Brief summary of tax system in Argentina, prepared by Fidem Partners. www.fidem.com.ar

1. ArgentinaTaxSystem - Briefsummary-

4. Non-resident individuals or legal entities without a permanent establishment in Argentina are taxed only on income from Argentine sources.

5. Loss Carryforward:Losses incurred during any fiscal year may be carried forward and set off against taxable income obtained during the following five fiscal years.

6. Tax rate:(35%). Distribution of dividends to shareholders in SAs, or the distribution of income to partners in SRLs and remittances of profits abroad by branches or establishments are in general not subject to tax in Argentina.

7. The ITL provides for a 35% withholding tax to be applicable to the amount of dividends and earnings distributed in excess of a company’s net taxable income. (equalization tax).

9. Any income or gain, obtained by a non-resident individual or a foreign legal entity without a permanent establishment in Argentina, is subject to withholding tax.

10. Technical assistance agreements, engineering or consulting services that the authorities consider unavailable in Argentina with contract registered in compliance with the Transfer of Technology Law: 21% (grossing up 26.58%);

11. Contracts registered in compliance with the Transfer of Technology Law and not included among those mentioned above: 28% (grossing up 38.89%);

12. Copyright royalties paid according the requirements of the Copyright Law: 12.25% (grossing up 13.96%);

13. Interest on loans obtained abroad: 35% (grossing up 53.85%),

14. Payments to non-residents working period not exceeding six months: 24.5% (grossing up 32.45%);

15. Rental payments on moveable property: 14% (grossing up 16.28%);

16. Rental payments on real estate: 21% (grossing up 26.58%);

17. Proceeds from the sale of any type of property: 17.5% (grossing up 21.21%); and

19. Australia; Belgium; Bolivia; Brazil; Canada; Chile; Denmark; Finland; France; Germany; Italy; Mexico; Norway; Spain; Sweden; Switzerland; Netherlands; Russia; United Kingdom;

20. These treaties are based upon the OECD model and particularly seek to avoid double taxation.

22. Applies if the total value of the assets exceeds ARS 200,000 at the end of the entity’s financial year. In this case, the total value of the assets will be taxed at the rate of 1%.

24. Applies to the sale of goods, the provision of services and the importation of goods.

25. Under certain circumstances, services rendered outside Argentina which are effectively used or exploited in Argentina, are subject to VAT.

26. The tax is levied on the difference between the so-called "tax debit" and the "tax credit“.

27. The difference between the "tax debit" and the “tax credit", if it is positive, constitutes the amount to be paid to the Tax Authority.

29. Each of the provinces apply different tax rates;

30. Common rates:

31. 1% rate on agricultural, cattle breeding and mining activities, 1.5% on industrial activities, 3% on trade or services in general, and 5.5% on financial activities

32. The tax is levied on the amount of gross income resulting from business activities carried on within the respective provincial jurisdictions.

34. Definition of “effects” varies in the different local tax codes. However, most codes include within the definition acceptance, protest, negotiation of the agreement, performance and the institution of enforcement proceedings for compliance.

36. Individuals not residing in Argentina are only liable for this tax upon their assets located in Argentina.

37. Shares, negotiable obligations and other securities are only deemed to be located in Argentina when issued by an entity domiciled in Argentina.

39. Rate is 0.5%.

41. Levied upon debits and credits in bank accounts and other transactions similar or could be used in substitution for a checking account.

42. Transfers and deliveries of funds also fall within the scope of this tax.

43. Not apply to debits and credits relating to salaries, to retirement and pension emoluments credited directly by banking means and withdrawals made in connection with such credits, to credits in checking accounts originating from bank loans, and to transfers of cheques by endorsement.

44. General rate of the tax is 0.6%. An increased rate of 1.2% applies in cases in which there has been a substitution for the use of a checking account.

45. Owners of bank accounts subject to the general rate of the tax of 0.6% may consider 34% of the tax paid upon credits to such bank accounts as a tax credit.

47. Special reports, containing detailed information including data and supporting documentation, must be submitted in order to establish that the terms of the transaction are equivalent to an arm’s length transaction (“arm’s length compliance”)