Argentina
The country profile includes data on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by the employers. Results reported include the average and marginal tax burdens for eight different family types.
It also describes the personal income tax systems, all compulsory social security contribution schemes and universal cash transfers as well as recent changes in the tax/benefit system.
The national currency is the Argentinian Peso (ARS). In 2013, the average exchange rate was ARS 5.50 to USD 1. In that year, the average worker earned ARS 116 352.
The Report includes estimates of the tax wedge over the whole of the income distribution ordered by deciles of total labour income of formal wage earners derived from the household surveys.
1. Personal income tax system
The fiscal year is the calendar year.
1.1. Central government income tax
The income tax law in Argentina recognises several types of income. The first category taxes income and gains obtained from estates and land; the second category applies to investment income and other capital gains; the third category encompasses profits from enterprises and certain trade activities; the fourth category taxes wages from personal work. The latter encompasses all wages, income or compensation from employment; pensions or compensation from previous employment; and any other form of compensation received in exchange for professional services.
Exempt income:
The most noteworthy types of exempt income include:
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Interest paid on deposits by financial institutions subject to the legal financial scheme including savings, special savings accounts, fixed term savings and other forms of deposits as determined by the Central Bank of Argentina.
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Severance payments or payments made with respect to accidents or illness.
1.1.1. Tax unit
Members of the family are taxed separately.
The personal income tax applies to all residents levied on their worldwide income. Non-residents are taxed on Argentine-source income only. A legal resident for tax purposes includes persons who are natives of Argentina, those who have become naturalised citizens and foreigners who have either been granted a residence permit or who remain in the country with authorisation to work for a period of 12 years or more.
1.1.2. Tax allowances and tax credits
1.1.2.1. Standard tax allowances and tax credits
The decree 1234/2013, that institutes counter-cyclical measures aimed at strengthening the purchasing power of workers and their families, established standard allowances that varied according to three levels of monthly earnings.
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For workers earning up to ARS 15 000 per month, the special deduction for employment was increased by the amount of the difference between the taxable income and the sum of the basic allowance and the deductions for spouse and children. This meant that the taxable income is always exhausted and the tax liability zero.
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For taxpayers earning up to ARS 25 000 per month, allowances are as follows:
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ARS 16 157 in respect of a basic allowance.
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ARS 17 952 in respect of the spouse.
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ARS 8 976 for each child or stepchild aged less than 24 or unable to work.
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ARS 77 553 for the taxpayer when income relates to employment (fourth category).
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Social security contributions paid.
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For taxpayers earning above ARS 25 000 per month, allowances are as follows:
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ARS 15 120 in respect of a basic allowance.
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ARS 16 800 in respect of the spouse.
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ARS 8 400 for each child or stepchild aged less than 24 or unable to work.
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ARS 72 576 for the taxpayer when income relates to employment (fourth category).
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Social security contributions paid.
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1.1.2.2. Main non-standard tax allowances and tax credits
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Life assurance premiums.
1.1.3. Tax schedule
The annual income tax liability is calculated on the taxable income according to the following schedule in 2013:
1.2. State and local taxes
No state or local taxes are levied on wages.
2. Compulsory social security contribution to schemes operated within the government sector
2.1. Employee contributions
The employee contributions are levied on gross wages. The lower threshold of earnings was ARS 9 272.00 per year (ARS 772.67 per month) with a ceiling of ARS 301 343.00 per year (ARS 25 111.92 per month) in 2013.
2.1. Employer contributions
Employers are required to pay either 17% or 21% of the payroll in social security contributions (depending on the company activities), excluding the component of the Social Work (Obra social). The 17% rate is adopted in this Report as more than 60% of employers pay at this rate. Within this frame, employers are required to contribute to the public programs as follows:
The lower threshold for the employer social security contributions is ARS 9 272 per year (ARS 772.67 per month) in 2013. There is no upper threshold.
3. Universal cash transfer
3.1. Amount for spouse and for dependent children
4. Main changes in tax/benefits since 2013
The monthly ceiling for social security contributions paid by employees was increased to ARG 56 057 since March 2016.
5. Memorandum items
5.1. Identification of an AW
The data refer to the earnings of workers within the formal sector. The average worker’s wage was calculated using microdata from the national household surveys.