Business Insider- Argentina Has The Highest Corporate Taxes

[Ceviche]

http://www.businessinsider.com/wef-19-countries-with-the-highest-tax-rates-in-the-world-2015-10

 

[garryl]

In Argentina and China business owners do not pay tax according to the book.

 

[sebas]

Here is the quote from the "article":

1. Argentina: 137.3%. Astonishingly, Argentina's total tax rate is judged to be over 100% of corporate profits. The country's turnover tax alone eats up nearly 90%, before taxes on salaries and financial transactions are taken into account.

I always thought this was some kind of urban myth spread by business owners in argentina, does anyone have any kind of breakdown of this figure, with examples that relate to a typical business with a few employees, I'd be really interested.

Cheers

 

[Fangar]

When taxes are too high and complicated to pay, people don't.

 

[Bajo_cero2]

This is naive. You deduct sales tax and the expenditures from income tax. The article doesn't take this into consideration.
I remember that 2 years ago i had to pay about 750.000 pesos on income tax (55% tax before deductions). At the end i paid 125.000 without cheating the system.

 

[Bajo_cero2]

duplicated post.

 

[ElQueso]

From the article, a summary of the taxes included in their calculations:

The total amount of taxes is the sum of five different types of taxes and contributions payable after accounting for deductions and exemptions: profit or corporate income tax, social contributions and labor taxes paid by the employer, property taxes, turnover taxes, and other small taxes.

Sorry Bajo, but deductions and exemptions that can be included are indeed figured into the equation the calculation used.

Argentina wasn't being singled out - bad business environments were. It just happens that Argentina is certainly one of the least friendly-to-business environments there are, and certainly was far at the bottom of the others in the list we're talking about. No excuses or caveats along the lines of "the calculation wasn't fair to Argentina" that I can see.

Argentina was a difficult place to do business when I came here more than 9 years ago. It certainly hasn't gotten any better, and I really doubt that it's just stayed where it was all that time. I wouldn't know from direct experience because I gave up trying to do business here a few years ago because it was so expensive and difficult. And I know I'm not the only foreign business person who believes that, who's had experience in other places and can see the forest and the trees at the same time.

 

[Bajo_cero2]

Right! 137%? 90%?
Not realistic. B....t.

 

[el_expatriado]

Right! 137%? 90%?
Not realistic. B....t.

Here's a real world example to illustrate the crazy world argentine business lives in. Let's suppose I have a services company with a branch in San Francisco and a branch in Buenos Aires. Each branch has 1 employee who works from their house, so there are no other expenses, just this employee and taxes.

Like Bajo_Cero, I'm a Peronist, so for my example, I want to use the 50/50 model. Half the earnings for me and half the earnings for the worker. So in my company, I want to earn a minimum of $50,000 for me and $50,000 for the worker. In a world with no taxes, I'd need to charge my customers $100,000 for to be able to do this.

So, let's have a look in the USA vs Argentina to see how much I need to charge my customers in order to pay out $50,000 to the worker and $50,000 to myself.

In the USA, I need to charge $147k in order to reach my goal. So, that's $47k in taxes, also 47% total taxes. In Argentina I need to charge $234k to pay out $100k total. That's $134k in taxes (and 134%). So there you go. That's a real world example of how taxes work here.

As you can see, 90% is on the low side.

 

[glasgowjohn]

One of my friends in the retail business , present in 17 countries in the Americas mentioned some time ago that group employees based in Buenos Aires cost the company about 30% more than in New York . He was including salaries and all social costs.