Argentina: Proposal to revise corporate income tax rates, pending in Congress

A bill to revise the corporate income tax rates was passed by the Chamber of Deputies

A bill to revise the corporate income tax rates was passed by the Chamber of Deputies

The Chamber of Deputies on 19 May 2021 passed a bill to revise the corporate income tax rates.

The bill proposes a tiered structure of tax rates for different brackets of earnings—the lowest of which would be 25% and the highest would be 35%—as well as reflects a tax imposed on the distribution of dividends at a rate of 7%. The measures are proposed to be effective retroactively, for tax years beginning from 1 January 2021.

During consideration of the bill, the Chamber of Deputies approved an amendment to the tax brackets, establishing that the 35% rate would apply for corporate taxpayers with annual earnings above ARS 50 million (approximately U.S. $500,000). 

The following table summarizes the corporate income tax rate measures in the bill:

Annual taxable income (ARS)

Tax due on lower limit (ARS)

Marginal rate on the excess of the lower limit

0 to 5 million

ARS 0

25%

Over 5 million to 50 million

ARS 1.25 million

30%

Over 50 million

ARS 15 million

35%


Read text of the bill (Spanish)

The bill is not yet law. It is subject to consideration by the Senate.

KPMG observation

Tax professionals have noted that Law 27,430 (December 2017) established that for tax years beginning 1 January 2018 through 31 December 2019, the corporate income tax rate was set at 30% and the rate of tax imposed on dividend distributions was set at 7%. That law further provided that beginning 1 January 2020, the corporate income tax rate would be reduced to 25% whereas the tax rate imposed on dividend distributions was to increase to 13% (from 7%).

However, article 48 of Law 27,541 (December 2019) suspended this tax rate reform “until tax years beginning on 1 January 2021 inclusive” thereby extending the 30% and 7% tax rates. Read TaxNewsFlash

If the pending bill is ultimately passed by the Congress and enacted, then the provisions of Laws 27,430 and 27,541 would no longer be effective, for tax years beginning 1 January 2021.


For more information, contact a KPMG tax professional in Argentina:

Hernán Caire | +54(11) 43165737 | hcaire@kpmg.com.ar

 

 

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