PORTFOLIO

Business Operations in Argentina (Portfolio 7000)

Be a trusted advisor to your clients with Bloomberg BNA Tax Portfolios. In this Portfolio, our expert authors provide information that will enable foreign businesses and their professional advisors to determine the best methods of conducting business operations in Argentina from both the tax and general legal points of view. 

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DESCRIPTION

The Business Operations in Argentina Portfolio analyzes 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, the Portfolio discusses the legal forms of business enterprises, licensing and franchising in Argentina, immigration regulations, labor relations, business financing, currency and exchange control, value added tax, the tax on presumptive minimum income, and the tax on real and personal property, as well as the impact on the Argentine tax treatment of the tax treaties entered into by Argentina.


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AUTHORS

Bloomberg BNA Portfolios are written by leading tax professionals who set the standard as leaders in their fields. The Business Operations in Argentina Portfolio was authored by the following attorneys.  

 

DR. ADOLFO ATCHABAHIAN
Adolfo Atchabahian, Special Consultant to Tax Management, Doctor in Economic Science, University of Buenos Aires; former Judge of the National Tax Court in Argentina (1960–07) and Professor of Public Finance and Tax Law at the University of Buenos Aires (1957–67 and 1980–03); tax expert and Director at the Office of Public Finance of the Organization of American States (1967–76); former consultant at the U.N. Center on Transnational Corporations; consultant of the Inter-American Development Bank and the International Monetary Fund; member of the International Fiscal Association and former member of its Permanent Scientific Committee; member and former president of the Argentinean Association of Fiscal Studies; author of several books and many articles published in Argentina and abroad relating to economic, public accounting and tax matters; former chief editor of Derecho Fiscal and Derecho Tributario (1981–98), monthly tax reviews, and Impuestos Nacionales, a loose-leaf publication updated fortnightly (1984–98); Director of Periódico Económico Tributario, a fortnightly publication, published in Buenos Aires under the auspices of Editorial La Ley-Thomson-Reuter (2003– ); and Professor of Tax Law in graduate courses for lawyers and certified public accountants in different public and private universities throughout Argentina.

DR. ABEL ADOLFO ATCHABAHIAN
Abel Adolfo Atchabahian, lawyer, Pontifical Catholic University of Argentina Santa María de los Buenos Aires; lecturer at the Chamber of Commerce of Argentina; tax litigation practitioner before the National Supreme Court of Justice, as well as at various Courts of Appeal throughout Argentina, the National Tax Court, and the administrative tax agencies of the federal government, the provinces and the Autonomous City of Buenos Aires; author of several articles dealing with tax matters published in Argentine publications; member of the Colegio de Abogados de la Ciudad de Buenos Aires (1999); admitted to the Bar Association of Buenos Aires since 1999 and Judiciary Department of San Isidro, province of Buenos Aires, since 2002; member of the Asociacin Argentina de Estudios Fiscales since 2003.

TABLE OF CONTENTS

Portfolio 7000-1st: Business Operations in Argentina

Portfolio Description

Authors

Technical Advisors

Description

TABLE OF ABBREVIATIONS

KEY FACTS

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. Forestry

e. Regional Promotion

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

g. Software Industry

h. Modern Biotechnology

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. Transfer 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

h. Insurance Regulation

5. Patents and Utility Models

a. Types of Patent and Requirements for Filing Applications

(1) Independent Patents

(2) Certificates of Addition

(3) Confirmation Patents

b. Lapse

c. Proceedings

d. Legal Remedies against Misappropriation of an Invention and Counterfeiting

(1) Misappropriation

(2) Counterfeiting and Infringement

(3) Fraudulent Claim to Independent Patent

6. Trademarks and Trade Names

a. Registrable Signs

b. Registration, Use, Transfer and Cessation of Trademarks and Trade Names

c. Requirements for Filing Applications to Protect Trademarks

d. Administrative Proceedings

e. Judicial Proceedings

7. Industrial Models and Designs

a. Registrable Industrial Models and Designs

b. Independent Registrations

c. Confirmation Registrations

d. Judicial Proceedings

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

(2) Action for Infringement or Counterfeiting

8. Industrial Know-How

9. Copyrights

a. Protected Works

b. Term of Protection

c. Judicial Action

10. 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 Business 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 Participación)

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

3. Legislative Process

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 Tax on Real and Personal Property

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 Boards 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 Expenditure

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. Auditing 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 and Certain Types of Third 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 Tax Treaty

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

(1) Permanent Establishment

(2) Industrial or Commercial Profits

2. Taxation of Investment Income

a. Argentina-Bolivia Tax Treaty

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

3. Methods of Avoiding Double Taxation Under Argentina's Tax Treaties

a. Argentina-Australia Tax Treaty

b. Argentina-Belgium Tax Treaty

c. Argentina-Brazil Tax Treaty

d. Argentina-Canada Tax Treaty

e. Argentina-Denmark Tax Treaty

f. Argentina-Finland Tax Treaty

g. Argentina-France Tax Treaty

h. Argentina-Germany Tax Treaty

i. Argentina-Italy Tax Treaty

j. Argentina-Netherlands Tax Treaty

k. Argentina-Norway Tax Treaty

l. Argentina-Russia Tax Treaty

m. Argentina-Sweden Tax Treaty

n. Argentina-United Kingdom Tax Treaty

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


WORKING PAPERS

Working Papers

Table of Worksheets

Worksheet 1 List of Comprehensive Double Taxation Agreements and Related Protocols Signed by Argentina as of June 1, 2013

Worksheet 2 Table of Withholding Tax Rates

Worksheet 3 Form 713 — Income Tax Return

Worksheet 4 Form 760/C — Information for Tax Purposes

Worksheet 5 Form 711, New Model — Income Tax Return

Worksheet 6 Form 762/A — Real and Personal Property Tax Return

Worksheet 7 Form 731 — Value Added Tax Return

Worksheet 8 Form 715 — Tax on Presumptive Minimum Income

Worksheet 9 Form 899 — Tax on Real and Personal Property, Companies and Shares on Their Capital

Worksheet 10 Form 742 — Transfer Pricing

Bibliography

OFFICIAL

Official Publications

Cases

UNOFFICIAL

Books

Articles