Whether you are interested in company formation in Argentina, or already doing business in Latin America’s third-largest market, your business will benefit from the support of a dependable local accountant. Because a high-quality service provided by a corporate accounting firm in Argentina will not only guarantee your compliance with regulations and good standing with authorities, but will also help you identify opportunities and inefficiencies in your accounting practices that could be converted into stronger profits.
With a gross domestic product (GDP) of $449,7 billion in 2019 (all figures in USD), Argentina has the third-largest economy in Latin America, behind Brazil and Mexico. Dominating the southern part of South America known as the “Southern Cone,” Argentina is also one of the main recipients of foreign direct investment (FDI) in the region, registering FDI inflows of $6.66 billion that same year.
The country boasts a large and well-established middle class, and has a highly-developed education system, with both factors contributing to Argentina being well-known for its services sector and having the highest English proficiency and literacy rate among non-English speaking countries in Latin America and the Caribbean.
The country is a part of the Southern Common Market (Mercosur) – an economic and political association that recently commemorated its 30th anniversary, and which also includes Brazil, Paraguay, and Uruguay, with Bolivia currently awaiting formal entry.
Argentina’s top exports include soybeans and related products, beef, corn, and motor vehicles.
If you are considering doing business or have already established a presence in this South American nation, read on to understand what you should expect from a good accounting firm in Argentina. Or go ahead and contact us now to discuss your business options.
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What to expect from an accounting firm in Argentina?
Your accounting firm in Argentina will guarantee compliance with local tax regulations and accounting requirements, eliminating the risk of non-compliance, which can be met with heavy fines from the country’s regulatory entities. Beyond that, when you contract the services of a high-quality firm, you can also count on expert advice intended to help you maximize your profits through the likes of tax planning, and modifications to your accounting or administrative practices.
Some of the complex corporate obligations an accounting firm can help you with include filing of financial records and calculation and submission of corporate tax returns. A good accounting firm will also be able to help you develop fiscal year business reports and will represent your company’s interests in case of information requests or audits from the Federal Administration of Public Revenues (AFIP).
Advantages of working with an accounting firm?
Some of the main advantages that your company can expect from a good accounting firm in Argentina include:
Expert accounting advice: With a team that can count on years of experience and deep knowledge of the local market, a good accounting firm in Argentina will help you make the right decisions to protect your commercial operations and guarantee the longevity of your business.
Latest accounting software: You will likely want to choose an accounting firm that uses the latest accounting software, not only to guarantee that your accounting records are managed in the most efficient way and in accordance with international standards, but also because such software will allow you to monitor the work they do remotely.
Reduced administrative burden: By contracting a good accounting firm in Argentina to administer your books and pay your taxes, you will eliminate a significant administrative burden from your own in-house team.
Improved bottom line: Working with an experienced accounting firm in Argentina that is able to identify opportunities to streamline and evolve your accounting practices will ultimately improve your profitability.
Main taxes in Argentina: an overview
Value Added Tax (VAT): Argentina has a standard VAT rate of 21%. However, users of telecommunications, domestic gas supply, water, and industrial energy are taxed at 27%. Note that the government applies a 10.5% VAT reduction on the purchase of certain goods, including meats, fruits, vegetables, agricultural services, passenger transport, certain medical services, books, and newspapers.
Corporation tax: The corporate tax rate for resident firms and Argentinian branches of foreign companies was reduced from 30% to 25% on January 1, 2020. However, an ongoing income reform project proposes a change in the corporate rate, extending the 30% rate for one more year.
Wealth tax: In December 2020, the Argentinian Senate passed a so-called ‘millionaire’s tax’ effectively meaning that residents with a personal fortune of approximately $2.4 million must pay a one-time tax of at least 2% of their total assets.
Property tax: Income from the rental of real estate located in Argentina is subject to an effective tax rate of 14.7%, based on the application of a rate of 24.5% applied to 60% of the gross income.
Social security tax: Social security tax generally varies between 19.5% and 19.8%. However, keep in mind that there are reduced rates for small- and medium-sized companies, based on activity, turnover, and number of employees.
Special taxes: These apply to certain products such as tobacco, alcohol, soft drinks, mobile phone services, gasoline, and lubricating oils. Your accounting firm in Argentina will be able to advise you based on the products you deal with, because each product has a different tax rate, which can range from 60% (tobacco) to 8% (soft drinks).
Taxes on foreign transactions: Argentina applies a tax on imported products in keeping with standards established by Mercosur. Known as the Common External Tariff (AEC), this is ranges from 0% to 20%, depending on the product.
Biz Latin Hub can be your accounting firm in Argentina
At Biz Latin Hub, our multilingual team of accounting & taxation specialists is able to help you navigate Argentina’s tax system, guaranteeing the good standing of your company before local authorities. With our complete portfolio of back-office solutions, including high-quality company formation, legal, and HR services, we are fully equipped to be your single point of contact for corporate support when establishing a commercial presence in Argentina, or any of the other 15 countries in Latin America and the Caribbean where we are present.
Contact us now for personalized assistance or a free quote.
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