2019 Worldwide VAT, GST and Sales Tax Guide - Argentina

VAT. A registered VAT payer is a business entity or individual who makes taxable supplies of goods or services in the course of doing business in Argentina and who is required to register for VAT.

VAT registration is mandatory in the following circumstances:

• Corporations or other legal entities: on commencement of activities
• Individuals: if annual taxable turnover from supplies of goods exceeds ARS1,344,065.86 and annual taxable turnover from supplies of services exceeds ARS896,043.90

IIBB. A registered IIBB payer is a business entity or individual who makes taxable supplies of goods or services in the course of doing business in Argentina. Registration is required on commencement of activities. No turnover threshold applies.

Group registration. In general, grouping is not allowed under Argentine law for VAT or IIBB. Legal entities that are closely connected must register for VAT or IIBB individually. Exceptions apply for joint ventures.

Non-established businesses. A “non-established business” is a business that has no fixed establishment in Argentina. It must register as a taxpayer for VAT or IIBB (through a local legal vehicle if created) if it makes regular supplies of goods or services in Argentina and if it is required to account for VAT on its supplies.

If a non-established business carries out taxable activities in the Argentine territory and is not required to register a local legal vehicle, any beneficiaries, recipients, lessees, borrowers, agents and intermediaries of nonresidents acting as substitute taxpayers will pay the VAT (the general rate being 21%) and use the amounts paid as input VAT to offset their own output VAT. When it is not possible to withhold the VAT, the law states that the substitute taxpayer will be responsible for paying the VAT. Nevertheless, at present, there are no regulations implementing the necessary mechanism in order to remit this VAT payment. The implementation of this mechanism must be monitored.

AFIP registration. A corporation’s legal representative is the chairman of the board. The request for registration before the national tax authorities (AFIP) must be filed by the legal representative of the legal entity, with the CUIT number and fiscal password (security level 3). The registration is filed through the application “MÓDULO INSCRIPCIÓN DE PERSONAS JURÍDICAS – F. 420/J — Versión 2.0” available on AFIP’s website. To complete the registration, the legal representative must bring the signed 420/J form to the correct AFIP office with all other mandatory documentation.

Tax representatives. In the case of corporations or other legal entities, the tax representative is the natural person who uses a “fiscal password” provided by the tax authority (AFIP) to carry out various tasks before AFIP. The name for this role is “relationship manager.” In order to file the affidavits corresponding to those taxes for which the taxable person has been registered, the relationship manager must access AFIP’s webpage (www.afip.gob.ar) and have a fiscal password with no less than security level 3, but he can delegate such activities to other individuals.

VAT registration. To register for VAT, the taxpayer or its legal representative must access AFIP’s website and using the fiscal password, select the option F420/T Alta de Impuestos/Regimenes/Alta de Impuestos.

IIBB registration. The IIBB is applicable for each of Argentina’s 24 local jurisdictions, and the procedure for registering a taxable person varies by jurisdiction. Taxpayers that develop their activities in only one jurisdiction need only register there. For taxpayers that carry out activities in more than one jurisdiction, registration will be governed by the multilateral agreement regime. These taxpayers will register on AFIP’s website, using the fiscal password to register in each jurisdiction in which activities will be carried out using the CM01 form. Additional documentation could be requested, depending on the local jurisdictions.

Late-registration penalties. A person that has not yet been registered for VAT and IIBB with tax authorities cannot perform commercial activities of any kind. Penalties and interest are assessed for late registration or payment, such as when a person developed a commercial activity before registering and paying. Penalties also apply to VAT or IIBB fraud.

Preregistration costs. Not applicable.

Reverse charge. Under the “reverse charge,” the buyer must calculate and pay the VAT. This method applies to supplies made outside Argentina if the use or effective exploitation of the supply occurs within Argentina and if the supply is within the scope of VAT. If the reverse charge applies, a non-established supplier is not required to register for VAT. The reverse charge does not apply for IIBB purposes.

Credits for VAT and IIBB paid. The VAT payer pays monthly on the total amount invoiced, offset by the amount of input VAT invoiced to the taxpayer during the same period. If the VAT credit is higher than the amount of VAT debit during any tax period, such excess is only credited against future tax liabilities, not refunded, except in the case of exporters who may request a refund.

In addition, the reimbursement of VAT credits resulting from the purchase, manufacture, preparation or import of fixed assets (other than automobiles) that remain as a VAT credit for the taxpayer after six months may be requested, under certain conditions.

A taxable person that has paid too much VAT in a period in error may request a refund of the overpaid amount. Interest is paid by the VAT authorities on overpaid tax at the rate of 0.5% per month.

If the IIBB tax assessment shows an excess in favor of the taxpayer, it will be allocated and deducted in future filings.

Digital economy. As per current rules, digital services received by established VAT-registered taxpayers have to apply the reverse-charge mechanism. For digital services received by Argentine individuals (i.e., nontaxpayers), such services are subject to VAT in Argentina when rendered by foreign parties where the effective use of the services is conducted in Argentina.

The definition of digital services includes, among others: website provision and hosting; digitalized product provision; remote system management and online technical support; web services comprising data storage and online advertising; software as a service (SaaS); access or download of images, text, information, video, music, games (including gambling games), including the use of streaming technology without downloading those items to a storage device; dating websites; internet services provision; e-learning, and data handling and calculation through the internet or other networks.

The list of digital service providers for whom the collection agents must collect the VAT is published and updated by AFIP.

The responsible party for reporting and paying the VAT is the service recipient. If the recipient is VAT registered it will be responsible for the payment of the tax. However, if it is a private consumer (i.e., not VAT registered), the payment will be made by a resident intermediary (e.g., a credit card company or bank). They are required to act as a collection agent. If more than one intermediary is involved, the one required to act as a collection agent will be the agent with the closest commercial relationship with the digital service provider.

Deregistration. Taxpayers deregister from VAT through the AFIP webpage, with the taxable person or the tax representative using the fiscal password.

To deregister from IIBB, the taxable person should comply with the mechanisms established by the local jurisdiction. Taxpayers who wish to deregister from IIBB under the multilateral agreement regime need to file the request online on the AFIP website.

Exemption from registration. The VAT law in Argentina does not contain any provision for exemption from registration.

Voluntary registration. The VAT law in Argentina does not contain any provision for voluntary VAT registration, as there is no registration threshold (i.e., all entities that make taxable supplies are obliged to register for VAT).

The time when VAT or IIBB becomes due is called the “time of supply” or “tax point.” The basic time of supply for goods is the earlier of when the goods are delivered or when the invoice is issued. The basic time of supply for services is the earlier of when the service is performed or completed, or when full or partial payment of the consideration is received.

Imported goods. The time of supply for imported goods is when the goods clear all customs procedures. At that time, VAT is due along with custom duties.

The VAT rate applies to the normal price defined according to import duties plus the taxes due to the import itself or deriving from it.

Reverse-charge services. The measures regarding reverse-charge services apply to VAT, not to IIBB. The time of supply for a reverse-charge service is the earlier of when the service is provided or when the consideration is paid in full or in part.

The recipient of the service must pay the tax within 10 days after the time of supply arises. The amount paid may be treated as input VAT (see Section F) in the tax period immediately following the tax period when the tax point arose.

Deposits and prepayments. The only provisions in Argentine VAT law concerning deposits and prepayments are those where a prepayment fixes the price payable. In these situations, the “time of supply” occurs at the moment in which the prepayment is made.

The time of supply rule for deposits and prepayments does not differ for supplies of goods or services.

There are no specific rules for where the deposits and prepayments are refundable or nonrefundable, or where the supply does not take place. Therefore, in practice these aspects do not normally change the time of supply rules outlined above.

Goods sent on approval for sale or return. Argentina does not have specific rules for these circumstances.

Continuous supplies. For continuous supplies, the time of supply is established by law on a monthly basis. This means that the time of supply is triggered on a monthly basis, i.e., on the last day of each month, such that there is a triggering event each month.

Leased assets. The time of supply would generally take place upon the due date or the collection of the rental, whichever occurs first.

Argentina does not refund VAT incurred by businesses that are neither established in Argentina nor registered for VAT there. However, a VAT refund system does apply to purchases made by foreign tourists.

Returns. VAT and IIBB returns are submitted for monthly periods. Certain entities qualifying as small or medium companies may apply for VAT submissions on a quarterly basis.

Returns and payment in full are due between the 12th to the 22nd day of the month following the end of the return period. The actual due date depends on the last figure of the taxpayer’s identification number and the due date may vary from month to month.

Return liabilities must be paid in Argentine pesos. VAT payments may be offset by a credit balance arising from another tax collected by the Federal Administration for Public Revenues. This measure does not apply to IIBB.

In addition, VAT and IIBB payments may be offset with withholdings of these taxes. If the withholdings generate a credit in favor of the company, the company may ask for reimbursement from the local tax authorities. In the case of VAT, this credit may be used to offset other national taxes or sold to another company.

Special schemes. Not applicable.

Electronic filing and archiving. VAT and IIBB are submitted on the tax authority’s webpage. In general, a copy of those electronically filed tax returns can be viewed and retrieved from the website, but it is highly recommended that taxpayers keep their own copies in secure storage.

Annual returns. Not applicable for VAT. For IIBB, taxpayers registered under the multilateral agreement regime must file an annual affidavit — form CM05 — due in June of the following year. For local taxpayers, some jurisdictions, such as the City of Buenos Aires, require an annual filing.