CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Argentina Imposes Withholding Tax On Exports

Argentina Imposes Withholding Tax On Exports

by Mike Godfrey, Tax-News.com, Washington

16 January 2014


Through resolution No 3,577, the Argentine tax authority (AFIP) has introduced a 0.5 percent withholding tax on exports in "triangular operations" made on or after January 7, 2014. An additional withholding tax of 1.5 percent will be applicable for exports to low-tax jurisdictions.

The tax will be imposed solely for transactions where the country of physical destination is different from the country shown in the invoice. In other words, the tax will apply only if there is an intermediary that is not the final recipient. AFIP's objective is to deter certain transfer pricing practices where a fictitious intermediary buys the goods for a low price, and then resells them for a higher price. The only way to avoid the withholding tax is to make sure the goods are actually shipped to the country wherein the intermediary is established.

The withholding tax will normally be collected from the exporter as the goods are processed by the Argentine customs authority. It should merely serve as an advance corporation tax payment, which creates a cash flow disadvantage for the Argentine taxpayer. Given that Argentina generally has double-digit inflation rates, one would expect the tax to be quite punitive.

It should be noted that only "definitive exports for consumption" are covered. Special regimes, such as temporary admission, therefore remain excluded.

This new mechanism is expected to reduce the risk of tax evasion and improve tax collection, despite being unconventional by international standards. This tax is without prejudice to AFIP's ability to adjust prices under general transfer pricing legislation.

TAGS: tax | corporation tax | tax authority | withholding tax | standards | Argentina

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »