Procedures after setting up a company in Argentina

After completing the basic incorporation procedures to obtain a Business Registration Certificate and Tax Identification Number (CUIT), many investors may assume that the process of establishing a business in Argentina is over. However, in fact, the official operation requires businesses to carry out post-establishment procedures. Viet An Law would like to guide you through some procedures after establishing a company in Argentina through the article below.

Main tax declaration obligations after setting up a company in Argentina

The main obligations that businesses in Argentina need to be aware of include:

Corporate Income Tax

• Object: Companies incorporated in Argentina are taxed on global income. A branch of a foreign company is also considered a taxable resident.
• Tax rate: A progressive tax rate scale applies, ranging from 25% to 35% depending on the company’s taxable income. These income levels are adjusted annually. (For example, for FY 2024, the highest tax rate of 35% applies to income in excess of ARS 76,049,485.68).
• Tax on dividends/profits remitted abroad: A tax rate of 7% is applied to dividends distributed or after-tax profits remitted to the overseas headquarters.
• Tax filing and payment: Companies must make advance corporate income tax payments throughout the financial year, usually monthly. Year-end tax returns are filed after the end of the fiscal year.

Value Added Tax (Impuesto al Valor Agregado – IVA)

• Object: Applies to the sale of products, most services, and the import of goods and services.
• Tax rate: The standard tax rate is 21%. There are also special tax rates such as 27% (e.g., telecommunications services, water supply, electricity, gas not for residential use), 10.5% (e.g., certain food items, medical services, housing construction), and 2.5% (e.g., importing or supplying some print or digital newspapers/magazines). Exports are usually subject to a 0% tax rate.
• File and pay taxes: File your IVA monthly, usually from the 12th to the 22nd of the month following the tax period.

Gross Receipts Tax (Impuesto sobre los Ingresos Brutos – IIBB)

• Object: This is a provincial tax, levied on the total revenue arising from regular business activities within a specific province. Each province has its own regulations and tax rates.
• Tax rate: Varies by province and type of activity. For example, in the Federal Capital (Buenos Aires), the average tax rate can be around 4% to 4.5% for commercial services and around 3% for industry and goods.
• Tax declaration and payment: Monthly declaration and payment.

Personal Property Tax (Impuesto sobre los Bienes Personales – applicable to shares)

• Object: Argentine companies must pay this tax on all shares issued by them and owned by individuals (resident or non-resident) or companies residing abroad.
• Tax rate:25% on the value of shares as of December 31 each year, based on the Financial Statements of the respective fiscal year. The company has the right to request shareholders to refund this tax amount.

Other taxes

• Financial Transaction Tax (Impuesto sobre los Débitos y Créditos en Cuentas Bancarias): Applies to debit and credit transactions on bank accounts, although there may be tax credits for small businesses.
• Import Tax: The tax rate varies from 0% to 35% depending on the type of goods.

Other obligations after company incorporation in Argentina

Registration and Filing at the Commercial Public Registry (IGJ in Buenos Aires or provincial equivalent)

• Filing of Annual Financial Statements: Companies (in particular S.A. – Sociedad Anónima and S.R.L. – Sociedad de Responsabilidad Limitada whose charter capital exceeds a certain threshold, e.g. ARS 50,000,000 for SRL) must file audited annual financial statements. These reports typically include the Balance Sheet, the Statement of Business Results, the Statement of Changes in Equity, and the Statement of Cash Flows.
• Filing Annual Information Return: Submit detailed information about directors, shareholders/capital contributors, share/capital contribution structure, registered address, and principal business activities.
• Update on New Regulations (Buenos Aires): As of November 2024, the new regulations of the IGJ in Buenos Aires may have relaxed some compliance requirements for foreign companies, including the elimination of some annual information filing requirements and the simplification of the disclosure of information on the Ultimate Beneficial Owner (UBO).

Archiving Business Records

The company must maintain mandatory accounting books (such as logbooks, ledgers) and other legal books as prescribed. Tax records must normally be kept for a minimum of 5 years. Social security records should also be kept for 5 years.

Annual General Meeting of Shareholders/Members (AGM/AMM)

Especially for joint stock companies (S.A.), the Annual General Meeting of Shareholders must be held. The Board must convene this meeting within 4 months of the end of the fiscal year.

Information Modes with AFIP

One of the important modes is the Disclosure of Associated Transaction Information (Declaración Jurada de Operaciones con Sujetos Vinculados). Under AFIP regulations, companies operating in Argentina are obliged to declare and provide details of the relationships and transactions that arise with related parties. The term “affiliate” here includes entities that have an ownership, control, or management relationship with the company (e.g., parent companies, subsidiaries, sister companies, or individuals with significant influence) both domestically and internationally. The main purpose of this reporting regime is for AFIP to examine and evaluate whether transactions between the company and its affiliates are carried out according to the independent market price principle, in order to prevent the transfer of profits abroad or between companies in the same group through misvaluation of transactions.

In addition, Argentina, as a member of the international community, also needs to comply with the Common Reporting Standard (CRS) and FATCA. CRS (Common Reporting Standard) is a global standard for the automatic exchange of financial information between participating countries to combat cross-border tax evasion. Similarly, FATCA (Foreign Account Tax Compliance Act) is a U.S. law that requires foreign financial institutions to report information about accounts held by U.S. citizens or tax residents. Argentina’s participation in and compliance with these agreements means that financial institutions in Argentina (including the banks where your company opens accounts) are obliged to collect and report information on financial accounts held by foreign tax residents to AFIP. AFIP will then automatically exchange this information with the tax authorities of the relevant countries in accordance with international agreements.