In Argentina, employers bear a significant portion of the tax burden related to employment. The mandatory employer contributions are broken down as follows:

Social Security Contributions (Contribuciones de Seguridad Social)

Social security contributions are the most substantial employer tax in Argentina. The employer Social Security Tax rate varies based on the company's primary activity and annual sales:

• 26.4% for companies primarily engaged in providing services or trade with annual sales over a regulatory threshold.
• 24% for all other companies.

Argentine employers have an exemption of ARS 7,003.68 per month per employee from social security contributions. This amount may be adjusted periodically.

Other Contributions

• Obra Social (Health Insurance): Employers contribute 6% of the employee's gross salary toward health insurance.
• Sindicato (Union Contributions): Contributions to employees' unions may be required, and the rate varies depending on the relevant union and collective bargaining agreements.
• ART (Workers' Compensation Insurance): Rates depend on the risk level associated with the company's activities.

Withholding Tax (Impuesto a las Ganancias)

Employers are obligated to withhold income tax (Impuesto a las Ganancias) from employee salaries. The specific amount withheld depends on the employee's taxable income and associated tax brackets.

Corporate Income Tax

While not a direct employment tax, Argentina has a progressive corporate income tax system:

• 0 - ARS 5 million: 25%
• ARS 5 million - ARS 50 million: ARS 1,250,000 + 30% on the amount exceeding ARS 5 million
• Over ARS 50 million: ARS 14,750,000 + 35% on the amount exceeding ARS 50 million.

In Argentina, a progressive income tax system is used. This means that the tax rate increases as the taxable amount increases. Employers are responsible for withholding income tax from employee wages and remitting it to the tax authorities.

Social Security Contributions

A total of 17% of an employee's gross salary is deducted for social security. This is allocated as follows:

• 11% to the pension fund
• 3% to healthcare
• 3% to social services

Social security deductions have a monthly cap, which is adjusted periodically. As of December 1, 2023, it is ARS 1,157,112.83.

Personal Deductions

Employees can reduce their taxable income with various personal deductions. To claim these deductions, employees must submit the required information to their employers, often through a form like Form 572. Some common deductions include:

• Family Allowances: Deductions for a spouse, children, and other qualifying dependents.
• Mortgage Interest: Deductions for interest paid on a mortgage for the employee's primary residence.
• Domestic Service Expenses: Deductions for salaries paid to domestic workers.
• Medical Expenses: Deductions for certain medical expenses.

In Argentina, the standard VAT rate is 21%, applied to most services. Certain services may be subject to a reduced VAT rate of 10.5%. These can include transportation services and hospitality services. Some services are exempt from VAT. Examples include healthcare, education, and some financial services.

VAT for Domestic Services

Services rendered within Argentina to recipients located in Argentina are generally subject to VAT. Service providers must register to collect VAT if they exceed the established annual revenue threshold. VAT-registered businesses must issue invoices detailing the VAT amount charged.

VAT for Services Provided from Abroad (Digital Services)

Non-resident providers of digital services to individuals in Argentina may be liable for VAT, even if they lack a physical presence in the country. Digital services subject to VAT include software downloads, online subscriptions, streaming services, and other electronically delivered services. For some services, the VAT liability may be shifted to the Argentinian recipient under a reverse charge mechanism. In specific cases, credit card companies or financial institutions in Argentina may be designated as withholding agents for VAT on digital services.

Exemptions and Special Cases

Certain exceptions and specific regulations may apply in situations such as exports of services and transfer of technology agreements. Services exported from Argentina are generally zero-rated for VAT purposes. Technical service fees may have different VAT rates depending on whether the agreement is registered with the National Institute of Industrial Property (INPI).

The Knowledge Economy Promotion Regime in Argentina offers several incentives to companies engaged in knowledge-intensive activities. These benefits include a reduced income tax rate of up to 60% reduction based on the company size and a tax credit for up to 70% of employer social security contributions. However, to qualify, companies must meet specified criteria and register under the Knowledge Economy Promotion Regime.

Software Promotion Regime

The Software Promotion Regime offers benefits to companies involved in software development. These benefits include a reduced income tax rate of up to 60% depending on the company size, a tax credit for up to 70% of employer social security contribution, and accelerated amortization of certain intangible assets.

Renewable Energy Promotion Regime

Argentina promotes investment in renewable energy sources. This regime offers benefits such as accelerated depreciation of assets used in renewable energy projects, early refund of VAT paid for purchases related to renewable energy projects, and reduced import duties on equipment for renewable energy projects.

Other Incentives

The Mining Promotion Regime offers several incentives for mining investments, including tax stability and exemptions from certain import duties. Additionally, specific provinces within Argentina may offer additional tax incentives to attract investment in particular regions through Regional Promotion Regimes.

Important Considerations

Before pursuing tax incentives, it's important to carefully review the specific eligibility requirements for each program. Tax incentive programs generally involve an application and approval process. Also, tax incentive schemes in Argentina can be subject to change, so it's advisable to consult with a tax professional for updates.