The laws and rights that govern employment in Argentina are primarily the Argentine Constitution, international treaties, the Employment Contract Law, several federal statutes and collective bargaining agreements. The federal government may enact employment and labor legislation to all provinces in Argentina as specified in the Argentine Constitution. These employment laws are enforced by the National Ministry of Labor.
Argentina does not impose a complicated or onerous tax system on foreign companies operating in the country. The primary concerns for a foreign company that needs to comply with tax laws in Argentina are: Individual income tax for employees in Argentina, social security costs, VAT, withholding tax, business tax and permanent establishment concerns.
Argentina has a relatively open view to encouraging foreign workers to embrace the country, ensuring that all foreigners benefit from all civil rights of citizens and will not be subject to any additional charges or requirements because of their status, as declared in Article 20 of the National Constitution. There are also less stringent rules, such as no minimum language requirements, no industry quota limits and no medical screening required.
Argentina is an attractive location for foreign investment due to the large population of qualified human workers and commercial partnerships with neighboring countries like Brazil. Argentine workers have the highest income per capita in Latin America, while the population enjoys the lowest illiteracy rates in the region. The economy of Argentina heavily relies on a well-developed infrastructure network, providing access to the MERCOSUR markets as well.
Companies entering Argentina must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Argentinian Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Argentinian entity established that can run payroll.
A DIY approach will typically be delayed until there is a properly incorporated company ready to run payroll and may be a costly option. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
|Management Fee for Employer of Record Services / Monthly Payroll Costs||
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Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.
|Tax Returns Supplied||
|Employers Social Security and statutory contributions||
Employer social security contributions are current 27%, spread across contributions to the Pension Fund, Pensioner’s Healthcare Fund, Family Allowance Fund, Unemployment Fund and Medical Care.
|Employees Social Security and statutory contributions||
Employee social security contributions are currently 17% of gross wages, up to a monthly cap of ARS 13,879.25. 11% is towards the pension fund, 3% towards the Pensioner’s Healthcare Fund and 3% to Medical Care.
|Corporate Income Tax Rate||
The corporate income tax rate is 35%.
There is no payroll tax in Argentina.
The general Value Added Tax (VAT) is 21%, which increases to 27% to certain services such as communication and utilities provisions and decreases to 10.5% for capital goods and other specified items. The export of goods and services have no VAT.
There is also a provincial level sales tax in some municipalities levied at 4% of gross revenue. Higher rates may be levied for certain services or industries and in certain provinces.
Dividends paid to nonresidents have a withholding tax of 10%. An additional withholding tax applies if the dividends received exceed the payer company’s accumulated taxable income, standing at 35%.
Interest paid to nonresidents have a withholding tax of 35%, but may be reduced to 15.05% if the borrower is a financial institution, bank or in special circumstances.
Royalty payments made to nonresidents are subject to a withholding tax of 35% on 35% of the gross payment, at an effective rate of 12.25%. Patent royalties and technical assistance fees have varying withholding taxes depending on payment type, ranging from an effective rate of 21% to 31.5%.
Real estate tax – The provincial governments levy a real estate property tax on both urban and rural land, with differing rates depending on the jurisdiction.
Stamp duty – Documents such as contracts, notarial deeds, receipted invoices, promissory notes and other instruments are subject to stamp tax. The stamp duty is generally 1%, although may range from 2.5% to 4% depending on nature of tax and province.
Customs and excise duties – Export duties depend on the nature of the goods exported, while excise taxes are levied on certain products only, e.g. fuel, luxury items and cigarettes.
Financial transaction tax – All financial transactions are taxed at 0.6% per transaction on all debits and credits in current accounts.
Net wealth tax – An asset tax of 0.5% applies to equity interests held by a resident or nonresident individual in a company incorporated in Argentina.