1. ARGENTINA

2. 1 Speaker Name: Alberto Adaminas Title: Tax partner CompanyElizalde Casares & Asociados Mobile:+ 54 11 3095 4409 Office:+ 54 11 4375 1250 E-mail:aadaminas@ecya.com.ar

3. 2 Case study US company (consumer business) is doing business in Argentina The ultimate owner of the US company is an US individual The Argentinian business operations create a net result of US$ 7 mio and after deduction of an at arm’s length US license fee for the use of the brand name (US$ 2 mio) a profit before tax remains of US$ 5 mio. The US company can set-up a (1) corporation or a (2) limited partnership in Argentina What are the tax consequences? What opportunities exist to mitigate the tax due?

4. OR - License fee - Dividend 3 Introduction: application of tax treaty Arg/US The Tax treaty between Argentina and USA is not in force because have not been approved by law. From several years maintain this status so there no expectation that could be in force in the near future. US company Corp US individual US Arg LLP

5. 5% 100% 95% - License fee - Dividend 100% 4 Re 1&2: Tax consequences partnership or corporation (subject to tax in Arg in the same way) Corporate income tax (CIT) due in Arg: Net resultUS$ 7,000,000 License feeUS$ 2,000,000 – Profit before taxUS$ 5,000,000 Arg CIT (35%)US$ 1,750,000 – Profit after taxUS$ 3,250,000 Withholding tax (WHT) on license fee: WHT 31,5% Dividend withholding tax (DWT) on dividend: No WHT is levied by Arg for the two dividends because the amount of profit that have pay CIT in Arg. If not the WHT is 35%. US Company LLP or Corp US individual US Arg US LLC

6. 95% 100% 5% - License fee - Dividend 100% 5 Tax opportunity 1 Corporate income tax (CIT) due in Arg: Net resultUS$ 7,000,000 License feeUS$ 2,000,000 – Profit before taxUS$ 5,000,000 Arg CIT (35%)US$ 1,750,000 – Profit after taxUS$ 3,250,000 Withholding tax (WHT) on license fee: WHT 10%, 15% or 18% See next slide Dividend withholding tax (DWT) on dividend: No WHT is levied by Arg for the two dividends because the amount of profit that have pay CIT in Arg. If not the WHT is 35%. Company in country with Tax Treaty LLP or Corp US individual US Arg US LLC

7. 6 Tax Treaty with Argentina COUNTRYWHT The Netherlands10/15% U.K.15% France10% Italy18% Canada10/15% Sweden10/15% Finland10/15% Norway10/15% Belgium10/15% Denmark10/15% Australia10/15% Russia15%

8. 7 Tax opportunity 2: transfer pricing  Reduce functions and risks of the Argentinian business as much as possible;  Determine the required tax result through a benchmark analysis;  In case of a sales entity the profit can be commission based (a percentage of sales);  The excess income can be transferred to a related low taxed group entity (eg. In the case of Panama 0%). Advance tax ruling (APA): It is no possible to agree on that in Argentina