Indirect tax - Argentina

VAT is the main type of indirect taxation in Argentina.

It is a tax on consumption which is applied during the production and distribution process to most goods and services. It is also applied to goods and services, entering the country.

Although VAT is ultimately borne by the consumer by being included in the price paid, the responsibility for charging, collecting and paying it to the tax authority at each stage of the process rests with the business making the supply ie the sale.

A registered business will charge VAT (output tax) on its sales, and incur VAT (input tax) on its purchases (including any VAT paid at importation). The difference between the output tax and the deductible input tax and the withholding VAT (if it is applicable) in each accounting period will be the amount of VAT payable by the business to the tax authority. Where the input tax exceeds the output tax, a refund cannot be claimed and can only be used against future output tax, except the input credit which is directly linked with exports, for which it is possible to claim a refund. If the excess of VAT credit comes from withholding VAT tax, it is possible to claim the refund.

The VAT will be applied to:

• sales of movable goods – a sale is considered to be any transfer for consideration, among people of visible or ideal existence, which amount to transfer ownership of personal property (sale, barter, payment in kind, award for dissolution of companies, social contributions and judicial sales and auctions any other act that would lead to the same end, except expropriation). It does not include sales or transfers made as a result of corporate reorganisations tax free,
• contracts for the construction of movable assets,
• works on property belonging to third parties,
• construction and sale of property (real estate),
• obtaining goods of nature on behalf of a third party,
• definitive imports of movable assets,
• renderings of financial services performed abroad, the use of which is carried out in Argentina, as long as the renders are taxpayers for other taxable events. Thus they are levied on by tax, the interest from loans granted abroad, fees for technical assistance, etc. The renderers will be responsible of entering the tax.

Digital services provided from outside the country but used within the Country will be considered as service imported and thus taxable with VAT.

The tax should be paid by the recipient Argentina client and could be offset against VT for local sales on the following month from payment.

• For such purposes a broad concept of digital service is applied including but not limited to remote Access, on-line technical support, databases, software services provided through internet, use of platforms, Access or download of images, videos, information, music and games.

The standard rate of this tax is 21%, there also exist special rates:

• 27% – applicable to the sale of natural gas, electric power and regulated running water and telecommunications,
• 10.5% – applied to certain taxable activities related to the construction of property (houses), renderings and sales related to certain products of animal and plant origin, health insurance services, long range and mid-range public transportation, and interests and commissions for loans granted by financial entities in Argentina or abroad. In this last case, when the entity complies with international standards of banking supervision established by the regulations. This special rate also applies to the acquisition and importation of certain durable goods to be used in productive activities,
• 2.5%, 5% or 10.5%, depending on the annual invoicing – applied to newspapers, magazines, journals and advertising spaces.

In addition, some goods and services are exempt from tax.

Businesses that make exempt supplies are unable to claim all of the input tax that they incur, so the VAT paid to suppliers will be a ‘real’ cost, except the exports of goods and services that are exempted with the right to ask for the refund of the tax linked with the exports. The exports of services are the services provided in the country where the effective use is carried abroad.

Most goods imported into Argentina are subject to VAT. The tax will have to be paid by the importer at the time of importation. In addition, customs will collect VAT on this importation. Where the importation is for business purposes and the importer is registered for VAT, this tax is considered an input tax credit.

A ‘person’ who either makes or intends to make taxable supplies of goods or services must register for VAT.

When the person has a small business, they can register in a simplified regime paying a monthly quote of tax which includes direct tax, indirect tax and social security tax. This regime is only for individuals, not for companies. When the amount of the operations exceeds the annual simplified regime limit, the person must register with the tax authorities in the general regime.

A penalty may be imposed by the tax authority if a business fails to register at the correct time.

Non applicable.

When a non-resident wants to do business in Argentina, it is necessary to register with the tax authorities, but when the non-resident does non-recurring activities, this registration is not necessary and Argentina has no withholding tax rules to avoid this omission.

No.

Yes, a non-established person has to appoint a fiscal representative in the tax authority in order to register.

VAT returns normally cover a monthly accounting period, ending on the last day of a calendar month.

All VAT returns have to be submitted electronically within 20 days of the end of the relevant monthly accounting period, together with any tax due.

The tax rules establish different kinds of penalties that the tax authorities may impose on the taxpayers:

• a formal fine when the VAT returns are not submitted on time
• if the corresponding payment is done after the due date, the tax payer must pay interest.

There are two monthly informative regimes, one for sales and another for purchases that must be filed by taxpayers who meet certain conditions and requirements.

Yes, the tax rules establish different kinds of penalties that the tax authorities may impose to the taxpayers:

• a fine when a taxpayer omits to declare the tax. It is graduated from 50% to 100% of the omitted tax,
• a fine when the taxpayers commit a tax fraud. It is graduated from two to ten times the omitted tax. If the amount exceeds the limit established, the ‘Penal Tax Regime’ would be applied.

No.

A VAT invoice must show:

•  the seller’s name and business address,
• the legal address and its registration with the Competent Authority in Corporate Law,
• the seller’s identification number (CUIT),
• the seller’s turnover tax registration number,
• the seller’s VAT status (registered, exempt, simplified regime),
• an invoice number which is unique and sequential,
• the start date of activities,
• the printer’s name and identification number,
• first and last number of the invoices printed,
• printing authorisation code and due date of these invoices,
• a letter which identifies the different kind of invoices, depending on the fiscal status of the seller and purchaser,
• original or duplicate,
• the invoice date,
• the customer’s name and address,
• the customer’s Identification number (CUIT),
• the customer’s VAT status (registered, exempt, simplified regime),
• the quantity and description of the goods or services supplied to the customer,
• unit prices and total, excluding the VAT,
• if the seller invoices in foreign exchange, the invoice will include the exchange rate used,
• the rate of any cash discount,
• the total amount payable, excluding VAT,
• the rate and the total amount of VAT charged,
• the rate and the total amount of collections if applicable,
• the total amount of the invoice.

Where a VAT invoice includes zero-rated or exempt goods or services, it must:

• show clearly that there is no VAT payable on those goods or services,
• show the total of those values separately.

VAT invoices can be issued, received and stored in an electronic format and in the near future all taxpayers will have to issue electronic invoices. The tax authorities established the obligation for taxpayers who met specific conditions, but it is possible for other taxpayers to use this regime after requiring authorisation. Electronic invoices must contain the same information as paper invoices. To ensure the authenticity of origin, the integrity of content and legibility of the invoices, these invoices must contain an electronic authorisation code (CAE) provided by the tax authorities.