Sign up for tax alert emails GTNU homepage Tax newsroom Email document Print document Download document
April 12, 2021
Argentine Government modifies bill it plans to send to Congress that would raise corporate income tax rates
The new bill would increase the thresholds at which the previously proposed rates would apply. As in the prior bill, the new bill would also extend the 7% withholding tax to dividends from profits accrued in tax years beginning 1 January 2021 and thereafter.
On 7 April 2021, the Argentine Executive Power circulated an updated version of the bill that it plans to send to Congress that would increase corporate income tax rates for tax years beginning 1 January 2021 and onwards. The previous version of the bill was circulated on 11 March 2021 (see EY Global Tax Alert, Argentine Government plans to send bill to Congress that would raise corporate income tax rates, dated 16 March 2021).
Characteristics of the bill
Like the prior version, the new bill would replace the 25% fixed tax rate currently in effect with a progressive tax scale. The new bill, however, would increase the thresholds at which the new rates would apply. For tax years beginning 1 January 2021, the following ranges would apply:
The new tax rates also would apply to permanent establishments in Argentina as defined by the income tax law.
The new bill also would allow the ranges of net taxable income to be adjusted annually beginning 1 January 2022, considering the annual variation as of October of the previous year of the consumer price index (IPC for the Spanish acronym) provided by the National Statistics and Census Institute (INDEC), an agency of the Ministry of Economy.
As in the prior bill, the new bill would permanently extend the 7% withholding tax rate currently in force for dividend distributions from profits accrued in tax years beginning 1 January 2021 and onwards.
For additional information with respect to this Alert, please contact the following:
Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young Abogados, Latin American Business Center, Madrid
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific