A tax reform bill proposing significant changes to the income tax law regarding the taxation of dividends and capital gains was submitted to the Argentine Congress on 27 August 2013.
The Argentine House of Representatives approved the tax reform bill on 4 September 2013.
The reformed bill would include the taxation of the sale of quotas and other corporate contributions within the scope of the income tax. The bill would also include income gained from the sale of shares, titles, bonds and other securities within the scope of the income tax. These dealings would be subject to income tax at a 15% rate as from the entry into force of the reformed bill.
The amended bill would also enhance the gross presumed income applicable on the sale of shares, quotas and other corporate participations, titles, bonds and other securities for foreign beneficiaries from 50% to 90 which would indicate an effective tax rate of 13.5% on the total sale price.
According to the reformed bill, in case where the seller and the buyer are both foreign parties, the buyer will be entitled only for the payment of the tax to the Argentine tax authorities.
The reformed bill would introduce new 10% withholding tax on dividends which would apply to Argentine individuals, as well as to foreign shareholders. The amended bill would also incorporate the remittance of profits through branches within the scope of the dividend taxation.
