Tuesday, October 15, 2013
A new law in Argentina which introduces significant changes to the taxation of dividends and capital gains came into force on September 23, 2013 upon being published in the Argentine Official Gazette.
The new law applies to taxable events that take place from the day of the law's entry into force.
Under the new law a 15 percent income tax will be applied to net gains from the sale of shares, bonds and other securities. Prior to the law coming into effect foreign parties (non-Argentine residents) were exempt from tax on such transactions.
For foreign investors, the tax amounts to 13.5 percent of the gross sale price, based on a presumption that the net gain is 90 percent of the gross sale price.
If both the seller and the buyer are foreign parties, the buyer is required to pay the tax to the Argentine authorities, according to the law.
Certain dividend and profit distributions made by Argentine companies, trusts and certain mutual funds would be taxed at a rate of 10 percent under the new legislation. Profit remittances made by permanent establishments and branches of nonresidents to resident individuals and individual and corporate nonresidents would also be subject to the tax. Dividend and profit distributions made to resident companies would continue to be exempt from tax.