Argentina may impose tax on capital gains and dividends

September 2013

Overview

The Argentine government has sent to the Congress a draft bill that creates a 15% tax on capital gains arising from the transfer of unlisted stock and quotas. The bill also includes a 10% tax on dividend distributions.

The same bill repeals the current exemption available for foreign beneficiaries on income derived from Argentine share transfers. Thus, foreign beneficiaries would become subject to a 13.5% effective income tax withholding rate on gross proceeds or, alternatively, a 15% income tax on the actual capital gain if the seller’s tax cost basis can be duly documented for Argentine tax purposes.

Both Income Tax law amendments seek to mitigate an expected decrease in tax revenues due to an announced income tax cut for workers. The announced cut already has the approval of Congress’s Lower House.

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