Argentine income tax on freight.

Argentine tax laws stipulate that 10 pct. of outward freight is presumed a profit from Argentina and taxed 35 pct., this results in a 3,5 pct. tax on the gross freight. Vessel's agents and/or argentine freight payers are responsible for collecting and depositing this tax at the local tax office. In order to avoid double taxation there are in force reciprocal agreements avoiding duplicated payment of this tax between Argentina and:

(* ex-Yugoslavia)
(1) Only covers air freight
(2) Only covers river transport

The agreement covers "the final freight beneficiary", residing in the above listed countries, irrespective of the vessels flag wherefore brazilian or dutch company can operate with liberian, panamanian or other flag vessels and still quality for exemption.

Every foreign owner or operator claming exemption is required to provide certified documentation from its country of residence, wherefore a tax affidavit must be produced and sent to us for filing with argentine tax authority (and also for presenting to the freight paying party to avoid that they deduct the 3,5 pct.). If the required documentation is not obtained the tax must be paid.

In short, the freight beneficiary has to prove that he is a tax payer in his country of residence, for this he has to:

1. Fill in and sign the form below and certify his signature by notary public.

2. Get it signed and stamped by the local tax authority and certify the signature by notary public.

In case a notary public is unavailable to certify the tax authorities signature, an alternative is the following:

A . If the tax authority signature is registered in the argentine consulate then the argentine consulate will certify it.

B . If A . is not applicable, then you have to find somebody whose signature is registered in the argentine consulate (I.E. foreign affairs ministry or local municipal authority) and that can certify that the signing tax authorities signatures is valid.

3. Get it certified by a notary public.

4. Get the notary's signature certified by the argentine consul (*).

(*) If the affidavit is produced in one of the following countries the certification by the argentine consulate can be avoided by having the notary public signature certification made out in accordance with the apostille procedure (the Hague convention):

It is possible to include all of your fleet under one document (own and/or chartered tonnage) and in such way cover all future possible calls to argentine ports. The tax affidavit is valid for 15 months, after said period of time a new one must be issued in case of a port call after the expiring date.

FYG, in the event that one of the vessels included in a valid tax affidavit already sent a local agent comes to Argentina, and is attended by another agent, a legalized copy can be handed over to the new agent, saving you the hassle of sending a new one.

Authentications and Apostilles.

Authentications are often called "legalizations", sometime "incumbencies" or "certifications", and apostille is a form o authentication appropriate to countries which have signed the 1961 Hague convention abolishing the requirement of legalization for foreign public documents. They are often needed in adoptions, extraditions and certain business transactions.

The most common defect that forces to turn away requests for these documents is the lack of a date on a notarization; please make certain that all notarizations are dated by the notary.

Authentications are most often part of a chain of proof that involves a number of cover documents. To simplify this, the Hague convention established a system that allows the state secretaries of state to be the last officials in the chain. The apostille for Hague convention countries is simply a special form of authentication.

(Sample)

(Paper with company's letter head)

Affidavit
Convention for the avoidance of double taxation in force between Argentina and - - - - - - - - - - (x country).

Annual Declaration

a) Beneficiary:- - - - - - - - - - (company name)

b) Address: - - - - - - - - - - (fiscal domicile)

c) Origin of income: - - - - - - - - - - (ocean freights)

As - - - - - - - - - - (owner or operator) of the following vessels assigned to the maritime traffic with the Argentine Republic:

f) The tax authority of the city of - - - - - - - - - - (city) confirms that the above beneficiary of income is a resident of - - - - - - - - - - (country) in accordance with the agreement to avoid double taxation between Argentina and - - - - - - - - - - (country), and that the statements made by the claimant are, to the best of the tax authority's knowledge, true and correct.

Date: - - - - - - - - - -

Signature: - - - - - - - - - -

Stamp of the fiscal office: - - - - - - - - - - (certification by notary public - certification by argentine consulate)