On 9 May 2019, Argentina has published General Resolution 4478/2019 in the official gazette amending the withholding tax rates on dividends. The new rules explain the following measures:
Retention Procedures
Generally, the withholding tax is applicable for the distribution of dividends and similar payments to either resident individuals and undivided estates, or non-resident recipients. The new rule explains that the management companies will be responsible for withholding the tax at the time of redemption and / or payment or distribution. When the beneficiaries of the dividends are residents of Argentina, withholdings must be reported according to the procedures, terms, and other conditions established for the System of Control of Withholdings (SICORE) regulated by general resolution N ° 2,233 and for foreign beneficiaries, their income will be made in the form, term and other conditions, foreseen for the Integral System of Electronic Retentions (SIRE) regulated by general resolution N ° 3,726.
Registration of the retention agent
The paying entities or dividends and similar profits must act as withholding agents. Withholding agents who are not yet registered as such will need to register.
Tax Rate
The applicable rate for periods starts as of 1 January 2018 and until 31 December 2019, is 7%. Meanwhile, to the extent the dividend paid during periods that start on or after 1 January 2020, the rate is 13%.
Effective Date
The general resolution came into effect as of 23 May 2019.
