Business Operations in Argentina contains information enabling foreign businesses and their professional advisors to determine the best methods of conducting business operations in Argentina from both a tax and a general legal point of view, analyzing in detail the statutory and procedural framework of Argentine taxation as it applies to corporations and individuals.

In addition to providing a detailed explanation of the Argentine system of income taxation, this Portfolio, written by Dr. Adolfo Atchabahian and Dr. Abel Adolfo Atchabahian, discusses the legal forms of business enterprises, licensing and franchising in Argentina, immigration regulations, labor relations, business financing, currency and exchange control, and the different tax treatment derived from the tax treaties entered into by Argentina.

This Portfolio examines eleven important taxes, identifying taxable persons, how the taxes are assessed, and how to file and pay them.  Taxes covered include income tax, the tax on presumptive minimum income, tax on real and personal property, value added tax, excise taxes, stamp tax, and the tax on financial transactions.

In addition, this Portfolio identifies what entities  qualify as domestic or foreign corporations and examines special provisions relating to multinational corporations.

Worksheets include six different tax return forms: two income tax returns, a real and personal property tax return, a value added tax return, an information for tax purposes form, and a tax on presumptive minimum income form.

Business Operations in Argentina allows you to benefit from:

• A perspective that addresses the concerns of foreign investors/enterprises and their advisors looking to invest/do business or already invested/doing business in the country
• Identification of those features of the country’s system that are likely to prove most problematic to outside investors
• Emphasis on those aspects of the tax system that impact transactions and structures with a cross-border dimension
• Information and insight to enable users to anticipate the pitfalls and opportunities likely to arise in making an initial investment, carrying on operations and devising potential exit strategies
• Invaluable practice documents including tables, charts and lists
• Time-saving citations to relevant sections of tax laws, regulations, court cases, and more

This Portfolio is part of the Foreign Income Portfolios Library, a comprehensive series containing more than 100 Portfolios, which covers critical transactions and issues in international taxation. This highly-regarded resource library offers commentary on a wide range of foreign income topics including: Foreign Tax Credit, Business Operations in Italy, Business Operations in Puerto Rico, Branch ProfitsTax, Source of Income Rules, Subpart F (Controlled Foreign Corporations), Foreign Partnerships and Partners, Transfer Pricing, and more.

Detailed Analysis

I. Argentina

A. The Country

B. The Government: Federal Structure

C. Constitutional Rights

D. The People

E. The Economy

II. Operating a Business in Argentina

A. Foreign Investment Regulation

1. Opportunities

2. Legislation on Foreign Investment

a. Definitions

(1) Foreign Capital Investment

(2) Foreign Investor

(3) Foreign-Controlled Local Company

(4) Local Company with Domestic Capital

b. Types of Foreign Investments

c. Registration of Foreign Capital

d. Remittance of Profits and Repatriation of Capital Investments

3. Investment Incentives and Subsidies

a. Manufacturing Activities

(1) Tax Benefits

(2) Beneficiaries

(3) Procedure

(4) Unified Incentives

b. Mining Activities

c. Exports

d. Promotion of Specific Sectors

e. Regional Promotion

f. Research and Development: Transfer of Technology and Technical Assistance

g. Software Industry

h. Investments in New Capital Goods, Except Cars, Devoted to Industrial Activities and to Infrastructure Works

4. Restrictions

B. Currency and Exchange Controls

1. Currency

2. Exchange Controls

C. Trade and Commerce Regulation

1. Imports

2. Exports

3. Free Trade Zones

4. General Regulation of Business

a. Monopolies

b. Mergers and Concentrations

c. Licensing and Transfers of Technology

d. Consumer Protection

e. Commercial Integrity

f. Price Controls

(1) Introduction

(2) Law 20,680

(a) History

(b) Scope

(c) Implementing Authorities

(d) Penalties

g. Securities Regulation

5. Licensing and Franchising

a. Patents and Utility Models

(1) Types of Patents - Requirements for Filing Applications

(a) Independent Patents

(b) Certificates of Addition

(c) Confirmation Patents

(2) Lapse

(3) Proceedings

(4) Legal Remedies against Misappropriation of an Invention and Counterfeiting

(a) Misappropriation

(b) Counterfeiting and Infringement

(c) Fraudulent Claim of Independent Patent

b. Trademarks and Trade Names

(1) Registrable Signs

(2) Registration, Use, Transfer and Cessation of Trademarks and Trade Names

(3) Requirements for Filing Applications to Protect Trademarks

(4) Administrative Proceedings

(5) Judicial Proceedings

c. Industrial Models and Designs

(1) Registrable Industrial Models and Designs

(2) Independent Registrations

(3) Confirmation Registrations

(4) Judicial Proceedings

(a) Action for Recovery or Cancellation Proceedings Owing to Lack of Novelty

(b) Action for Infringement or Counterfeiting

d. Industrial Know-how

e. Copyrights

(1) Protected Works

(2) Term of Protection

(3) Judicial Action

f. Licensing and Franchising

D. Immigration Regulation

E. Labor Relations

1. Working Conditions

a. Daily or Weekly Working Time

b. Weekly Rest

c. Annual Vacation

d. Special Leave

e. Employment of Women

2. Remuneration

3. Suspension of the Employment Relationship

a. Disciplinary Suspension

b. Preventive Suspension

c. Performance of Representative or Elective Duties

d. Performance of Duties in Professional Associations

e. Military Service

4. Termination of the Employment Relationship

a. Termination and Prior Notice

b. Termination by the Employer

(1) Discharge with Cause

(2) Discharge Without Cause

c. Termination by the Employee

(1) Resignation

(2) Abandonment

(3) Indirect Dismissal

d. Agreement of the Parties

e. Death of an Employee

f. Retirement

g. Layoffs

(1) Temporary Layoffs

(2) Permanent Layoffs

F. Financing the Business

III. Forms of Doing Business in Argentina

A. Principal Business Entities

1. Sole Proprietorship

2. Joint Stock Corporation

3. Partnership

4. Branch of a Foreign Company

5. Other Entities

B. Joint Stock Corporation

1. Formation

a. Purpose Clause

b. Corporate Name

c. Incorporators

d. Articles of Incorporation

e. Capital Stock

f. Incorporation Procedure

g. Costs of Incorporation

2. Operation

a. License

b. Amendment of Articles

c. Increases and Reductions of Capital Stock

d. Acquisition of Own Stock

e. Corporate Officers

(1) Directors

(2) Statutory Controllers

(3) Syndics

f. Shareholders' Meetings

g. Directors' Meetings

h. Books and Records

i. Financial Statements

j. Dividends and Other Distributions of Profits

k. Reserves

3. Statutory Merger or Demerger

4. Dissolution

5. Liquidation

6. Reorganization (Settlement Proceedings and Bankruptcy)

C. Partnerships

1. Trading Partnership (Sociedad Colectiva)

2. Limited Silent Partnership (Sociedad en Comandita Simple)

3. Corporate Silent Partnership (Sociedad en Comandita por Acciones)

4. Combined Capital and Industrial Partnership (Sociedad de Capital e Industria)

5. Accidental Partnership or Temporary Association (Sociedad Accidental o en Participacion)

D. Branch of a Foreign Corporation

E. Other Business Entities

1. Limited Liability Company

2. Collaboration Groups

3. Temporary Associations Among Enterprises

4. Public-Private (Mixed) Company

5. Corporation with the Majority of Shares Owned by the Government

IV. Principal Taxes

A. Constitutional and Legal Framework

1. Distribution of Taxing Powers

2. Sources of Tax Legislation

B. Income Tax

1. Introduction

2. Jurisdictional Principle

3. Definition of Income

4. Gross Income, Net Income and Net Income Subject to Tax

5. Categories of Income

a. Income from Real Property (First Category)

b. Income Derived from Stock, Government Securities, Bonds, Treasury Bills, Debentures, and Loans (Second Category)

c. Business Income (Third Category)

d. Income from Personal Services (Fourth Category)

C. Tax on Presumptive Minimum Income

D. Tax on Real and Personal Property

1. In General

2. Taxpayers

3. Assessment, Filing and Payment of the Tax

E. Value-added Tax

1. In General

2. Taxpayers

3. Assessment, Filing and Payment of Value-Added Tax

F. Excise Taxes

1. Law 24,674

2. Tax on Insurance Policies and on Certain Products

3. Tax on Liquid Fuel and Natural Gas

G. Stamp Tax

1. Taxable Subject

2. Tax Rates

3. Exemptions

H. Simplified Tax Regime for Small Businesses

I. Tax on Financial Transactions

J. Estate and Gift Tax

K. Social Security Contributions

L. State Taxes

M. Local Taxes

V. Taxation of Domestic Corporations

A. What Is a Domestic Corporation?

B. Corporate Income Tax

1. Income Subject to Tax

2. Accounting

a. General

b. Accounting Periods

(1) Taxable Year

(2) Fiscal Period

(a) Calendar Year

(b) Normal Accounting Period

(3) Change of Accounting Period - Irregular Periods

c. Accounting Methods

(1) Installment Method - Sales of Real Property

(2) Building Activities

d. Fiscal Balance Sheet

(1) Operating Profits vs. Taxable Income

(2) Differences in Determining Book and Tax Profits

(3) Determination of the Fiscal Balance Sheet of a Company

e. Inventory

f. Consolidated Returns

g. Reserves

3. Calculation of Gross Income

a. General

(1) Business Income

(2) Computing the Gross Income of a Business Enterprise

b. Capital Gains

c. Dividend Income

(1) Dividends Paid to Resident Shareholders

(2) Dividends Paid to Nonresident Shareholders

d. Income from Foreign Sources

e. Stock Options

f. Other Inclusions in Gross Income

(1) Interest

(a) Exempt Interest

(b) Withholding on Interest

(2) Royalties

(a) Resident Beneficiaries

(b) Nonresident Beneficiaries

(3) Export and Import Business

(4) Foreign Exchange Gains and Losses

(5) Sale of Depreciable Property

(6) Sale and Replacement of Depreciable Assets

(7) Intangible Property

(8) Leasing Transactions

g. Exclusions from Gross Income

4. Business Expenses

a. General

b. Organizational Expenses

c. Travel and Entertainment Expenses

d. Interest and Royalties

e. Taxes

f. Depreciation and Amortization

(1) Depreciable Property

(2) Basis of Depreciation

(3) Estimated Useful Life

(4) Methods for Computing the Actual Amount of Depreciation Allowance

(5) Depletion Allowance

g. Obsolete Equipment

h. Charitable Contributions

i. Capital Losses

j. Casualty Losses

k. Reserve Accounts

l. Bad Debts

m. Inventory Write-Downs

n. Rent

o. Salaries and Wages

p. Fees in General

q. Fees of Members of Board of Directors and Managing Partners

r. Research and Development

s. Other Deductions from Gross Income

t. Prohibited Deductions

5. Presumptive Net Income

a. Transportation between Argentina and Abroad

b. International News Agencies

c. Insurance Companies

d. Producers, Distributors, and Intermediaries Dealing with Certain Goods and Services

6. Capital Expenditures

7. Loss Carryovers and Carrybacks

8. Corporate Reorganization

9. Tax Credits

a. Foreign Tax Credit

b. Investment Tax Credit

c. Other Credits

10. Tax Rates and Calculation of Taxable Income

11. Assessment, Filing and Payment of Tax

a. Due Date for Payment

b. Installment Plans

c. Payments on Account

12. Audit of Tax Returns: Procedure and Penalties

C. Other Taxes

1. Tax on the Transfer of Real Property by Individuals and Undivided Estates

2. Taxes on Real Property

3. Tax on Gross Receipts

VI. Taxation of Foreign Corporations: Subsidiaries and Branches

A. What Is a Foreign Corporation?

B. Determination of Taxable Income

VII. Taxation of a Branch

A. Determination of Taxable Income

B. Subsidiary vs. Branch

VIII. Taxation of Partnerships

IX. Taxation of a Sole Proprietorship

X. Taxation of Other Business Entities

A. Mixed Companies

B. Government-Owned Corporations

XI. Taxation of Resident Individuals

A. Scope of Taxation

B. Residence

C. Determination of Gross Income

D. Exemptions

E. Allowances and Deductions

1. In General

2. Special Deduction for Individuals Earning Fourth Category Income

3. Personal and Family Allowances

F. Tax Rates and Calculation of Taxable Income

G. Assessment, Filing and Payment of the Tax

XII. Taxation of Nonresidents

A. General

B. Method of Taxation: Tax Rate

C. Taxable Base: Presumptive Net Income

XIII. Inter-Company Pricing

XIV. Special Provisions Relating to Multinational Corporations

A. In General

B. Foreign Family Foundations

C. Tax Haven Operations

XV. Avoidance of Double Taxation

A. Foreign Tax Credits

B. Tax Treaties

1. Taxation of Business Income

a. Argentina-Bolivia and Argentina-Chile Tax Treaties

b. Argentina-Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, Switzerland and United Kingdom Tax Treaties

(1) Permanent Establishment

(2) Industrial or Commercial Profits

2. Taxation of Investment Income

a. Argentina-Bolivia and Argentina-Chile Tax Treaties

b. Argentina-Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, Switzerland and United Kingdom Tax Treaties

3. Methods of Avoiding Double Taxation

a. Argentina-Australia Tax Treaty

b. Argentina-Austria Tax Treaty

c. Argentina-Belgium Tax Treaty

d. Argentina-Brazil Tax Treaty

e. Argentina-Canada Tax Treaty

f. Argentina-Denmark Tax Treaty

g. Argentina-Finland Tax Treaty

h. Argentina-France Tax Treaty

i. Argentina-Germany Tax Treaty

j. Argentina-Italy Tax Treaty

k. Argentina-Netherlands Tax Treaty

l. Argentina-Norway Tax Treaty

m. Argentina-Spain Tax Treaty

n. Argentina-Sweden Tax Treaty

o. Argentina-Switzerland Tax Treaty

p. Argentina-United Kingdom Tax Treaty

4. Federal Administration of Public Revenue's Involvement in Exchange of Information Proceedings

Working Papers

Table of Worksheets

Worksheet 1 Form 713 - Income Tax Return (to be filed by taxpayers that have bookkeeping systems and prepare annual balance sheets)

Worksheet 2 Form 760/C - Information for Tax Purposes

Worksheet 3 Form 711 - Income Tax Return (to be filed by individuals, undivided estates, sole proprietorships and taxpayers that do not have bookkeeping systems enabling them to prepare annual balance sheets)

Worksheet 4 Form 762/A - Real and Personal Property Tax Return

Worksheet 5 Form 731 - Value Added Tax Return (to be filed on a monthly basis)

Worksheet 6 Form 715 - Tax on Presumptive Minimum Income

Worksheet 7 List of Comprehensive Double Taxation Agreements and Related Protocols Signed by Argentina as of February 1, 2008

Bibliography

OFFICIAL

Official Publications:

Cases:

UNOFFICIAL

Books:

Articles: