GLOBAL INDIRECT TAX. Argentina. Country VAT/GST Essentials. kpmg.com TAX

Transcription

1 GLOBAL INDIRECT TAX Argentina Country VAT/GST Essentials kpmg.com TAX

2 b Argentina: Country VAT/GST Essentials

3 Argentina: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to VAT? 2 What is the standard rate of VAT? 2 Are there any reduced rates, zero rates, or exemptions? 2 Registration 3 Who is required to register for Argentinean VAT? 3 Are there penalties for not registering or late registration? 3 Are there any simplifications that could avoid the need for an overseas company to register for VAT? 3 VAT Grouping 4 Is VAT grouping possible? 4 Can an overseas company be included in a VAT group? 4 Returns 4 How frequently are VAT returns submitted? 4 Are there any other returns that need to be submitted? 4 VAT Recovery 5 Can I recover VAT if I am not registered? 5 Does your country apply reciprocity rules for reclaims submitted by non-established businesses? 5 Are there any items that you cannot recover VAT on? 5 Invoices 6 What do I have to show on a tax invoice? 6 Can I issue invoices electronically? 6 Is it possible to operate self-billing? 6 Transfers of Business 6 Is there a relief from VAT for the sale of a business as a going concern? 6 Options to Tax 7 Are there any options to tax transactions? 7 Head Office and Branch Transactions 7 How are transactions between head office and branch treated? 7 Bad Debt 8 Am I able to claim relief for bad debts? 8 Anti-Avoidance 8 Is there a general anti-avoidance provision under VAT law? 8 Penalty Regime 9 What is the penalty and interest regime like? 9 International Supplies of Goods and Services 5 How are exports of goods and services treated? 5 How are goods dealt with on importation? 5 How are services which are brought in from abroad treated for VAT purposes? 5 All information reflected in this document was obtained/summarized from KPMG in Argentina as of October 2011.

4 2 Argentina: Country VAT/GST Essentials Scope and Rates What supplies are liable to VAT? VAT The Argentinean value-added tax (VAT), is tax-based on the value-added method. It is applied following the subtraction method on a financial basis of tax against tax. VAT is due on: the sale by VAT taxpayers of movable property located in Argentina work, leasing and services specified in the law, provided they are performed in Argentina the final importation of movable property; and the use or exploitation in Argentina of services which are supplied by non-residents (i.e. import of services). For VAT purposes, the concept of taxable sale includes: sales and other transfers for consideration of movable property located in Argentina (payment in kind, allocation of property on the liquidation of a company, contribution to a company) the incorporation of movable goods produced by the taxpayer in the case of leasing and rendering of services exempt or excluded from taxation transfers of movable goods which are attached to the soil at the time of the transfer, provided they have their own individuality and represent goods in trade for the taxpayer the removal of movable property by the owner for his personal use or consumption; and transactions carried out by commission agents, consignees and other who sell or buy personal property in their own name but on behalf of third parties. Under the VAT system, tax is levied at each stage of the manufacturing and distribution process on a non cumulative basis. The accumulation of tax is avoided through the deduction of VAT invoiced to the entity. The entity pays VAT on the total amount invoiced in each monthly tax period, but it is entitled to recover the input VAT that was invoiced to the entity during the same period. If, in any tax period, the credit for input VAT is higher than the amount of VAT due on output, the entity is not entitled to a refund (unless the refund is related to exports); rather, the excess is credited against future VAT liabilities. What is the standard rate of VAT? The standard rate of VAT is 21 percent. Are there any reduced rates, zero rates, or exemptions? There is a reduced rate of 10,5 percent for certain goods and services, including: sales or imports of cattle and sheep and other derivatives which are fresh or frozen as well as of fruits and vegetables fresh or frozen under certain conditions imports of certain capital goods included in the tariffs list of the Common Nomenclature of MERCOSUR certain supplies of services related to the soil and farming activities certain constructions relating to dwelling houses interest when the loans are provided by certain financial institutions transport services supplied by taxies and other means of transport if the distance travelled is over 100 km specified supplies of newspapers and periodicals; and medical services in specific cases. There is an increased rate of 27 percent for certain services: telecommunication services, except radio broadcasting and services rendered by Encotel or news agencies the supply of gas or electrical power, except public illumination; and the supply of current water and sewage services including draining and cleaning of undrained wells, with certain exemption.

5 Argentina: Country VAT/GST Essentials 3 Registration Exempt services services rendered by the state, provinces, municipalities and institutions belonging thereto medical services in specified cases transportation of persons and freight, including international transportation. Transport supplied by taxis if the distance travelled is less than 100 km financial placements and services in those cases listed in the law (cash deposits with financial institutions, loans made between financial institutions, negotiable bonds publicly offered under Law 23,576) services proper of directors, controllers and members of boards of stock corporations; and the letting of immovable property relating to dwelling houses and to farming, the letting of immovable property with monthly rents less than ARG$ 1,500 and, subject to conditions, relating to certain other services, except for conferences, meetings, and similar events. Exempt goods Imports and sales of: books retail distribution of newspapers and periodicals shares, bonds and securities planes constructed and destined for the transportation of passengers and/or freight, and ships for the exclusive use in commercial activities or for defense and security; and exports of goods and services are zero-rated. Who is required to register for Argentinean VAT? If businesses make taxable supplies in Argentina through a permanent establishment they will be required to register and account for local VAT. Are there penalties for not registering or late registration? There are penalties for failure to file tax returns based on the general terms fixed by the tax administration. Are there any simplifications that could avoid the need for an overseas company to register for VAT? VAT registration is not possible without a permanent establishment in Argentina. If the company (permanent establishment) performs activities in the country, VAT registration is mandatory.

6 4 Argentina: Country VAT/GST Essentials VAT Grouping Is VAT grouping possible? No. Can an overseas company be included in a VAT group? Not applicable. Returns How frequently are VAT returns submitted? Taxpayers are required to submit VAT returns on a monthly basis. Are there any other returns that need to be submitted? Yes, returns covering turnover tax and excise tax.

7 Argentina: Country VAT/GST Essentials 5 VAT Recovery Can I recover VAT if I am not registered? No, except few cases (for example international transport). Does your country apply reciprocity rules for reclaims submitted by non-established businesses? No. Are there any items that you cannot recover VAT on? There are certain items that you cannot recover VAT on. For example: Exempt supplies: where VAT relates to both taxable and exempt supplies, you need to make an apportionment (pro rata rule). Automobiles: amounts paid on the purchase, import, or rent (including leasing contracts) of automobiles can be claimed as tax credit only if the cost of acquisition, import or market price is equal or less than $ (VAT net). If the value exceeds that limit, the tax credit can be only claimed up to this limit. When the automobiles have for the buyer the character of inventory or a key operational fixed asset (such as cars) this limitation will not be applicable. The restriction to compute the tax credit related to maintenance, repair and use of automobiles, which can be deductible with no limit, was lifted. Business entertainment: VAT on services rendered by bars, restaurants, hotels, garages, clothes (except uniforms), is not recoverable. International Supplies of Goods and Services How are exports of goods and services treated? Exports of goods and services are included in the scope of VAT, but they are taxed at a zero rate. This means VAT is not levied on the output, but VAT paid on inputs may be recovered through tax refunds, which the taxpayer may request after shipping the goods. Goods supplied and services performed abroad are not subject to tax. How are goods dealt with on importation? When goods are imported into Argentina, import VAT and customs duties must be paid before the goods are released from customs control. How are services which are brought in from abroad treated for VAT purposes? Services rendered and loans granted from abroad for which utilization is made in Argentina (import of services) by Argentinean VAT payers in the country are taxable. In such cases, the local taxpayer must self-assess the VAT payment in the month immediately after the taxable event is completed, and will compute the VAT credit in the following month. This will be a pass-through cost for the local company so long as it is registered for local VAT purposes.

8 6 Argentina: Country VAT/GST Essentials Invoices What do I have to show on a tax invoice? Layout of invoices is strictly regulated. A taxpayer is required to issue an invoice for each taxable transaction performed. If this requirement is not complied with, the purchaser is not entitled to the VAT credit otherwise arising from the purchase. Transfers of Business Is there a relief from VAT for the sale of a business as a going concern? Under Argentine law, TOGC is not subject to VAT if it is done within the framework of a tax-free reorganization as provided by art. 77 of the Income Tax Law. Invoices and similar documents corresponding to transactions made by a registered taxpayer with another registered taxpayer must show separately the relevant VAT. Transactions made by a registered taxpayer with a final consumer or a small taxpayer must not show separately the corresponding VAT. Tax invoice should contain the following data: date of issue a sequential invoice number taxpayer identification number (CUIT) and customer taxpayer identification number supplier s name and address customer s name the quantity and nature of the goods/services supplied unit price (exclusive of any VAT) rate of any discounts (if not included in the unit price and if applicable) the VAT rate applicable the total amount price (including VAT); and issue authorization code or Electronic authorization code. Can I issue invoices electronically? Yes, It s mandatory for certain activities and optional for all. Is it possible to operate self-billing? Yes, in certain cases.

9 Argentina: Country VAT/GST Essentials 7 Options to Tax Are there any options to tax transactions? Individuals and companies engaged in small business activities and whose gross turnover does not exceed a certain threshold may be subject to a simplified regime (Monotributo) that combines income tax and VAT. Head Office and Branch Transactions How are transactions between head office and branch treated? There are no special rules for VAT, since both are considered as different taxpayers for VAT purposes.

10 8 Argentina: Country VAT/GST Essentials Bad Debt Am I able to claim relief for bad debts? No. Anti-Avoidance Is there a general anti-avoidance provision under VAT law? In the absence or an invoice or similar document or were the price is less than the market value, this market price is taken as the taxable base.

11 Argentina: Country VAT/GST Essentials 9 Penalty Regime What is the penalty and interest regime like? There are certain penalties for failing to fulfill formal obligations. The penalty for failing to pay VAT due varies between 50 percent and 100 percent of the unpaid VAT. In case of fraudulent practices, besides fines ranging from two to ten times the unpaid taxes, imprisonment can be imposed in certain cases. Compensatory interest is at present 3 percent rate.

12 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: Argentina Country VAT/GST Essentials Publication number: Publication date: January 2012