ARGENTINA Law and Practice Contributed by: Daniel Rinci, Tomas Cabanelas, Fernando García and Marisa Majul, Rinci & Asociados
Interest Domestic withholding tax on interest paid to non-res - idents varies significantly depending on the nature of the recipient and the loan. Interest paid to qualifying foreign financial entities is taxed at an effective rate of 15.05%, while interest paid to other non-resident lenders is taxed at a rate of 35%. Royalties Royalties paid to non-residents are subject to with - holding tax at effective rates that range from approx - imately 12.25% to 28%, depending on the type of intellectual property and the contractual arrangement. Domestic rules treat a broad range of technical assis - tance, technology transfer, and know-how payments as royalties. Treaty provisions may reduce these rates, and Argentina’s treaties generally define royalties broadly, consistent with the UN Model. 3.4 Capital Gains Resident individuals are subject to a flat 15% rate on gains from the disposal of shares, bonds and other securities denominated in foreign currency or in local currency with an adjustment clause, and a 5% rate on gains from instruments denominated in Argen - tine pesos without an adjustment clause. Corporate taxpayers include capital gains in ordinary taxable income, subject to the applicable corporate rates. Capital gains on the sale of listed shares is exempt. Non-residents realising capital gains on Argentine- source assets are subject to withholding tax under the same presumptive income framework applicable to other passive income. Gains on Argentine real estate, shares of Argentine companies, and certain financial instruments are all within scope. Many of Argentina’s treaties contain provisions that preserve source-state taxation rights over capital gains on shares, the value of which derives principally from immovable property, consistent with OECD and UN Model approaches. 3.5 Employment Income General Rules Employment income received by Argentine tax residents is taxable at different rates according to bracket. Employers are required to withhold income tax from salary payments on a monthly basis. Resi - dent employees are taxed on worldwide employment
income, with a foreign tax credit available for taxes withheld abroad. Short-Term Assignments and Cross-Border Employment For individuals who are not Argentine tax residents but perform employment activities in Argentina, Argentine-source employment income is subject to withholding tax. The domestic rules follow a source approach based on the place where the work is physi - cally performed, meaning that compensation for ser - vices physically rendered in Argentina is treated as Argentine-source, regardless of where the contract is concluded or payment is made. Argentina’s tax treaties generally follow the OECD Model Article 15 approach, under which remunera - tion may be taxed in the state where employment is exercised. Remote Working Argentina has not enacted specific legislation address - ing the international tax treatment of remote work arrangements. In practice, the existing source rules apply: services performed remotely from Argentina by an Argentine resident for a foreign employer are treated as foreign-source employment income (since the work is performed in Argentina but for a foreign entity – the characterisation depends on the relevant treaty). Conversely, services performed remotely from abroad by a non-resident for an Argentine employer are generally not considered Argentine-source under the domestic rules. This area lacks specific regulatory guidance and continues to evolve in practice. 3.6 Other Income A noteworthy feature of Argentine international tax law is the treatment of fees for technical services paid to non-residents. Unlike many OECD Model-based sys - tems in which technical service fees are treated as business profits (Article 7) rather than royalties (Article 12), Argentina’s domestic law characterises technical services payments as subject to withholding tax as though they were royalties. This broad treatment of technical services has been a source of treaty conflict in a number of cases.
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