Argentina: Income Tax Law - List of low or null taxation jurisdictions

In brief

The Federal Tax Administration (FTA) published the list of low or null taxation jurisdictions (LNTJ). Keep in mind that the Income Tax Law sets forth adverse tax implications for LNTJs, for example, (i) transactions with LNTJs are not deemed arm's length for transfer pricing purposes, (ii) amounts due to LNTJs in consideration for transactions that trigger Argentine source income are deductible by the Argentine payor when the amounts are paid, (iii) transactions with LNTJs are required to be reported under the Tax Planning Information Regime, etc.

To have access to the list of LNTJs, click on the following link. The list of LNTJs published by the FTA is illustrative and not exhaustive and includes as LNTJs those that apply income tax rates lower than 15%, such as Ireland, several cantons of Switzerland and other jurisdictions.


Contents

In focus

The FTA published the list of LNTJs. To have access to the list of LNTJs, click on this link.

Keep in mind that Law 27,430 ("Law"), published on 29 December 2017, sets forth a new definition of LNTJs effective for fiscal years beginning on or after 1 January 2018, establishing adverse tax implications applicable to LNTJs.

For example, (i) transactions with LNTJs are not deemed arm's length for transfer pricing purposes, (ii) amounts due to LNTJs in consideration for transactions that trigger Argentine source income are deductible by the Argentine payor when the amounts are paid, (iii) transactions with LNTJs are required to be reported under the Tax Planning Information Regime, etc.

Afterward, on 27 December 2018, Decree No. 1170/2018 ("Decree") was published.

The Law set forth that the concept of LNTJs refers to jurisdictions where the income tax rate is 60% lower than the rate applicable in Argentina. The Decree established that the total rates of taxation should be taken into account in each jurisdiction for corporate income regardless of the levels of government that have established them.

Finally, Law No. 27,630, published in the Official Gazette on 16 June 2021, set forth that Argentine companies and permanent establishments of non-Argentine entities would pay income tax at the rates of 25%, 30%, or 35% depending on their accumulated net taxable income. With respect to LNTJs, it was established that the calculation of the above-mentioned 60% of the corporate income tax rate to be taken into account would be applied considering the rate of 25%. This means that LNTJs are those jurisdictions that apply an income tax rate lower than 15% (60% x 25% = 15%).

The list of LNTJs published by the FTA is illustrative and not exhaustive. Of the jurisdictions that are listed as LNTJs because they apply income tax rates lower than 15% are Ireland and the following cantons of Switzerland: Appenzell Ausserrhoden, Appenzell Innerrhoden, Basel-Stadt, Fribourg, Geneva, Glarus, Graubünden o Grisons, Lucerne, Neuchâtel, Nidwalden, Obwalden, Schaffhausen, Schwyz, St. Gallen, Thurgau, Uri, Vaud and Zug.

To access the Spanish version click here.


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