Argentina: Digital services VAT regulation published

VAT registration is voluntary for foreign businesses established in Argentina and offering digital products and services. One of our Argentinian lawyers can tell you more about the VAT in Argentina and the rates imposed in 2025 for varied goods and services available for sale purposes. We have experts who can provide essential legal advice for international entrepreneurs who want to start a business in Argentina.

Argentina: Implemented Resolution 5319/2023, including VAT on digital sales transactions

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.

Implemented Resolution 5319/2023, including VAT on digital sales transactions

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 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.

Argentina implements ‘Digital VAT Book’

Employers in Argentina have the responsibility to contribute to the social security system on behalf of their employees. These contributions are calculated based on the employees’ total monthly compensation. It is important for employers to accurately determine and fulfill their obligations to avoid any penalties or legal issues. The fees charged by municipalities are determined at the local level and vary based on factors such as property value, location, and construction details.

VAT Registration Thresholds in Argentina

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.

VAT registration

By eliminating or reducing double taxation, these treaties offer clarity and certainty to individuals and businesses engaged in cross-border activities. Overall, double taxation agreements play a crucial role in facilitating international trade and investment by providing certainty and clarity in the taxation of cross-border transactions. Furthermore, we will explain the different taxation modes in Argentina, including the general tax regime and the simplified tax system. By understanding these modes, you will be able to determine the most suitable tax structure for your individual or business needs. We will also provide insights into the agreements on the avoidance of double taxation that Argentina has with various countries, as well as the administration of taxes by the AFIP. This includes internet services, software, technical support online, and other digital services.

• Fonoa is well-positioned to assist businesses in updating their invoicing systems to comply with these new requirements, enhancing their service offerings and ensuring compliance with the new regulations.
• 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.
• Monthly VAT returns must be submitted by all companies with an Argentinian VAT number, detailing all taxable supplies (sales) and inputs (costs).
• We will also provide insights into the agreements on the avoidance of double taxation that Argentina has with various countries, as well as the administration of taxes by the AFIP.
• The fee amount is determined by applying 3% to the net price of the operation resulting from the invoice or equivalent document.
• The taxpayers must report such transactions up to the due date for filing the Income Tax return for the fiscal year to which they correspond.
• Interest is paid by the VAT authorities on overpaid tax at the rate of 0.5% per month.
• The liability for return filing and payment of taxes does not fall on the foreign service provider, but rather on the credit card or financial institution that withholds VAT, or the Argentine recipient that collects and remits the VAT.
• The role of AFIP is to review the accuracy and completeness of these declarations, ensuring the proper collection of taxes.

PwC Argentina

This number is made up of two identification digits – eight digits – and a validation digit (xx-yyyyyyyy-z). On 5 November 2024, the 27 EU Member States reached unanimous political agreement on the VAT in the Digital Age (“ViDA”) proposal. In what follows, we provide you with a bullet point summary of the key measures under each of the three pillars of ViDA. As summarized in our previous blog, on 8 December 2022 the EU Commission published one of the biggest VAT law change proposals.

• 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.
• On 5 November 2024, the 27 EU Member States reached unanimous political agreement on the VAT in the Digital Age (“ViDA”) proposal.
• An expedient VAT recovery mechanism for VAT credit balances on certain infrastructure and investments in capital goods is available, to the extent that companies have not been able to recover the VAT within six months.
• The reader also is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated.

What are Digital Reporting Requirements (DRRs)?

In Argentina, the responsibility for VAT collection and remittance does not lie with the foreign service provider. Since it is the credit card or financial institution that should withhold VAT, or the recipient that should collect and remit the VAT, the non-resident digital service provider should not need to register for VAT in Argentina. In order to minimizing the administrative burden for taxable persons, the reporting system will take advantage of the issuance of an electronic invoice to automate the process of reporting.

Will your business need to pay VAT on digital services in Argentina in 2024?

The administration and collection of provincial taxes are carried out by the provincial revenue agencies, ensuring compliance with the respective tax laws and regulations. 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. The specific rates and regulations for foreign trade taxes in Argentina are determined by the country’s tax laws and customs regulations.

What specific changes are being implemented in the Fonoa invoicing system?

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.

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.

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.

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.

VAT reporting obligations – why the changes are required?

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.

Furthermore, AFIP administers social security contributions, which include employer and employee contributions. It ensures that employers fulfill their obligations towards social security by collecting and allocating the necessary funds for pension, healthcare, and other social security benefits. Similar to the turnover tax, real estate tax is imposed by each Argentine jurisdiction. It is levied on the ownership of real estate located in the territory of the jurisdiction. The tax credit related to exports and other taxable activities can only be refunded in proportion to the exports, and can be fully refunded to a cap of 21% of the freight on board (FOB) value of the exported products.

• Argentina’s VAT system is governed by the National Tax Code and other VAT-specific laws.
• According to the legislation in force in Argentina, VAT returns must be submitted every month.
• By contributing to the system, employees gain access to benefits such as healthcare coverage, retirement pensions, disability benefits, and more.
• We will explore the different taxes imposed by the Federal Administration of Public Revenue (AFIP), such as income tax and value-added tax (VAT).
• 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.
• On 5 November 2024, the 27 EU Member States reached unanimous political agreement on the VAT in the Digital Age (“ViDA”) proposal.
• The average tax rate ranges between 1% and 1.5% and it is applicable on the economic value of the contract.

Regarding the internal documents of a company with economic activities in Argentina, these should also contain notifications regarding the VAT corrections, where applicable. This guide provides an in-depth overview of VAT (Value Added Tax) in Argentina, including applicable rates, registration requirements, invoicing rules, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Argentina or with Argentine customers. The liability for return filing and payment of taxes does not fall on the foreign service provider, but rather on the credit card or financial institution that withholds VAT, or the Argentine recipient that collects and remits the VAT. The non-resident digital service provider should not be required to file a VAT return in Argentina. Argentina’s tax treaties cover a wide range of areas, including income tax, capital gains tax, withholding tax, and more, allowing for the effective management of tax liabilities in international transactions.

Australia’s Digital Tax Policy

Under this regime, taxpayers must comply with a range of tax obligations and regulations. All VAT-taxable persons, including those with exempt transactions, must record all transactions, including imports and exports, on the AFIP website. The system generates a pro forma VAT return that the taxpayer must validate or amend, allowing the tax authority real-time oversight of transactions and VAT balances. DRR is any obligation for VAT taxable persons to periodically or continuously submit data in a digital way on all (or most of) their transactions, including by means of mandatory e-invoicing, to the tax authority.

Invoices will now detail VAT and “Other Indirect National Taxes.” Existing electronic systems will reflect these changes in XML automatically, with updates required in PDFs. This transparency benefits consumers by clarifying the impact of taxes on their transactions. The VAT threshold in Argentina is set at ARS 300,000 for goods available for sale purposes, and ARS 200,000 for a wide range of services. You can discuss more on this topic with our Argentinian attorneys with experience in tax compliance. Also, those interested in opening a company in Argentina can ask for a free case evaluation and enjoy personalized offers tailored to their business needs. Argentina’s VAT system is governed by the National Tax Code and other VAT-specific laws.

Under this system, taxpayers are required to calculate and declare their own tax liability based on their assessment of income and other relevant factors. The role of AFIP is to review the accuracy and completeness of these declarations, ensuring the proper collection of taxes. The simplified tax system in Argentina offers a more streamlined approach for eligible taxpayers. An essential characteristic of this system is that qualified taxpayers are exempt from income tax, VAT, and certain contributions. Municipal fees play a crucial role in ensuring the proper functioning and maintenance of local infrastructure. By charging fees for services like lighting and garbage collection, municipalities are able to allocate resources more effectively and provide residents with essential services that contribute to their quality of life.

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.

• Whether you are an individual taxpayer or a business owner, it is crucial to have a solid understanding of the tax structure, rates, exemptions, and recent reforms in Argentina.
• These contributions are calculated based on the employees’ total monthly compensation.
• This simplified tax structure aims to reduce administrative burdens and encourage compliance among smaller taxpayers.
• 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.
• 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 preparation for the new rules, businesses will have to make significant changes to their systems and processes, and in order to be ready to implement these in a timely manner, it is important to consider and prepare for these on time. The taxpayers must report such transactions up to the due date for filing the Income Tax return for the fiscal year to which they correspond. There will be no possibility to continue issuing summary invoices for a calendar month as it goes against the aim of the almost real-time reporting system. Understanding the municipal fees in Argentina is crucial for property owners and residents to effectively manage their finances and contribute to the sustainable development of their local communities. There is no restriction regarding the employment of foreigners, provided they hold working visas. Invoices and receipts must include a section detailing the amount corresponding to VAT and other indirect national taxes.

• Income tax in Argentina is progressive for individuals, meaning the tax rate increases as income levels rise.
• Overall, double taxation agreements play a crucial role in facilitating international trade and investment by providing certainty and clarity in the taxation of cross-border transactions.
• These initiatives demonstrate the government’s commitment to promoting entrepreneurship, innovation, and development in the country.
• The international transactions to be reported are those carried out during the fiscal years of the reporting entity that close on or after 1 August 2022.
• In Argentina, the Federal Administration of Public Revenue (AFIP) plays a crucial role in the administration and collection of taxes.
• Under these tax treaties, the participating countries agree to allocate taxing rights and establish mechanisms for the exchange of information.
• These incentives may include tax credits, exemptions, or reduced tax rates for eligible taxpayers.

VAT in Argentina in 2025 can be a matter that might concern you when starting a company here. On the other hand, citizens living here can choose us when applying for Argentine citizenship. We invite you to contact our law firm in Argentina and discover the legal services we can provide. We specify that in the case of services provided to another business or company, the latter can apply for the reverse-charge mechanism in terms of VAT, and therefore, there is no need to collect it from the respective client.

ARCA has announced a Consumer Tax Transparency Regime, requiring large companies to itemize VAT and other indirect taxes on invoices starting January 1, 2025. This initiative aims to provide consumers with https://www.vatupdate.com/2019/10/09/argentina-implements-digital-vat-book/ a clear breakdown of tax components in their purchases, enhancing transparency and informed decision-making. Provincial and municipal authorities are encouraged to adopt similar measures for local taxes.

The same tax treatment can apply to other services in Argentina, like the ones offered by hotels, restaurants, and garages, for example. The 10.5% VAT rate also applies to the supply of advertising and publicity in some situations, medical assistance, housing construction, and sales and imports of bovine animals. In the meantime, it is also important to remember that Member States may not necessarily wait until the prescribed date in ViDA to introduce these changes. For example, several EU Member States have or are proposing to introduce mandatory e-invoicing and/or new reporting obligations including for example Germany, Belgium, Poland, France, and Spain. Therefore, it is important to monitor these requirements in the short term and in preparing for those changes, take account of the wider EU changes coming down the tracks. Argentina’s social security system plays a crucial role in providing financial protection and support to individuals employed under an employment contract within the country.

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.

• Invoices will now detail VAT and “Other Indirect National Taxes.” Existing electronic systems will reflect these changes in XML automatically, with updates required in PDFs.
• 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.
• Fonoa is well-positioned to assist businesses in updating their invoicing systems to comply with these new requirements, enhancing their service offerings and ensuring compliance with the new regulations.
• 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.
• There is no specific method stated in the legislation for allocating the tax credit related to exports, but taxpayers are able to use any methods of calculation that would be suitable to their business model.
• There are different types of electronic invoices, also called electronic receipts, depending on the tax status of both the issuer and the recipient.

While tax treaties promote economic cooperation and prevent double taxation, foreign trade taxes contribute to the regulation and control of trade flows. In addition to tax treaties, Argentina also has a robust system of foreign trade taxes. These taxes, often referred to as customs duties or import and export taxes, are imposed on goods and services crossing the country’s borders. These tax treaties provide guidelines for the allocation of taxing rights and mechanisms for the exchange of information between Argentina and its treaty partners.

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.

It ensures the well-being of workers and helps fund various social programs and benefits. In addition to tax incentives, Argentina has also undergone tax reform in recent years to simplify the tax system and improve tax administration. The goal of these reforms is to make the tax system more efficient, transparent, and user-friendly for taxpayers.