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Argentina: Developments expected on payment mechanism of non-resident capital gains tax

02 October 2017

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Ignacio Rodríguez

Since September 23 2013, capital gains derived from the transfer of shares in an Argentine company, as well as other securities obtained by non-residents, have been subject to Argentine tax.

The seller has the option – to be expressly notified to the withholding agent – of determining its tax liability by applying the 15% rate on the actual capital gain realised, duly supported, determined in Argentine currency or on a presumed basis consisting of 90% of the sales proceeds (13.5% effective rate).

So far, however, no tax had to be paid on transactions between non-residents because the Argentine tax rules did not establish a mechanism to withhold and remit that tax.

On July 18 2017, through General Resolution 4094-E, the Argentine tax authorities established the long-awaited mechanism to withhold and pay the tax due on transactions involving the transfer of Argentine securities, such as shares and equity interests in local mutual funds.

The seller's stock broker must act as the withholding tax agent if the shares are sold through a stock exchange that is authorised by the Argentine Securities Exchange Commission (CNV). If the sale does not take place through a stock exchange, then the buyer must act as the withholding tax agent, even if they are a non-resident. Neither the Income Tax Law nor the General Resolution specify the withholding tax mechanism in cases where Argentine shares are sold through a foreign stock exchange. In these situations it is uncertain whether the seller's broker or the buyer should withhold the tax.

If the buyer is a non-resident, or the transaction takes place in a foreign stock exchange, the relevant party must remit the tax to the tax authorities through an international bank wire transfer considering the information needed to prepare the respective order and the list of authorised collecting agencies on the tax authority's website ( The tax payment will be rejected if the withholding tax agent fails to provide certain information, such as the tax ID of the entity whose shares have been transferred or if the transfer is made locally.

Also, whoever is required to register the share transfer with the corporate authorities is required to provide to the tax authorities the notification of the transfer, the buyer's and seller's identities, and a copy of the withholding tax payment voucher.

Resolution 4094-E, which entered into force on July 18 2017, applies to transactions concluded on or after September 23 2013. For sales of securities concluded prior to July 18 2017, the due date to remit the tax withheld was September 29 2017.

Not surprisingly, the tax authorities received many complaints due to the retroactive effective date and the need for those who are liable to update their systems. In response, on July 20 2017, the Argentine tax authorities issued General Resolution No. 4095-E suspending the application of General Resolution 4094-E for 180 days.

It may be expected that during the suspension period the Argentine tax authorities will clarify certain open questions with regard to General Resolution No. 4094-E.

Ignacio Rodríguez (, Buenos Aires
Tel: +54 11 4850 6714

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