Law 27,430 was published today in the Official Bulletin. The issues covered by the Tax Reform are detailed below:
1. Income Tax.
1.1. Corporate Income Tax: The 35% rate is reduced creating a dividend tax as follows:
- Two fiscal years counted as from January 1, 2018: 30% (corporate rate) and 7% (withholding tax on dividends paid to Argentine resident individuals and foreign beneficiaries - effective final tax rate 34.9%)
- Fiscal years counted as from January 1, 2020: 25% (corporate rate) and 13% (withholding tax on dividends paid to Argentine resident individuals and foreign beneficiaries - effective final tax rate of 34.75%)
1.2. Anti-avoidance rules are amended to align them with OECD rules.
1.3. Tax on the Transfer of Real Estate ("ITI") is abrogated; acquisition and sale of real estate is now subject to Income Tax at a 15% rate.
1.4. Certain securities that were exempted from taxes (e.g. bonds issued by the Federal Government) will be subject to tax as follows: (a) securities denominated in foreign currency: 15%, (b) securities denominated in national currency or indexed: 5%; such rate can be increased by the Federal Government up to 15%, (c) stocks listed locally will remain exempted for Argentine resident individuals and for certain foreign beneficiaries, (d) certain public bonds will remain exempted for certain foreign beneficiaries.
1.5. Severance payments paid to executives and directors in excess of minimum amounts set forth by labor law are subject to income tax.
2. Value Added Tax.
2.1. VAT refund procedure for the reimbursement of VAT credits arising from investments made by taxpayers, when such credits were not used within 6 months after the investment was made.
2.2. The VAT taxable base is broadened to include digital services provided by foreign companies (download of videos, games and other contents).
3. Transfer Pricing.
3.1. The Mutual Agreement Procedure ("MAP") is regulated.
3.2. Advanced Transfer Pricing Agreement ("APA") are implemented as local regulations.
4. Independent workers taxes.
4.1. The amount of the special deduction for independent (autónomos) workers is doubled.
5. Social Security contributions made by employers.
5.1. An ARS 12,000 gross salary is established as the minimum non taxable amount for the payment of social security contributions made by employers (contribuciones patronales).
6. Other Taxes.
6.1. Tax on fuels is simplified in order to align it with current environmental regulations and agreements.
6.2. Amendments to Excise Tax rates.
7. Criminal Tax Law.
7.1. Criminal Tax Law amounts are updated.
7.2. Under certain circumstances, the Government may be exempted from filing a criminal complaint.
8.1. An administrative settlement procedure is created.
8.2. A mechanism for the permanent update of the value of fixed amounts included within tax laws is also created.