ARGENTINA Law and Practice Contributed by: Daniel Rinci, Tomas Cabanelas, Fernando García and Marisa Majul, Rinci & Asociados
installations, as well as construction or assembly pro - jects lasting more than six months. The domestic law also provides for a dependent agent PE, where a person acting on behalf of a foreign enter - prise habitually concludes contracts or plays the prin - cipal role in the conclusion of contracts in Argentina without material modification by the enterprise. Deviations From Treaty Definitions Argentina’s domestic PE definition is broadly consist - ent with the OECD Model in structure, though some of Argentina’s older treaties retain features that are more closely aligned with the UN Model, including the force-of-attraction principle – under which, profits attributable to a PE include not only those directly generated by the PE’s activities but also income from goods sold or activities of the same or similar kind to those carried out through the PE. This principle was abandoned by the OECD Model but is retained in some bilateral treaties. Argentina’s treaties generally do not include the anti- fragmentation rules introduced in the OECD’s 2017 Model update (following BEPS Action 7), except where treaties have been modified through the MLI. The domestic rules similarly pre-date these develop - ments, meaning that sophisticated fragmentation of activities may still present opportunities in certain treaty contexts, though the substance requirements under the general anti-avoidance framework limit this in practice. 3. Taxation of Cross-Border Income 3.1 Income From Immovable Property Residents Argentine resident individuals and companies are taxed on income derived from immovable property located in Argentina as part of their worldwide income. Rental income of individuals is subject to the progres - sive rates described above, except when derived from residential property, which was recently exempted by a tax reform passed in March 2026. For companies, rental income is included in ordinary taxable income subject to corporate tax. Capital gains arising from
the sale of Argentine real estate by individuals are now exempt under the same reform. Non-Residents Non-residents receiving rental income from Argen - tine real estate are subject to withholding tax. The presumed net income percentage applied under the domestic rules is 60% of gross rent, to which the 35% rate is applied, resulting in an effective withholding rate of 21%. Capital gains realised by non-residents on the sale of Argentine immovable property are sub - ject to a 15% tax on the net gain. The exemption on capital gains and rental income arising from residential real estate applies to non-residents as well. 3.2 Business Profits Argentine-resident entities are subject to corporate income tax on worldwide business profits at the appli - cable corporate rates (25% or 35% depending on the income bracket). Expenses necessary to obtain, maintain and preserve taxable income are generally deductible, subject to specific limitations (eg, on inter - est deductibility, on payments to related parties in low- tax jurisdictions, and on the deductibility of royalties). Non-resident entities carrying on business through a PE in Argentina are taxed only on profits attributable to the PE. The attribution of profits to PEs follows the functionally separate entity approach, though Argen - tina’s rules in this area are less developed than those of many OECD members and administrative guidance plays an important role. The force-of-attraction princi - ple mentioned in 2.6 Definition of Permanent Estab - lishment applies under certain older treaties. Argentina does not currently have a comprehensive participation exemption for dividends received from foreign subsidiaries by Argentine parent companies, though the foreign tax credit mechanism partially miti - gates double taxation of foreign-source income. 3.3 Passive Income Dividends Dividends paid by Argentine companies to non-resi - dent shareholders are subject to a 7% withholding tax on distributions.
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