Expatriate tax ebook - Argentina

Basis of taxation

Charge to tax
Residence
Income from employment
Source of employment
Benefits (in kind)
Expatriate concessions
Relief for foreign taxes
Deductions against income

Charge to tax
Subject to any double taxation agreements, Argentinean tax is imposed on assessable income. A resident of Argentina is taxed on worldwide income for the period of residency, whilst nonresidents are taxed on Argentinean sourced income only.

Residence
Foreign nationals who have obtained the permanent resident status in Argentina as well as those who have stayed in Argentina, with the relevant authorization, for a period of twelve months are considered to be Argentine residents. Temporary absences from the country, insofaras they do not exceed 90 days (consecutive or not) within such 12-month period, shall not be considered to interrupt the continuity of the foreign national’s permanence in Argentina.

Argentine residents must pay tax on their income and assets in Argentina and abroad.

Income from employment
The definition of assessable income for employment purposes includes wages, salaries, bonuses, gratuities, and allowances if these are received as a reward for services.
Income tax is withheld by the employer responsible for paying salaries or compensation.

Personal exemptions for dependents and certain non-taxable minimums as set forth in the Income Tax Law may be deducted from the taxable basis. These deductible expenses are indirectly related to income, i.e., the higher the income, the lower the percentage that may be computed as a personal deductible expense.

For the above tax deductions to apply, the taxpayer must have stayed in Argentina for a term in excess of six months.

Lastly, any withholdings applied to the employee as income tax as well as any income tax advance payment made shall be deductible for Income Tax purposes.

Source of employment
Income from employment ordinarily has its source in the place in which the services are performed.

Benefits (in kind)
Any payments in kind and additional benefits granted to employees must be included in the employee’s taxable income for purposes of Income Tax withholdings.

Expatriate concessions
This is not applicable in Argentina.

Relief for foreign taxes
Expatriates arriving in Argentina with contracts of employment for terms of up to 5 years shall be liable for Income Tax only on their Argentine source income, which is that earned on the activities performed in Argentina.

Deductions against income
The following expenses shall be tax-deductible for Income Tax purposes:

• Payments made to the pension system and to privately and/or union-run health insurance schemes. Upon computing the latter, any dependents paid by the employee can be considered, to a maximum of 5% of the employee’s net income levied with tax.
• Payments to the self-employed pension scheme, insofaras they have been duly made.
• Life insurance premiums paid (deduction subject to a maximum cap)
• Funeral expenses (deduction subject to a maximum cap)
• Contributions paid to private retirement plans (deduction subject to a maximum cap)
• Voluntary contributions to Pension Fund Managers (deduction subject to a maximum cap)
• Medical fees. It must be noted that the deduction applies to only 40% of such fees up to a maximum of 5% of the employee’s net income levied with tax.
• Payments made to persons hired to do housework (deduction subject to a maximum cap)
  

Information about Argentina:

introduction

facts and figures

basis of taxation

what taxes?

tax planning opportunities