Argentina: Digital services VAT regulation published

Together, these measures create a favorable environment for international business ventures, enabling companies to navigate the complexities of global trade while ensuring compliance with Argentina’s tax regulations. By implementing tax incentives and undertaking tax reforms, Argentina is striving to create a business-friendly environment, attract investments, and foster sustainable economic growth. These initiatives demonstrate the government’s commitment to promoting entrepreneurship, innovation, and development in the country. It is important to note that the simplified tax system is primarily designed to benefit small businesses and individuals with lower revenues or limited operations. This simplified tax structure aims to reduce administrative burdens and encourage compliance among smaller taxpayers. In addition to federal and provincial taxes, municipalities in Argentina impose fees for various services provided to residents.

VAT on Digital & Electronic Services in Argentina

Taxpayers who fail to specify taxes on their invoices will face penalties starting from the respective compliance deadlines. However, provinces and the City of Buenos Aires are encouraged to implement similar regulations for local taxes, such as the Gross Income Tax (IIBB). The mandate becomes mandatory for small businesses and self-employed individuals on April 1, 2025. According to the legislation in force in Argentina, VAT returns must be submitted every month.

Digital Reporting Requirement on cross-border B2B transactions

The collection regime will only apply when each transaction amount exceeds ARS 3000. Taxpayers who issue invoices concerning these provisions must ensure compliance with the document data requirements, used as evidence of the collection for the final VAT calculation. The goal of these taxes is to regulate and control foreign trade, while also generating revenue for the government. They are typically levied as a percentage of the value of the imported or exported goods. The tax reform in Argentina includes measures such as digitalization of tax procedures, introduction of online tax filing systems, and strengthening of tax audit capabilities. These reforms aim to reduce tax evasion, increase tax revenues, and improve the overall effectiveness of the tax system.

VAT reporting obligations – why the changes are required?

Our lawyers in Argentina can help you with all the formalities before starting business activities in this country. If a taxpayer is not domiciled or incorporated in Argentina, they should register as long as they have a physical presence (i.e., permanent establishment) in the country. You must register if you habitually or incidentally sell movable property, provide services, or import goods. Now that the content of ViDA package is politically agreed and formal adoption is likely to follow, we recommend that you begin assessing the impact for your organization.

Argentina VAT Guide for International Businesses

Finally, it is important to highlight that the tax authorities have to approve the tax credit to be refunded. Services rendered within the country shall be deemed to be exports if they are effectively applied or economically utilised outside the country. There is no facility for a non-resident company to obtain a VAT refund on expenses in Argentina, even in the case where the non-resident company has made no taxable supplies in Argentina. Companies may request refunds of overpaid VAT (VAT credits) or carry it forward to future return periods. Consumers will receive detailed information on the tax breakdown for each transaction, ensuring greater transparency in final prices.

• The local employer must withhold income tax on an actual and monthly basis and make the corresponding payments to the tax authorities through monthly WHT returns.
• Member states furthermore have the option to extend such DRR to local supplier, however according to the EU DRR standardized requirements.
• However, the global trend shows a move from traditional VAT compliance towards real-time sharing of transaction-based data with tax administrations, often based on e-invoicing.
• RG 4597 AFIP establishes a system for electronic registration of sales, purchase, assignments, exports and definitive imports of goods and services, locations and benefits, called “Digital VAT Book”.
• AFIP also handles customs-related matters, including the collection of import and export duties.
• By providing these incentives, the government aims to stimulate economic growth, attract investments, and create job opportunities in key sectors of the economy.

Argentina’s Digital Tax Policy

The same tax treatment applies to other services, such as those provided by restaurants, hotels, and garages. The increased rate of 27% applies to ‘utilities services’ (e.g. telecommunications, household gas, running water, sewerage, and energy) not rendered to dwelling-purposes real estate. Monthly VAT returns must be submitted by all companies with an Argentinian VAT number, detailing all taxable supplies (sales) and inputs (costs). Fonoa is incorporating a specific field for indirect national taxes and adjusting the placement of tax information on invoices and receipts to ensure compliance with the mandate. This measure aims to enhance tax transparency, ensuring consumers understand the impact of taxes on their transactions.

VAT Number Format

These agreements provide clear rules for determining the allocation of taxing rights and specify the conditions for claiming benefits such as reduced tax rates or exemptions. They also establish procedures for resolving disputes between the tax authorities of the participating countries. Argentina has entered into agreements on the avoidance of double taxation with several countries in order to facilitate cross-border trade and investment. These agreements, commonly known as tax treaties or double taxation agreements, aim to prevent individuals and businesses from being taxed twice on the same income or profits. Each province in Argentina has its own tax system, independent of the federal tax regulations. These provinces levy various taxes on income, property, and business turnover, contributing to the overall tax structure of the country.

Corporate – Other taxes

Furthermore, taxable persons will not depend on the authorization of the recipient anymore. The use of paper invoices will be limited to exception cases authorized by the relevant Member State. This information will feed into the risk analysis systems of the Member States to help them counter the VAT fraud linked with the intra-Community trade, in particular Missing Trader Intra-Community fraud. The collection regime will be applicable for taxable events perfected as of 1 April 2023. As a result, sellers of food and other products for human consumption, beverages, personal hygiene and cleaning items will charge the buyer an additional 3% or 1.5% as appropriate on the sale price according to the applicable fee.

Municipal Fees in Argentina

It is important for individuals and businesses to comply with their tax obligations and keep abreast of any changes or updates to the tax laws. To ensure fairness and sustainability, the social security tax rates in Argentina are determined based on factors such as the type of activity and the annual sales of the company. These rates are periodically reviewed and adjusted as per the prevailing economic conditions and social security requirements of the country. Argentina has implemented tax incentives to promote specific activities and investments. These incentives may include tax credits, exemptions, or reduced tax rates for eligible taxpayers.

Connect with Avalara for the content you need to do tax compliance right

The implementation of these changes will have an impact on all taxpayers doing business in the EU irrespectively of size and industry. Stay up to date with the latest tax and compliance updates that may impact your business. Those taxable persons using “Fiscal Controllers” documents of “New Technology” to comply with the provisions of the preceding paragraph must use the section “Other Taxes” on the document. Employee contributions are also an integral part of the social security system in Argentina. These contributions are deducted from the employees’ monthly salary, subject to a certain cap. By contributing to the system, employees gain access to benefits such as healthcare coverage, retirement pensions, disability benefits, and more.

Excise taxes are typically imposed at the point of manufacture or importation of these products. In the city of Buenos Aires, the standard tax rate is 1% of the aggregate amount of the transactions, contracts, and deeds that are subject to the stamp tax. Nevertheless, input VAT related to these transactions can either be used as a credit against output VAT or refunded pursuant to a special procedure.

Tag: Digital VAT Book

This shift weakens U.S. dominance in the region while allowing China to strengthen its influence in Latin America’s digital services sector. When it comes to international taxation, Argentina has taken steps https://www.vatupdate.com/2019/10/09/argentina-implements-digital-vat-book/ to ensure fair treatment of international transactions while avoiding double taxation. The country has established tax treaties with various nations, facilitating the smooth flow of trade and investment.

This new regime obliges VAT-taxable persons to act as collection agents when selling food products for human consumption, beverages, personal hygiene and cleaning items. A few exceptions include meats, fruits and bread made exclusively from wheat flour, among others. Taxable people registered for VAT purposes will also be subject to this regime when acquiring said products. Argentina’s system of tax treaties and foreign trade taxes represents a balanced approach toward international taxation.

DRRs can be distinguished into Periodic Transaction Controls (e.g.. SAF-T) or Continuous Transaction Controls (e.g. real-time reporting or mandatory e-invoicing). When it comes to e-invoicing the solution can be built either with or without clearance. Clearance is defined in terms of the role of the central IT platforms set up by the tax authority. In a non-clearance e-invoicing system, the supplier is able to send the e-invoice directly to its customer without having to request any confirmation (e.g. token) from the tax authority.

Romanian Form D394: Mandatory Domestic Sales & Purchase Reporting and Upcoming E-Invoicing Transition

Additionally, we will explore the municipal fees that municipalities impose for services like lighting and garbage collection. Argentina applies VAT to digital services based on the consumer’s locationArgentina implemented special VAT rules for digital services supplied by non-residents. The supplier doesn’t collect VAT; instead, credit card companies or financial institutions remit it to the tax authority as a withholding agent. Argentina introduced special VAT rules for digital services provided by non-residents in 2017. Under the digital service rules in Argentina, VAT is not collected and remitted by the supplier; instead, VAT is handled by an intermediary agent assigned by the Tax Authorities.

VAT in Argentina

The government has introduced measures to streamline tax processes, enhance taxpayer compliance, and reduce the administrative burden. Under these tax treaties, the participating countries agree to allocate taxing rights and establish mechanisms for the exchange of information. This helps to ensure that taxpayers are not subject to excessive taxation and promotes a fair and efficient international tax system. It’s important to note that the specific fees and rates can vary between municipalities, so it’s essential for property owners and residents to familiarize themselves with the regulations and fee structures of their local municipality.

• These taxes, often referred to as customs duties or import and export taxes, are imposed on goods and services crossing the country’s borders.
• Each province has the autonomy to establish its own tax rates, exemptions, and incentives, taking into account the specific economic and social context of the region.
• By implementing tax incentives and undertaking tax reforms, Argentina is striving to create a business-friendly environment, attract investments, and foster sustainable economic growth.
• From April 1, 2019, all taxpayers registered for VAT, the simplified regime and exempt entities should issue an e-invoice for any type of transaction and request the authorization code detailed below.
• VAT in Argentina in 2025 can be a matter that might concern you when starting a company here.
• These contributions are deducted from the employees’ monthly salary, subject to a certain cap.
• Legal support and advice in this direction can be provided by our lawyers in Argentina.
• This change allows consumers to see the tax impact of each purchase, promoting transparency.

This guide covers the essential steps ecommerce sellers need to take now that the UK has left the EU Customs Union and VAT regime to keep their cross-border sales going, avoid extra tax costs and frustrated customers. Non-established businesses — those with no fixed establishment in Argentina — must register as a taxpayer for VAT if they supply goods or services in Argentina. The measure requires invoices to include VAT and other indirect national taxes starting January 1, 2025. This change allows consumers to see the tax impact of each purchase, promoting transparency.

• Import duties and export taxes can vary based on factors such as the type of goods, their origin or destination, and any applicable trade agreements.
• We will explore the different taxes imposed by the Federal Administration of Public Revenue (AFIP), such as income tax and value-added tax (VAT).
• According to the legislation in force in Argentina, VAT returns must be submitted every month.
• On 5 November 2024, the 27 EU Member States reached unanimous political agreement on the VAT in the Digital Age (“ViDA”) proposal.
• By contributing to the system, employees gain access to benefits such as healthcare coverage, retirement pensions, disability benefits, and more.
• VAT legislation also includes ‘digital transactions’ (e.g. digital services, hosting, on-line technical support, software services, Internet services) provided from abroad as a taxable event.
• By imposing new tax compliance burdens on U.S. digital service providers, Argentina’s policy creates an opportunity for Chinese companies to expand their market share.

Import duties and export taxes can vary based on factors such as the type of goods, their origin or destination, and any applicable trade agreements. The tax incentives in Argentina are designed to encourage various activities, such as research and development, renewable energy projects, film production, and export-oriented businesses. Eligible taxpayers can benefit from reduced tax rates or even complete exemptions for a certain period of time.

Note that a Supreme Court decision has ruled on the non-applicability of this tax to Argentine branches of foreign companies. The levels of import duty currently range between 0% and 35%, except in cases where a specific minimum duty is applied or that involve merchandise with a specific treatment. These percentages were established considering the individual competitive conditions prevailing in different production sectors and the relative advantages of contributing to the introduction of equipment and technology for local industry. In general, merchandise originating from Latin America Integration Association (LAIA) countries is entitled to preferential duty.