6% per transaction
  • Presumed income tax: 1% on assets of tax residents (excluding resident companies)
• Tax Incentives:
  • Available for mining, software, biotechnology, and biofuel production.
  • Preferential regime for software industry: Tax stability, exemption from VAT, and income tax relief of 60%.
  • Special tax-free zone in Tierra del Fuego.
• Taxation of Income:
  • Residents are taxed on worldwide income.
  • Non-residents are taxed only on Argentine-source income.
  • Dividends from Argentine companies are tax-exempt; dividends from foreign companies are subject to tax with possible credits.
• Deductions:
  • All expenses related to income generation are deductible.
  • Specific deductions include taxes (except income and net worth tax), arm's length payments, director fees, employee salaries, and donations up to 5% of taxable income.
  • Interest deductions are limited by thin capitalization rules.
  • Trademark and patent payments to foreign entities are limited to 80% of the total amount paid.
• Depreciation:
  • Rates range from 2% to 33% (straight-line basis).
  • Common rates: 2% for buildings, 10% for machinery, 20% for tools and vehicles (with a cap for vehicles).
  • Intangible assets without definite life (e.g., goodwill) may not be depreciated.

5. Regulatory and Legal Framework

• Intellectual Property:
  • Governed by Law 22,426 and Law 25,859.
  • Patents are valid for 20 years, with protection against unauthorized use.
  • Trademarks are protected for 10 years and may be renewed.
  • Article 17 of the Constitution and Law 11,723 provide intellectual property rights.
• Mergers and Acquisitions:
  • Supported if they promote efficiency and do not result in monopolies.
  • Mergers involving companies with revenue over ARS 200 million require National Antitrust Commission approval.
• Antitrust Law:
  • Prohibits anti-competitive practices such as price fixing, limiting technical development, and restricting market access.
  • The National Antitrust Commission has broad investigative powers and can impose conditions or cease and desist orders.

6. Accounting and Filing Requirements

• Accounting Standards:
  • Based on FACPCE standards, with alignment to IFRS for public companies.
  • Financial entities are moving toward IFRS by 2018.
• Auditing:
  • Annual financial statements and auditor's opinion are required.
  • Public companies using IFRS must be audited under International Standards on Auditing (ISA).
• Filing:
  • Public companies file with the National Securities Commission and the Buenos Aires Stock Exchange.
  • Private companies file with the Corporate Inspection Department.
  • Additional filings apply to banks, financial institutions, and insurance companies.

Conclusion

Argentina offers a structured business environment with a range of legal and tax incentives for both domestic and foreign investors. While the country has a complex tax and exchange control system, it provides mechanisms to support investment in key industries and special economic zones. Compliance with regulatory requirements is essential for setting up and operating a business in Argentina.