All the provinces and the city of Buenos Aires apply this tax on the gross income earned by all companies engaged in commercial, industrial, agricultural, financial or professional activities.

This tax is levied on each commercial transaction and no fiscal credits are awarded for taxes paid during the preceding periods.

The rates depend on the industry and sector, ranging from 1.5% to 4%. The taxes are paid throughout the year with payments made monthly or every two months, varying from province to province. Some primary and industrial activities, however, enjoy certain exemptions.

The Stamp Tax is a provincial tax levied on the execution of notarized and private instruments embodying contracts and other transactions for valuable consideration. In general, the tax rate is 1%, although it may differ from one jurisdiction to another or vary based on the transaction. In the city of Buenos Aires, the general rate is also 1%. In spite of this, there are different tax rates: i.e.

Real property owners are required to pay an annual tax levied on their properties at the rate established by law depending on the tax valuation of the land, free of any improvements, and on the improvements to such land, if any.

Real Property Tax is applied to the value of the land and buildings without taking into account the taxpayer’s financial situation. The amount is set by the appropriate tax authority and is calculated according to the tax laws of each fiscal period which establish the valuation and rate scales to be applied to the taxable base depending on the type of property.

Municipalities collect fees for various services related to industrial safety, public hygiene and lighting, to name a few, calculated based on variables such as revenue or fixed parameters such as the number of employees or driving force capacity/horse power, among others.

The Employment Contract Law No. 20744 (LCT for its acronym in Spanish) establishes the framework for hiring employees.

Typical employment contracts in Argentina are non-fixed-term contracts, implying the work relationship may continue indefinitely until a specific cause makes it impossible to continue. Possible scenarios include an employee’s resignation, dismissal with or without cause decided by the employer, retirement (complying with legal requirements) or the employee’s death.

The law establishes a three-month trial period, before the end of which the employer must register the employment relationship. During these three months, both parties are subject to the rights and obligations inherent to an employment relationship, with the exception that the employer or employee may terminate the employment relationship without cause during this period and the employee is not owed any severance payment. The party seeking termination must give 15 days’ notice to the other party. A non-fixed-term contract generally contemplates a full-time commitment, which is to say eight hours per day, or a maximum of 48 hours per week, as established in the sector or in the company’s collective agreement.

However, the employer may require a worker’s services part-time for a specific number of hours per day or week or month, representing less than two thirds of the normal working day (as described in section 2 of the LCT). In this case, remuneration may not be less than the proportional amount which would correspond to a full-time employee established either by law or by collective agreement for the same category or job position. Part-time workers may not work overtime.

In a non-fixed-term contract, the employer may decide to terminate the relationship without giving any reason. After the trial period has ended, the employer must give an employee who has been with the company for less than five years a one month’s notice and two months’ notice if the employee has worked with the company for more than five years. The employer must pay the employee severance based on a month’s salary for each year of service, or fraction of a year over three months based on the employee’s highest regular monthly wage historically (section 245 of the LCT). Employees must give two weeks’ notice irrespective of years of service when terminating a work contract.

In order to provide an appropriate legal framework to suit the specific needs of both companies and employees, the LCT contemplates a number of different contract forms: the fixed-term contract (sections 90 and 93-95); seasonal/temporary work contracts (sections 96-98); the casual work contract (sections 99-100) and the crew or team work contract (section 101).

This form of contract has a fixed term which cannot exceed a five-year period. It may be used when duly justified, for example, to cover a non-permanent post within a company or the position of a worker on leave of absence.

The contract should be provided in writing and explicitly state its duration. The employer is obliged to give the worker due notice (via telegram or certified letter) of the contract’s termination with no less than one month and no more than two month’s notice, except when the contract’s duration is less than a month.

If an employer does not provide the worker with due notice of the termination of the contract 30 days before its expiry date or if the tasks to be performed do not merit a fixedterm contract, the law establishes that the fixed-term contract should be considered a nonfixed- term contract.

If the work relationship under a fixed-term contract after a period of at least one year comes to an end as foreseen by the term of the contractual agreement or the completion of the tasks and due notice has been given, the worker has the right to receive a severance payment. The amount to be paid is calculated as half of the sum provided for by section 245 of the LCT.

In the case of unfair dismissal before the end date of the contractual agreement, the worker has the right to receive the severance payment foreseen for non-fixed–term work contracts (section 245 of the LCT) in addition to damages suffered by the worker due to the breaking of the contract. In general, judges’ rulings award payment of a sum equivalent to the wages calculated from the date of termination up until the end of the contract’s original term. This payment replaces the one required when the corresponding notice period has not been given by the employer.

Section 96 of the LCT establishes that seasonal or temporary work contracts may be used for hiring workers to cover certain tasks corresponding to the company’s seasonal activity and whose very nature means that they are only required during certain times of the year and are repeated on a cyclical basis according to the type of activity involved.

This kind of contract covers the services provided by workers working in sectors such as tourism and agriculture, specifically in harvesting and other rural activities linked to fruit growing (citrus fruit, soft fruits, etc.). This latter activity is not included under the National Agricultural Working Regime (Law No. 26727).

A seasonal work contract is active and valid during the period of activity; outside the period specified in the contract, all obligations cease, meaning that the worker neither provides services nor receives payment from the employer. The law considers temporary work contracts to be non-fixed-term contracts which do not include a trial period.

If the worker carries out the tasks as required during one season, the worker has the right to be re-hired for thefollowing one. In order to make these rights effective, the employer must invite the worker to accept the job in writing at least 30 days before the start of the new season. The worker must accordingly issue written acceptance or make a physical appearance at the employer’s address within five days of being notified. If the employer does not extend the invitation, the worker may consider he/she has been unfairly dismissed and entitled a severance payment, equivalent to the time worked, plus damages suffered, particularly if the season is under way.

Severance payment is subject to section 245 of the LCT, not taking into account offseason periods. Severance for damages is calculated under the same terms as those used in situations of an unfair dismissal under a fixed-term contract.

Labor relations in the agricultural sector, excluding the tasks involved in fruit harvesting and/or packing, are governed by Law No. 26727, which provides for different types of contracts, and in the case of cyclic or seasonal services, the hiring of personnel must be specified in the framework of a non-fixed-term work contract, the regulations for which can be verified in said law.

A casual work contract is used for those tasks required by an employer that are not contemplated within the sphere of the company’s current activity. A causal work contract can be used for any number of tasks, from the refurbishing of an industrial establishment to the presentation of products at a corporate event. It is also appropriate for covering tasks which are usually undertaken within the company but have grown in volume or quality (for example, replacing a worker on leave or meeting higher work demands).

The employer may decide to hire the worker directly or through a Temporary Work Agency (ESE for itsacronym in Spanish) with the appropriate authorization provided by the Ministry of Labor, Employment and Social Security. These agencies specialize in providing their corporate customers with personnel services to cover the needs described above.

Should the employer decide to hire the workers directly, the contract should be drawn up in writing with copies for the worker and the union within the 30 days after its signing.

If the contract is for the temporary replacement of another worker, the salaried employee must be named in the contract; if the contract’s aim is to cover extraordinary working circumstances, they should be described in detail, outlining the reasons for the situation. A casual work contract may not be used to hire a worker in order to replace another that has abstained from work to exercise his/her legal right to strike, or if the employer has suspended or made redundant other workers as a result of a reduction in the number of tasks to be performed over the last six months.

As the term of these contracts cannot be defined beforehand because their duration is contingent on the task or activity to be performed, the work relationship begins and ends with the provision of the service or performance of the tasks.

However, in accordance with the provisions of National Employment Law No. 24013, if the contract has the purpose of meeting extraordinary market requirements, such cause may not last more than six months per year or more than one year every three years (section 72).

If these terms are exceeded, the contract is considered to be a non-fixed-term contract featuring the provision of services on an interrupted basis (seasonal or temporary work contract) or a non-fixed-term contract featuring the ongoing provision of services as appropriate.

The employer is not under any obligation to give the worker any type of severance payment when the contract finalizes upon the conclusion of the tasks, work or services contemplated. However, if before the contract’s term is complete, the worker is unfairly dismissed, the worker has the right to receive a severance payment as foreseen in section 245 of the LCT.

The legal system in Argentina contemplates a number of specific labor and non-labor contractual forms designed to encourage young people with no job experience to enter the labor market to work for companies and acquire necessary experience. These include internships and apprentice contracts.

Companies make employer contributions to cover the social security services of their employees. These contributions cover family allowances, medical services, pension plans and unemployment funds. The rates are 27% of the gross salary paid for employers whose main activity is the provision or lease of services, and 23% for other employers.

The first requirement for carrying out an export or import operation is to register with the National Registry of Importers and Exporters (Registro de importadores y exportadores). Registration is mandatory and is completed through the DGA. It is a one-time procedure and is valid for export and import operations.

The registration number allows traders to carry out operations at any customs office in the country. Both individuals and legal entities may register, and foreign trade procedures may be carried out by a custom broker.

The Customs Code defines exports as the withdrawal of goods from a national customs territory. Upon being withdrawn from a customs territory, the goods are assigned an ultimate end-use. This end-use may be definitive (for consumption purposes) or nondefinitive, which includes temporary exports and goods in transit.

The export of a specific product requires the exporter to be familiar with the customs procedures to be followed; the refunds established by the government for each product; and the current export duties applicable; among others. The basic information required to export from Argentina is outlined below.

When exporting, the first requirement involves identifying the tariff classification (“position”) in the MERCOSUR Common Nomenclature (NCM for its acronym in Spanish) of the product to be exported. This will indicate the applicable export refund, export duties, government incentives and the tariff and non-tariff barriers in destination countries.

It is also necessary to establish the ultimate end-use of the goods to be exported. Normally, they are intended for consumption. In order to assign an ultimate end-use to the goods, the exporter must fill out an end-use application, usually denominated shipment permit. The document must be completed and entered in SIM, the information system connecting all customs offices, customs agents and public booths.

The shipment permit must be accompanied by an assessment form, which is an affidavit detailing the characteristics of the operation and any elements that may affect the compositions of the goods value for customs purposes. The purpose is to define the taxable base used to levy export duties, establish an exchange rate and apply export refunds, if any.

If the results of the control are positive, Customs will record the ultimate end-use and the information system will automatically determine the type of control applicable to the goods to be exported. This is known as the “selection channel.”

There are three export channels:

- Green Channel: there is no control of the documentation or physical control of the goods by Customs.

- Orange Channel: the documentation must be reviewed by Customs.

- Red Channel: there is control documentation and physical control of the goods by Customs.

By presenting the end-use application form and the documentation required for the operation, the legal and regulatory conditions are considered to be met and thus the goods may be released. This means that they may leave the national customs territory by air, land or sea. The release is conditional on the payment or the relevant duties.

Resolution 13/2002 of the Ministry of Economy and Public Finances, as amended and regulated, establishes that exporters must deposit the proceeds from their export operations with the local financial system, depending on the product. The proceeds must be deposited in a checking or savings account in Argentine pesos opened with a financial institution.

The Central Bank of Argentina governs the operations of the exchange market and regulates the entry of currency for exporters and the payment of imports that require banking intervention, according to the abovementioned resolution.

MERCOSUR members established a Common External Tariff to be applied to imports throughout their territories replacing tariffs set by each member country for third-party countries.

CET levels range from 0% to 35%, which is the WTO’s consolidated rate for MERCOSUR countries.

As a general principle, products with greater added value have a higher CET, although other aspects are taken into account in order to define tariffs, such as the possibility of establishing regional supply sources. There are exceptions to the CET where member countries may set differential rates for certain products.

Statistics Tax is an ad valorem tax of 0.5%—up to US$ 500—applied to the customs valuation of merchandise. There are some exceptions to the payment of this rate: for instance, merchandise from the member states of MERCOSUR as well as new and unused merchandise included in the tariff lines capital goods and IT and telecommunications, among others (Decree 690/02).

Verification of destination tax (Tasa de Comprobación de Destino) is applied in those cases where customs provides on-site control to check compliance with the obligations conditioning the tariff benefits granted to a given product are met. This is an ad valorem tax which may not exceed 2% of the value of the merchandise. The tax base used to settle the verification of destination tax is the one on which import duties are applied.

The AFIP adopted a general resolution providing for a single fixed tariff of US$ 10 to be paid for each detailed end-use and/or operation for import documented using MARIA. The cost of this operation is to be paid for by the user.

Other aspects

There are numerous incentive regimes designed to promote the import of capital goods, the temporary import of capital goods and the import of used production lines, whose principal objective is to encourage the incorporation and use of machinery and new technology in the country’s productive industries.