All profits of local companies are taxable, including any kind of capital gain such as those from sales of depreciable assets, shares and real property.An Argentine company is allowed to deduct from gross revenue the expenses incurred in producing taxable income, including a percentage of royalties, technical assistance fees with some restrictions and interest payable to beneficiaries abroad, regardless of whether these are economically related to the paying entity. Some restrictions apply related to transfer prices, the thin capitalization rule, deductibility of interest depending on whether they are paid before the annual tax return is filed, etc.Income tax at a 35% rate on amounts paid to non-residents (e.g. interest, technical assistance fees, royalties, etc.) is applied to deemed net Argentine source income. The deemed net Argentine source amount may vary depending on the nature of the payment.In addition to income tax, the federal government imposes value-added tax, excise taxes, tax on assets, tax on presumed minimum income, tax on interests and custom duties.OTHER BENEFITSTrained Labor ForceThe Argentine labor force is about 14 million people (37% of the total population). The unemployment level is about 15% in 2000. Argentina offers a well-trained labor force and especially an important pool of well-motivated and reliable people for managerial positions. Labor costs are higher in Argentina as compared to other Latin American countries.Availability of FinanceThere is no availability of soft financing for foreign investors (or for anybody else). As regards loans in local currency, years of very high inflation have played havoc with the Argentine financial system, for which reason the monetization of the economy is still comparatively low, even when steady progress is being made in this field. Banks normally do not offer local currency loans, except for relatively short terms (roll over up to 180 days) and at rather high rates.L...
