Securities
As long as:
Foreign exchange
Since September 1, 2019, the Argentine government reenacted FX controls and regulations. These FX regulations are applicable to certain operations. Notwithstanding there are no foreign exchange restrictions applicable to restricted stock or RSUs, local employees may face difficulties in purchasing the foreign currency if the options are in foreign currency, or to transfer money abroad.
Tax
Employee
The employee is taxed on the spread upon purchase.
The employee is subject to a flat tax of 15 percent on any net gain resulting from the sale of the shares by Argentine Tax residents, or, alternatively, 13.5 percent on the gross sale price for non-residents.
Employer
Withholding & Reporting
Tax withholding and reporting are required upon purchase.
Deduction
Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.
Social insurance
Social insurance contributions are generally payable by the employee and employer when the shares are purchased.
Data protection
Obtaining an employee's written consent for the processing and transfer of his or her personal data is the most common approach to comply with certain aspects of data protection requirements. The employer also is required to register any database that includes an employee's personal data with the Argentine privacy authorities.
Benefits received from a purchase right may be considered part of the employment relationship and included in a severance payment if purchase rights are repeatedly granted to an employee. Upon involuntary termination of employment, an employee may be entitled to continued participation in the plan. In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.
In light of restrictions on payroll deductions, alternative arrangements may be necessary for contributions to the plan.
Labor
Not applicable.
Communications
Although plan materials are not required to be translated into Spanish, it is recommended, to ensure that employees understand the terms of their awards. Award materials should be addressed to individual employees in order to avoid securities law requirements.
