Corporate Tax 2010 - BMR Advisors

Negri & Teijeiro Abogados
Argentina
domestic income tax reform) may not override the provisions of an
existing tax treaty.
The Argentine treaty provisions are silent on the allowance of
applying general anti-avoidance rules in a treaty context or
preventing treaty-partner countries from doing so. As a result,
Argentine courts and tax authorities would not be limited in
applying these rules in a treaty ruled scenario. Nonetheless, due to
the constitutional status of tax treaties, if a limitation of benefits
clause were included, the application of domestic anti-avoidance
rules in conflict with that treaty clause would not prevail.
2 Transaction Taxes
2.1 Are there any documentary taxes in Argentina
The Argentine provinces and the Autonomous City of Buenos Aires
impose stamp tax on written contracts and other instruments
documenting transactions entered into for consideration, if: (i)
executed; or (ii) performed in the taxing jurisdiction. The taxable
event consists of the execution of the document itself, despite
potential subsequent circumstances that might modify the
transaction or its terms and conditions after the execution date.
Applicable stamp tax rates vary depending on the taxing
jurisdiction and the type of transaction.
2.2 Do you have Value Added Tax (or a similar tax) If so, at
what rate or rates
Value Added Tax
Value-added tax (“VAT”) is levied on three different classes of
transactions, namely: the sale of tangible personal property within
Argentina; the import of tangible personal property and services
into Argentina; and the provision of services within Argentina.
Taxable services include financial services. The general VAT rate is
21%, although certain sales and services may be subject to a 10.5%
rate or exempted altogether. Utilities (e.g., telephone, electricity,
water and gas supplies) provided to VAT registered taxpayers are
subject to a 27% rate. Exports of tangible personal property and
services are subject to a zero rate system. This means that
Argentine exporters are allowed to recover, by way of refund, VAT
paid to their suppliers for the inputs utilised to manufacture or
perform exported goods or services.
Gross Turnover Tax
Gross turnover tax is a provincial tax. Argentine provinces and the
Autonomous City of Buenos Aires levy this tax on the gross
turnover of companies conducting business activities within their
jurisdictions. The applicable tax rates vary depending on the
specific jurisdiction. In addition, certain provinces exempt from
this tax specific economic activities.
If a company engages in business activities in several provinces, it
would likely be subject to gross turnover tax in each of them. In
that case, it would have to allocate its gross receipts among the
relevant provinces based on a formula that considers the amount of
revenues and expenses and the places where obtained or incurred
respectively. The gross turnover tax is deductible for Argentine
federal income tax purposes.
well as the rendering of certain educational, medical and transportation
services, among others, are transactions exempted from VAT.
2.4 Is it always fully recoverable by all businesses If not,
what are the relevant restrictions
If related to a taxable transaction, input VAT is always recoverable
by registered taxpayers against VAT taxable outputs. VAT
registered taxpayers are required to pay VAT to their suppliers
(input VAT) and to collect VAT from their customers (output VAT).
Input VAT is credited against output VAT within the relevant period.
Any excess input VAT in a given period may be carried over and
credited against future output VAT. This feature makes the VAT a
neutral tax on consumption effectively borne only by final
consumers. The tax loses its neutral character if a single participant
in the production process is not a VAT registered taxpayer (e.g., a
non-resident). In this case, the VAT charged to that participant may
not be treated as a credit either by it or by the subsequent
participants. Thus, the VAT paid at that stage becomes an additional
cost of the goods or services.
Excess output VAT over input VAT constitutes the taxpayer’s VAT
liability. If the VAT paid to suppliers in a particular period exceeds
the VAT collected from customers during that period, the VAT
taxpayer holds a credit position, which can be carried over to
subsequent periods. This credit can only be recovered by offsetting
it against future output VAT; neither offset against other taxes nor
cash refund can be requested for excess input VAT credits.
Although, as a general rule, the export of services is exempt from
VAT, services rendered by Argentine registered VAT taxpayers to
non-residents are subject to VAT if they are utilised in Argentina.
Non-residents cannot request a refund for the VAT charged in these
situations, and, hence, the VAT becomes an additional cost of the
services.
Services rendered by non-residents to Argentine registered VAT
taxpayers are subject to VAT. A reverse charge system applies in
these cases. Argentine purchasers of services provided by nonresidents
must pay the corresponding VAT directly to the Argentine
tax authorities, and an equivalent input VAT credit is available to the
taxpayer the month following that in which the VAT taxable event
occurred.
2.5 Are there any other transaction taxes
Financial Transactions Tax
All credits to and debits from bank accounts held at Argentine
financial institutions, as well as certain cash payments, are subject to
a financial transactions tax, which is assessed at a rate of 0.6%. A
credit against the income tax and/or the minimum presumed income
tax is granted for a portion of this financial transactions tax. Argentine
financial institutions are required to withhold the tax from both the
transferor and the transferee when a transfer of funds is effected. In
the case of international wire transfers, this tax applies only to the
Argentine transferor or transferee, as the case may be.
2.6 Are there any other indirect taxes of which we should be
aware
Argentina
2.3 Is VAT (or any similar tax) charged on all transactions or
are there any relevant exclusions
VAT has a general scope of application under Argentine Law.
However, relevant exclusions apply. The sale of books and aircraft, as
ICLG TO: CORPORATE TAX 2010
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Excise duties are levied as a one-step transaction tax (i.e.,
applicable on the first sale or import of the goods) on particular
types of goods and services (e.g., specific electronic devises,
alcoholic beverages, soft drinks, tobacco, automobiles, cellular
telephone services, and other luxury items). Customs duties are
generally payable on exported and imported goods.
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