The Law No. 27430 or comprehensive tax reform was published on December 29, 2017 in the Official Gazette and it generally applies from January 1, 2018. This comprehensive tax reform bill has sent to Congress on December 14, 2017. The Ministry of the Treasury has announced a comprehensive tax reform proposal on October 31, 2017.

The reforms are part of President, Mauricio Macri’s aim to make the Argentinian economy more competitive, and are designed to simplify the country’s complex tax system and bring it into line with global practices. This Law provides changes to corporate income tax, personal income tax, value added tax (VAT), social security contributions, excise tax, tax on fuels, criminal tax law, tax procedural law, and tax on the transfer of real estate. It also establishes a special regime comprising an optional revaluation of assets for income tax purposes.

This Bill was proposed a reduction in corporate tax rate from 35% to 30% for the next two fiscal years (i.e. for fiscal years starting January 1, 2018 to December 31, 2019), and to 25% for fiscal years starting 1 January 2020 and onward. A 7% dividend withholding tax rates was established for profits accrued during fiscal years starting January 1, 2018 to December 31, 2019, and 13% for profits accrued in fiscal years starting 1 January 2020 and onward.

The bill includes a new capital gains tax of 15% on profits from government bonds issued in foreign currency or indexed to inflation and 5% on local-currency, non-indexed bonds. The tax rates is supposed to be 8% for real estate properties and a 10% rate would apply to the revaluation of any other assets.

Drastic change of thin capitalization rules (currently 2:1 debt-to-equity ratio) migrating to a highest limit of 30% of the taxable income for interest and foreign exchange losses restricting from related-party debt of a financing nature from either a local or foreigner. Carry forward of: (i) exceeding non-deductible interest for five years; and (ii) non-used capability for three years may be available.

Change in controlled foreign corporation (CFC) rules with full attraction of passive income acquired directly and/or indirectly through a chain of controlled companies, given those companies are obtaining more than 50% of such a passive income and are subject to a tax less than the 75% of the Argentine income tax rate, among other conditions.

This Bill also contains changes in excise tax on automobiles. It also helps to speed up the VAT recovery regarding certain infrastructure and capital goods investments. Besides, social security taxes are expected to be reduced slowly.