Christine Lagarde, the managing director of the International Monetary Fund (IMF), admitted that the institution had underestimated the complexity of current Argentina’s economic situation. That’s make invoicing in Argentina a little tricky, as you can find a lot of document types such as ‘Factura A’, ‘Factura B’, etc. But, how can LatamReady give the right solution when it comes to Tax Compliance in Argentina?
If any company receives a bill from a supplier, instead of paying 100% of the bill to the supplier they will pay to the supplier a certain amount of money such 80% of the money and the rest of the bill will be paid by the local bank. What the local bank would do is to generate a Withholding Tax and Withholding Tax Certificate to the supplier and will generate tax that must be paid by the company. Adding tax regulations was the way the local government found to collect money from these companies.
Value Added Tax (VAT) in Argentina
Regarding the Value Added Tax, known in Spanish as Impuesto al Valor Agregado or IVA, we use a standard feature, the standard tax code that NetSuite would suggest in your implementation, it offers tax and withholding tax solution called ‘LatamTax’. This feature, as a technical platform, will produce all the specific XML files that are required for the local government.
Retención (Withholding Tax), is a common type of withholding tax in Latin America. In the case of Argentina, you can have more than one type of Retención, such as:
- Retención de Ganancias (Profit Withholding)
- Retención de Impuestos Brutos (Withholding of Gross Taxes)
- Retención de IVA (Withholding VAT)
Before sending this information to the tax agency, the company needs to classify the invoice transaction properly in order to send it to the local government. LatamReady has developed the perfect XML setting all the combinations that are required for the Argentinian government.
LatamReady SuiteApp is the best option to modify NetSuite and facilitate your process to be compliant with regulatory requirements in Latin America.
For more information visit: www.latamready.info
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