Understanding Argentina’s tax system is important for all merchants selling there, especially foreign companies. See what are PAIS tax, Ganancia, and more.
Before start investing in Argentina, how about getting to know how taxes work in that country? Some particularities may apply to external merchants, even if they do not have a branch in the territory.
By gaining knowledge of the Argentine fees that are charged, your business will have an adequate understanding of the local trade and be able to analyze its potential profits and sell to the country.
By reading the whole article, you will be able to analyze the main rates levied and all the details of the local tax system. Keep on reading!
Understanding the main rates and taxes in Argentina for companies
The collection of taxes is always done by the Federal Administration of Public Revenue. The country consists of three tax jurisdictions that are applied to a branch or subsidiaries, divided into national, provincial and municipal.
For an online business to start well within Argentine territory, it is necessary to be aware of the main taxes that will be collected. The BoaCompra team will explain in details how each of the fees that will be part of the merchants’ daily life works.
The Argentine government created this new tax in 2019, which is related to the consumption of digital services in the country. The main goal for the creation of this tax in the country is to protect the Dollar reserves (USD) of Argentina.
It focuses on services digitally purchased by end consumers being billed by the bank or credit card payment institution involved in the purchase. The PAIS tax (Impuesto para una Argentina Inclusiva y Solidaria) does not have a mandatory charge on service providers who are not resident in the national territory.
This tax basically works like an additional VAT. Explaining briefly, Value Added Tax (VAT) is a tax unification model. We will approach this tribute later on.
Income Tax (Ganancia)
The calculated income tax depends on the income of that business or individual. Depending on the type of revenue, it may vary from case to case. Payments are made in a given fiscal year.
For legal entities domiciled in the country, it is applied a rate of up to 35%. Business models such as SaaS (Software as a Service) and other foreign-origin corporate stores are subject to this fee.
People and companies who are not residents in the local territory, on the other hand, get a reduction in the rate, reaching 24.50% on the presumed income. A very important detail is that the collection is due only to gains from Argentine sources.
We can define Argentine sources as any income that comes from assets located, used or placed there, in addition to events that produce some economic advantage related to local commerce.
Individuals can be taxed at rates ranging from 9% to 35%, depending on their respective income.
Tax on Gross Income
This is a type of local tax imposed by the provincial government. It is mandatory for all people who carry out any type of commercial activity that is civil, business, for profit and with jurisdiction in any province of the country.
The rate is calculated as a percentage of the income, that is, the rate is around 3.5%. Keep in mind that this number may vary according to the regulation of each Argentine province.
Taxpayers must also file monthly returns, whether it be individuals or legal entities.
The stamp duty is a local Argentine tax that is levied on public or private instruments. These can be defined as a private loan agreement in relation to equity or debt financing.
If it is performed in foreign locations, they may be levied on occasions when such instruments have taken effect in one or more jurisdictions in Argentina. The tax is calculated on the economic value of the contract.
Fees can vary between 0.5% and 2.5%. In the federal capital, Buenos Aires, the rate is 0.5%.
This tax defines that a company resident in Argentine territories, including Argentine subsidiaries of a foreign business, must, mandatorily, include all its capital gains in its taxable income.
Non-resident companies are taxed on gains arising from the disposal of taxable Argentine property.
How BoaCompra helps your company sell in Argentina
Merchants who sell online in Latin America can count on the expertise of BoaCompra by PagSeguro. Our solution allows you to sell to the region through more than 140 local payment methods and local currencies, without the need for opening a firm locally in Argentina or other Latam countries.
In addition, our more than 17 years of expertise in Latin America allow us to help you define the best sales strategies for the region, keeping you updated on new payment methods, taxes, local regulations, etc.
Your company will be able to leverage many benefits by using BoaCompra to expand your market to Argentine businesses. We will cite examples, such as the expansion of the SaaS market and the constant increase in digital payments in the country.
Throughout this post, you were able to understand in more details Argentina’s tax policy and its importance for companies that want to expand their business to this territory.
If you liked the article, subscribe to our newsletter and stay up to date with our content.