A foreigner living in Argentina, who is not an employee, will become a tax resident after the 12th month residing there, even if he or she has been absent for a temporary period.

Tax residents in Argentina are subject to personal income tax on their worldwide income, whereas non-residents are taxed on their Argentine-source income.

Personal income tax rates are progressive from 9% up to 35% for income in excess of ARS120,000. The self-employed are also subject to a provincial tax on their gross earnings, which is a 4% rate on average.

Dividends received both from local and foreign entities are subject to income tax at standard rates. Interest income, whether from a local or foreign source, are subject to income tax.

Interest income from Argentine or foreign sources are subject to PIT. However, the interest on savings bank accounts, term deposits in Argentine banks and interest derived from government bonds is exempt from taxation. Rental income is taxable at standard rates.

Capital gains derived from the transfer of movable property are subject to a flat tax rate of 15%. However, those derived from the transfer of securities listed in the Argentine Security Exchange Commission (Comisión Nacional de Valores) may be exempt.

Argentina has a controlled foreign companies regime. Tax residents owning shares of a company resident in a noncooperative jurisdiction should include in their taxable income the taxable profits of the controlled foreign company derived from passive income. However, taxation will not apply if 50% of profits of the foreign company are related to active income.

There is a provincial real property tax. Transfers of assets are usually subject to a stamp duty that ranges from 1% to 4%. Inheritance tax is levied by the provinces of Buenos Aires and Entre Rios. A net worth tax is levied on personal assets over ARS950,000 (ARS1,050,000 in 2018).

The V.A.T. standard rate is 21%, although certain goods and services are subject to a reduced rate of 10.5% or an increased tax rate of 27%.

With regard to corporate taxation, resident entities are taxed on their worldwide income, but a tax credit for foreign tax paid is usually available.The corporate income tax standard rate is 35%.

Dividends received from resident entities are exempt from taxation. Those received from foreign companies are included in taxable income, but a tax credit for foreign tax paid may be available.

Capital gains are treated as ordinary income, and therefore subject to corporation tax at standard rate.

Payments to non-residents on dividends are usually exempt from withholding tax. Regarding interests, the standard withholding tax rate is 35%, although a reduced rate of 15.5% may apply in certain circumstances. Royalties are usually taxed at an effective withholding tax rate of 12.25%. Withholding tax rates may be reduced or eliminated under a tax treaty.

For further information on corporate legal framework, taxation and tax treaties, check out incorporations.io/argentina.