How can an Umbrella Company Help with Contracting in Argentina?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Argentina. Even better, most are experts in Argentina and expat tax law, meaning they’ll also help you optimise your earnings in Argentina.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Argentina.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Argentina, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Argentina and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Argentina
One of the most consistently challenging aspects of contracting in Argentina is complying with the country’s tax system. As well as paying tax in Argentina, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Argentina
If you’re working in Argentina under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Argentina for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Argentina, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Argentina through PAYE is left with the prospect of doing everything themselves.
Do you know much about Argentine Tax Law? Does Argentina have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Argentina can range from 5 to 35 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Argentina
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How to File Taxes in Argentina as a Contractor
Individuals whose income is only from employment, and less than ARS 1,000,000, are not required to file individual PIT returns since the tax is duly withheld at source by the employer.
The steps to file taxes in Argentina involve:
Step 1: Register for your DNI (Documento Nacional de Identidad) with the Registro Nacional de las Personas that has jurisdiction over the area you live in. This will take around 1 month to arrive in the mail. A list of offices can be found here(link is external). Documents to bring include:
- Original Birth Certificate, legalised by the Argentinean Consul in your country of Origin.
- Certificate of residence issued by the National Directorate of Migration
- A document stating your personal address
Step 2: Use your DNI and residence permit to apply for your Clave Unica de Identificación Loboral (CUIL) which is required by employers for the purpose of registering you legally for work.
Step 3: Apply for your unique tax identification number (CUIT – Clave Unica de Identification Tributaria) at your nearest Administración Federal de Ingresos Públicos (AFIP). Fill out the ‘160/F’ form and provide your DNI.
Step 4: Login to the electronic filing system on the AFIP(link is external) website using your CUIL/CUIT number. Using the SiRADIG web service, file form 572 to provide your employer information on all of your personal deductions. This must be done prior to 31 March of the year following the tax year. Personal deductions include:
- Charitable contributions
- Pension and social security contributions
- Life insurance and funeral expenses
- Rental expenses
- Medical care contributions
Step 5: Collect an annual wage tax return which reports the annual compensation, deductions and withholdings for each fiscal year from your employer.
Step 6: File your income tax return on AFIP(link is external) by entering all sources of income, applicable deductions and personal tax allowances. Submit the tax return.
Step 7: Pay out any taxes due. The due date for tax payments is the day following the tax return filing due date which depends on your individual tax ID, CUIT. This is usually July 1. Interest is imposed for late payments (3% monthly), plus fines ranging from 50% to 100% of any taxes omitted.
Tax Figures in Argentina
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The above progressive tax rates are applicable to Argentine residents.
Non-residents residing temporarily in Argentina (for 6 months or less) are allowed a standard deduction of 30% of compensation for expenses incurred in earning income. The remaining 70% is taxed at a flat rate of 35% with no other allowable deductions. This results in an effective final withholding rate of 24.5%.
Tax Residency in Argentina
When do you become a tax resident in Argentina
You become a tax resident in Argentina when:
You become a tax resident in Argentine if you fall under one of the following categories:
- Native and naturalized Argentine citizens.
- Foreign individuals who are granted permanent residence in Argentina.
- Foreign individuals who remain in the country under temporary authorisation for a period of 12 months or more.
Note: individuals that fall under category 3 may be deemed to be a non-resident if they can prove that they do not intend to stay permanently in Argentina.
Does the 183 day rule apply in Argentina
No, the 183 day rule does not apply in Argentina.
Am I taxed on my global income in Argentina
Yes, if you are a resident.
Non-residents are taxed on Argentine-source income only.
Can you set up your own Limited Company in Argentina?
|How long does it take to set up
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|Starting a Business Rank: 157 (Source: World Bank)
Tax Calculator in Argentina
If you are a contractor and want a calculation on your tax and net retention in Argentina, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Argentina
Contractors in Argentina are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. An Argentine umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Argentine taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Argentine tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Argentina
We work with numerous umbrella companies in Argentina, many of whom are experts in tax and immigration laws. If you have any questions about tax in Argentina, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Argentine work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Argentina but without the overhead of directly dealing with the Argentine tax authorities. Get in touch with us today for some reliable advice on tax in Argentina!
A Contractor’s Guide to Work Permits in Argentina
Immigration is one of the primary concerns for any contractor hoping to start working in Argentina. Permanent employees will find it easy to get their Argentine work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Argentine work permit, known more commonly as the Category 23A Visa, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Argentina is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Argentina (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Argentina. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Argentina and match contractors with the right company for them. If you’ve already secured a contract in Argentina, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).