From April 1, 2019, all taxpayers registered for VAT, the simplified regime and exempt entities should issue an e-invoice for any type of transaction and request the authorization code detailed below. RG 4597 AFIP establishes a system for electronic registration of sales, purchase, assignments, exports and definitive imports of goods and services, locations and benefits, called “Digital VAT Book”. Tax payers are obliged to electronically register their operations through this regime. The proposal changes the current situation, providing that electronic invoicing (without a clearing system and only structured electronic files) will be the default system for the issuance of invoices. Taxable persons will always be allowed to issue electronic invoices according to the European standard.
Brazil’s Digital Tax Policy
This guide covers the essential steps ecommerce sellers need to take now that the UK has left the EU Customs Union and VAT regime to keep their cross-border sales going, avoid extra tax costs and frustrated customers. Non-established businesses — those with no fixed establishment in Argentina — must register as a taxpayer for VAT if they supply goods or services in Argentina. The measure requires invoices to include VAT and other indirect national taxes starting January 1, 2025. This change allows consumers to see the tax impact of each purchase, promoting transparency.
- On the other hand, citizens living here can choose us when applying for Argentine citizenship.
- As such, the business owners must first apply for this regime, and obtain authorization from the tax authorities in Argentina.
- Invoices and receipts must include a section detailing the amount corresponding to VAT and other indirect national taxes.
- The standard VAT rate in Argentina is 21%, but there is also a higher rate of this tax, of 27%, which applies to the services offered by the suppliers of gas, energy, water, and mobile telephony.
- The goal of these taxes is to regulate and control foreign trade, while also generating revenue for the government.
- As a result, the tax authorities will assign an Electronic Authorization Code (Código de Autorización Electrónico or CAE), which is included in every issued electronic invoice.
Argentina Introduces VAT Itemization Mandate
In Argentina, the responsibility for VAT collection and remittance does not lie with the foreign service provider. Since it is the credit card or financial institution that should withhold VAT, or the recipient that should collect and remit the VAT, the non-resident digital service provider should not need to register for VAT in Argentina. In order to minimizing the administrative burden for taxable persons, the reporting system will take advantage of the issuance of an electronic invoice to automate the process of reporting.
Digital Reporting Requirements for Cross-Border Digital Services
As such, the business owners must first apply for this regime, and obtain authorization from the tax authorities in Argentina. Once accepted, the tax authorities can assign an Electronic Authorization Code or CAE which must be incorporated in any electronic invoice issued. All financial transactions of the companies must be registered, according to the laws of Argentina. This includes the VAT, an important tax imposed on most consumer goods and services. Therefore, any fiscal receipt or bill must also contain details about the imposed VAT.
Tax Technology Alerts
VAT is applied on the sale of goods and services within Argentina, as well as on imports. The system aligns with global standards but includes specific requirements unique to the country. The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
VAT for digital products in Argentina
These should include detailed information about each transaction, sales, costs, exits, and returns, where applicable. It is good to know that VAT returns can be prepared and submitted with the help of our specialists, to avoid possible errors that may occur along the way. Considering the details above, you can get an idea about Argentinian VAT registration for a foreign company.
- However, reduced rates may apply to specific items, such as essential food products and certain services.
- Argentina’s system of tax treaties and foreign trade taxes represents a balanced approach toward international taxation.
- It shall be assessed and paid directly by the local company as a full and final payment on behalf of the shareholders (the issuing company has the right to recover from the shareholder the tax paid).
- VAT/IVA is administered by the Federal Administration for Public Revenues, while IIBB is administered by the revenue service of each province — Dirección General de Rentas.
- Excise taxes are levied on specific products in Argentina, such as tobacco, alcohol, and gasoline.
- It’s important to note that the specific fees and rates can vary between municipalities, so it’s essential for property owners and residents to familiarize themselves with the regulations and fee structures of their local municipality.
- A taxable person that has paid too much VAT in a period in error may request a refund of the overpaid amount.
Corporate – Other taxes
Furthermore, AFIP administers social security contributions, which include employer and employee contributions. It ensures that employers fulfill their obligations towards social security by collecting and allocating the necessary funds for pension, healthcare, and other social security benefits. Similar to the turnover tax, real estate tax is imposed by each Argentine jurisdiction. It is levied on the ownership of real estate located in the territory of the jurisdiction. The tax credit related to exports and other taxable activities can only be refunded in proportion to the exports, and can be fully refunded to a cap of 21% of the freight on board (FOB) value of the exported products.
VAT Payments and Returns in Argentina
If the payment is made by credit card or financial institution, they should act as withholding agents and remit the VAT amount to the tax authority. Otherwise, the Argentine recipient should pay the VAT to the tax authority (self-assessment). Taxpayers that are registered for VAT or are exempt should report their purchases of digital services from non-resident suppliers electronically to the AFIP. In doing so, they will electronically generate the “Libro IVA digital” (Digital VAT Book).
Designed to Help Businesses Be Compliant and Grow Rapidly
The government has introduced measures to streamline tax processes, enhance taxpayer compliance, and reduce the administrative burden. Under these tax treaties, the participating countries agree to allocate taxing rights and establish mechanisms for the exchange of information. This helps to ensure that taxpayers are not subject https://www.vatupdate.com/2019/10/09/argentina-implements-digital-vat-book/ to excessive taxation and promotes a fair and efficient international tax system. It’s important to note that the specific fees and rates can vary between municipalities, so it’s essential for property owners and residents to familiarize themselves with the regulations and fee structures of their local municipality.
ARCA’s Consumer Tax Transparency Regime: What Large Companies Need to Know
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Each municipality sets its own fixed rates for these fees, which are then applied to residential, commercial, and industrial properties within their jurisdiction. Excise taxes are levied on specific products in Argentina, such as tobacco, alcohol, and gasoline. These taxes are designed to discourage the consumption of certain goods and contribute to public health and environmental goals.
Voluntary Registration
In Argentina, the Federal Administration of Public Revenue (AFIP) plays a crucial role in the administration and collection of taxes. AFIP oversees the general tax administration, customs, and social security, ensuring compliance with tax regulations and facilitating the smooth functioning of the tax system. However, reduced rates may apply to specific items, such as essential food products and certain services. VAT is collected at each stage of the supply chain, ensuring that taxes are paid on the value added at each step. The local employer must withhold income tax on an actual and monthly basis and make the corresponding payments to the tax authorities through monthly WHT returns.
AFIP also handles customs-related matters, including the collection of import and export duties. It establishes regulations and processes for customs declarations, inspections, and clearance of goods. By supervising customs operations, AFIP ensures compliance with trade regulations and manages the flow of goods in and out of the country. To determine eligibility for the simplified tax system, specific criteria related to revenue thresholds, business activity, and legal form must be met. The requirements and conditions for participation are established by the tax authority.
- DRRs can be distinguished into Periodic Transaction Controls (e.g.. SAF-T) or Continuous Transaction Controls (e.g. real-time reporting or mandatory e-invoicing).
- In order to apply for this regime, an authorisation must be obtained from the tax authorities.
- Taxpayers that are registered for VAT or are exempt should report their purchases of digital services from non-resident suppliers electronically to the AFIP.
- These fees contribute to the funding of essential municipal services such as lighting, garbage collection, and maintenance of public spaces.
- In the meantime, it is also important to remember that Member States may not necessarily wait until the prescribed date in ViDA to introduce these changes.
Taxpayers who fail to specify taxes on their invoices will face penalties starting from the respective compliance deadlines. However, provinces and the City of Buenos Aires are encouraged to implement similar regulations for local taxes, such as the Gross Income Tax (IIBB). The mandate becomes mandatory for small businesses and self-employed individuals on April 1, 2025. According to the legislation in force in Argentina, VAT returns must be submitted every month.
The collection regime will only apply when each transaction amount exceeds ARS 3000. Taxpayers who issue invoices concerning these provisions must ensure compliance with the document data requirements, used as evidence of the collection for the final VAT calculation. The goal of these taxes is to regulate and control foreign trade, while also generating revenue for the government. They are typically levied as a percentage of the value of the imported or exported goods. The tax reform in Argentina includes measures such as digitalization of tax procedures, introduction of online tax filing systems, and strengthening of tax audit capabilities. These reforms aim to reduce tax evasion, increase tax revenues, and improve the overall effectiveness of the tax system.
Simplified Tax System
While tax treaties promote economic cooperation and prevent double taxation, foreign trade taxes contribute to the regulation and control of trade flows. In addition to tax treaties, Argentina also has a robust system of foreign trade taxes. These taxes, often referred to as customs duties or import and export taxes, are imposed on goods and services crossing the country’s borders. These tax treaties provide guidelines for the allocation of taxing rights and mechanisms for the exchange of information between Argentina and its treaty partners.
Tax Incentives and Tax Reform in Argentina
ARCA has announced a Consumer Tax Transparency Regime, requiring large companies to itemize VAT and other indirect taxes on invoices starting January 1, 2025. This initiative aims to provide consumers with a clear breakdown of tax components in their purchases, enhancing transparency and informed decision-making. Provincial and municipal authorities are encouraged to adopt similar measures for local taxes.
Foreign and local nationals working for a local company must be included on the local payroll and will be considered as local employees for local labour, tax, and social security purposes. Both the local company and the employees will be subject to the corresponding regulations. 33% of the tax on financial transactions effectively paid on bank account transactions (0.6%) and movement of funds (1.2%) is creditable against CIT and minimum notional income tax and/or respective tax advances. Real estate tax is usually assessed by the local tax authority, considering the property’s fiscal value and the tax rates established by the current year tax law. The VAT rate is 21%, although certain specific items are subject to a 27% or 10.5% rate. Fonoa is well-positioned to assist businesses in updating their invoicing systems to comply with these new requirements, enhancing their service offerings and ensuring compliance with the new regulations.
The implementation of these changes will have an impact on all taxpayers doing business in the EU irrespectively of size and industry. Stay up to date with the latest tax and compliance updates that may impact your business. Those taxable persons using “Fiscal Controllers” documents of “New Technology” to comply with the provisions of the preceding paragraph must use the section “Other Taxes” on the document. Employee contributions are also an integral part of the social security system in Argentina. These contributions are deducted from the employees’ monthly salary, subject to a certain cap. By contributing to the system, employees gain access to benefits such as healthcare coverage, retirement pensions, disability benefits, and more.
Additionally, we will explore the municipal fees that municipalities impose for services like lighting and garbage collection. Argentina applies VAT to digital services based on the consumer’s locationArgentina implemented special VAT rules for digital services supplied by non-residents. The supplier doesn’t collect VAT; instead, credit card companies or financial institutions remit it to the tax authority as a withholding agent. Argentina introduced special VAT rules for digital services provided by non-residents in 2017. Under the digital service rules in Argentina, VAT is not collected and remitted by the supplier; instead, VAT is handled by an intermediary agent assigned by the Tax Authorities.
A taxable person that has paid too much VAT in a period in error may request a refund of the overpaid amount. Interest is paid by the VAT authorities on overpaid tax at the rate of 0.5% per month. There are penalties for late registration, which include being unable to operate any kind of commercial activity in the country.
Invoices must be generated through the Federal Administration of Public Revenue (AFIP) system, and all invoices must contain unique identification codes provided by AFIP. As of September 1, 2024, the VAT withholding regime is not applicable to payments made through electronic systems. The resolution also establishes that the only valid document to prove the payment of the perceptions will be the invoice or equivalent document (issued under the current invoicing regulations). The document will record the amount received in a discriminated manner and with express mention of this regime.
Income tax in Argentina is progressive for individuals, meaning the tax rate increases as income levels rise. This system ensures that higher-income individuals contribute a larger proportion of their earnings in taxes. There is no specific method stated in the legislation for allocating the tax credit related to exports, but taxpayers are able to use any methods of calculation that would be suitable to their business model. VAT paid on purchases, final imports, and rental of automobiles not considered as inventory cannot be computed by the purchaser as a VAT credit.
In preparation for the new rules, businesses will have to make significant changes to their systems and processes, and in order to be ready to implement these in a timely manner, it is important to consider and prepare for these on time. The taxpayers must report such transactions up to the due date for filing the Income Tax return for the fiscal year to which they correspond. There will be no possibility to continue issuing summary invoices for a calendar month as it goes against the aim of the almost real-time reporting system. Understanding the municipal fees in Argentina is crucial for property owners and residents to effectively manage their finances and contribute to the sustainable development of their local communities. There is no restriction regarding the employment of foreigners, provided they hold working visas. Invoices and receipts must include a section detailing the amount corresponding to VAT and other indirect national taxes.
VAT registration is voluntary for foreign businesses established in Argentina and offering digital products and services. One of our Argentinian lawyers can tell you more about the VAT in Argentina and the rates imposed in 2025 for varied goods and services available for sale purposes. We have experts who can provide essential legal advice for international entrepreneurs who want to start a business in Argentina.
Regarding the internal documents of a company with economic activities in Argentina, these should also contain notifications regarding the VAT corrections, where applicable. This guide provides an in-depth overview of VAT (Value Added Tax) in Argentina, including applicable rates, registration requirements, invoicing rules, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Argentina or with Argentine customers. The liability for return filing and payment of taxes does not fall on the foreign service provider, but rather on the credit card or financial institution that withholds VAT, or the Argentine recipient that collects and remits the VAT. The non-resident digital service provider should not be required to file a VAT return in Argentina. Argentina’s tax treaties cover a wide range of areas, including income tax, capital gains tax, withholding tax, and more, allowing for the effective management of tax liabilities in international transactions.
Exporters must file an export return with the tax authorities, reporting the VAT receivables related to their exports to be reimbursed on VAT paid in relation to the export operations. A report certified by a public accountant with respect to the value, registrations, and other characteristics related to the refund must be attached to the export return. Such purchases are considered as inventory and cannot be calculated by the buyer as a VAT credit.
These incentives not only provide financial relief but also contribute to the development of strategic industries and the overall progress of the country. In this guide, we will delve into various aspects of the Argentina tax system, including federal, provincial, and municipal taxes. We will explore the different taxes imposed by the Federal Administration of Public Revenue (AFIP), such as income tax and value-added tax (VAT). Furthermore, we will examine the tax systems imposed by each province, including taxes on gross income, real estate, and business turnover.
The tax rates and regulations may differ between provinces, as they have the authority to establish their own tax policies. Each of the 24 jurisdictions into which Argentina is divided imposes a tax on gross revenues from the sale of goods and services. Exports of goods are exempt, and certain industries are subject to a reduced tax rate. All companies registered for VAT purposes in Argentina are obliged to use electronic invoices.