In the case of corporate income, any net worth betterment is treated as taxable income, regardless of their regularity, eventuality or reason.
Following the latest tax reform in Argentina (Act No. 27430 from December 2017), the corporate income tax has been reduced to 25%. However, this reduction has been implemented in two phases: for fiscal years commenced on January 1, 2018, a 30% rate is applicable (before it was 35%) while for fiscal years commencing on January 1, 2020, the applicable rate is 25%. To offset the effects of this reduction, a withholding is established on dividend payouts at a rate of 7% in the case of profits earned for fiscal years beginning on or after January 1, 2018, and 13% on profits earned in fiscal years beginning on or after January 1, 2020. However, dividends paid out by an Argentine company to another company in the country are not liable to such withholding tax, irrespective of the fiscal year when such earnings have been generated.
In the case of residents in the country, there is no differential treatment for foreign or national capital. In general, companies organized in Argentina are deemed to be resident, regardless of where the capital is sourced. Furthermore, permanent establishments or branches that carry out their activities in the country and belong to foreign companies or persons are considered to be resident in the country.
In general, the companies may deduct all expenses necessary to obtain, maintain and preserve taxable income. However, some limitations are established for the deduction of the following expenses:
a) Representation expenses: up to 1.5% of salaries paid in the fiscal year.
b) Fees paid to members of the Board and statutory auditors: up to 25% of income for the year or ARS 12,500 per beneficiary, whichever is higher.
c) Fees and salaries of managers acting abroad: up to 12.5% of income (it is reduced to 2.5% if no dividends are paid out).