Report Topics:
1:- General Information
2:- Cooling-off Period
3:- Pyramid Schemes
4:- Multi-Level Marketing
5:- Prohibition on Products
6:- Credit Restrictions Country
7:- Money Collections
8:- Licenses
9:- Status of Direct Sellers
10:- Earnings Claims
11:- Taxes and Fees
12:- Social Security
13:- Others
General Information
No information.
Cooling-off Period
As for the Consumers Protection Law (24.240) under the 34th article, the cooling off period is 10 days after the delivery of the product.
Pyramid Schemes
No legislation.
Multi-Level Marketing
No legislation.
Prohibition on Products
No exclusive legislation for direct selling prohibiting sale of products or services. Certain regulated industries (e.g., wine and spirits, securities, insurance) have requirements across the board but do not discriminate against direct sellers per se.
However all dietary supplement (industry including) affected by following regulations: Any dietary supplement containing herbs must have each herb approved by the MOH (Ministry of Health) and published in the Argentine Codex prior to get the registry.
All dietary supplements must contain at least 20% RDA (Recommended Daily Allowance).
Products already registered in the past (as of 1998) had to be re-submitted in order to fulfill these requirements
It´s advisable to get in contact with ALANUR to get information about this particular topic (https://alanurla.org/). Most of the DS companies are members of this alliance.
Credit Restrictions Country
No legislation.
Money Collections
No legislation.
Licenses
There are no registration/licensing requirements for direct sellers.
Status of Direct Sellers
No National legislation. Several jurisprudence applicable to individual D.S. companies, in litigations from both Social Security Agencies and Direct Sellers (claiming for employee status), are stating independent status.
However, the relationship between companies and direct sellers needs to be carefully structured in order to ensure that direct sellers:
- do not act under orders from a company,
- have the freedom to select merchandise to be sold,
- accept their own business risk.
Earnings Claims
No legislation.
Earnings Claims
No legislation.
Taxes and Fees
FEDERAL TAXES:
Corporate Income Tax :
Corporations: S.A. (Inc.) or S.R.L. (limited liability) are levied with 35% income tax, payable the AFIP (Public Income’s Federal Administration) in which its head office is located. Dividends paid to shareholders, whether local or foreign, are not taxable. Withholding income tax applicable to royalties is 26.582% (technical services and royalties do not need approval, just registration), withholding on interests paid on loans from abroad (35%).
Value Added Tax. (V.A.T.)
Levied on all sales of goods and services (only books are currently exempted). DS Companies (are registered tax-payers) need to use invoice type “B” in most cases (when direct sellers are non-registered VAT) and invoice type “A” (only when selling to registered tax-.payers direct sellers ) Current VAT general rate is 21% and needs to be disclosed in invoice only if direct sellers are registered tax.-payers in VAT
Effective November 1st, 1998, a new law was passed called “Monotributo”, applicable to small business, it is optional and not automatic, but instead requires acceptance and voluntary registration of sales-persons and consolidates income tax, VAT and social security contributions into one tax.
When companies sell to their salespersons: (representatives, agents, distributors, consultants, associates, etc.), there are different possible tax situations: -If sales-persons are registered VAT tax payers or registered in “Monotributo”, then the company should only charge general tax rate of 21%. -If sales-persons do not elect any of these situations, then the company has to charge in addition to 21% general rate, another 12.705% (i.e. made up by applying 10.5% on net to company value, plus 21% VAT).
Individuals (sales persons)
Personal Income Tax
Registration: Individuals need to file a return for personal income tax when taxable net income exceeds personal and family allowance deductions.
V.A.T.
Need to register: For sales-persons: when their annual sales to end-consumers exceeds $2,600,000 (AR$) for sales of goods. Below that level they are considered non-registered tax-payers. That means that in the price they pay to the companies, 10.5% additional VAT is already factored in for their supposed re-sale to end-consumers.
Payment of commissions to sales persons:
It is mostly advisable to structure them as discounts. When sales-persons do not buy products or services for themselves, commission payments have to be effected by canceling the sales-person’s invoice (who needs to be registered in both personal income tax and social security).
Social Security Taxes:
Sales-persons are not reputed employees and rather considered independent parties. Law regulates compulsory contributions for “Autonomous workers” which as of December 2020 should fall into Category “I” $ 3,419.20 AR$ per month. D.S. industry interpretation is that they do not apply to their sales-persons.
PROVINCIAL (STATE) TAXES:
Turnover Taxes
Levies net sales (net of discounts, returns, bad debts, V.A.T.) at a rate different for each province, i.e.: approximately an average of approximately 1.85% (sale of own manufactured products) or 4% in average (re-sale of products not-manufactured by tax-payer).
Sales-persons
CAVEDI entered into agreements with Provinces of Jujuy, Tucuman, Entre Rios, La Pampa, Catamarca, Mendoza, San Luis, Neuquen, Ciudad de Buenos Aires by which companies are collecting from their sales-persons turnover taxes ranging from 2% up to 4% of net sales. Most other provinces nominate only larger companies to charge and collect turnover taxes from their sales persons.
MUNICIPAL TAXES:
Companies
Levies on municipalities in which companies have their manufacturing plants, or headquarters. Tax is different among municipalities and based on number of personal employed or sales effected within the municipality.
Social Security
Does not apply to direct sellers since they are regarded as being independent and not employed.
Others
In the Santa Fe Province there´s a Direct Selling Law (the only province that has a DS Law). It´s under the number 13905.
The law stablishes an obligation to register DS companies working in this province (as in Feb 2021 the law hasn´t been regulated yet).
List of D.S. Advisory firms.
Legal Services
Dr. Ricardo Vilamonte
phone/ fax (5411) 4381-9793/6630
email: villamonteasoc@arnet.com.ar
The WFDSA International Guide to Direct Selling Legislation is a guide and is not exhaustive either in terms of subjects presented or for all areas of concern to direct selling companies. It is intended to cover general areas of concern. The Guide is not a substitute for legal counsel but only intended to alert you to the general nature of laws and regulations affecting the direct selling industry in a particular country. Consequently, before beginning an operation in any foreign country, it is strongly recommended that competent legal counsel be consulted. While every effort has been made to insure that the information contained in this Guide is accurate, the variety of sources used makes absolute verification difficult. Further, laws and regulations also can change from time to time without notice. Therefore, the WFDSA cannot be held liable for the information included in this publication.