Argentina: Taxation of Restricted Stock Units in Argentina

 While much of the world routinely attracts and retains talent through equity compensation, Argentina continues to struggle to bring its laws and judicial interpretations of them into the 21st century. Equity compensation is an umbrella term for stock grants, stock options, phantom shares, and other tools that reward loyalty and performance. This article takes a quick look at a specific form of equity compensation known as restricted stock units (“RSUs”). 

Definition and Granting Process 

RSUs are units that are converted into shares according to a schedule tied to the employee’s service tenure. Typically, an RSU is regulated by an incentive plan (the “Plan”) through which an employer or its affiliate defines the benefit, terms, and conditions applicable to qualifying employees (the “Participants”). 

The Participant does not acquire the shares until reaching the scheduled dates (commonly referred to as “vesting”). Until vested, the RSUs cannot be acquired or sold. The shares received may often be “restricted,” meaning they cannot be sold or traded until the restriction is lifted. In most cases, this restriction refers to the time at which the shares have been registered with a securities commission to allow their purchase by and sale to the general public. 

For tax purposes, the RSU granting process can be divided into three stages: 

1. Issue Date: The date on which the employee becomes a Participant under the Plan. 

2. Vesting Date: The date when the employee acquires ownership of the RSUs and is entitled to convert them to stock. Most Plans stagger the vesting dates, meaning not all RSUs vest at the same time. This gives the employee an incentive to continue working for the company over a prolonged period. 

3. Delivery Date: This is the date when the employee—now the holder of a vested RSU—exercises the right to receive stock in exchange for the RSU. Most Plans allow this exchange to occur on a cashless basis, i.e., the employee is not required to pay additional money to redeem the RSU.1 

The Taxable Event

For tax purposes, equity compensation—like wages—is widely considered subject to income and other payroll taxes.2 The key question for RSUs is when does this tax occur? At issue? At vesting? Upon delivery? The matter is not regulated by statute in Argentina,3 but judges and scholars have reviewed the question.4 While not uniform, the dominant trend among courts and scholars is to consider these awards as 2 compensation,5 even if they are part of a Plan provided by a company that is not the employer of record. 6

Because most courts consider RSUs to be compensation, the Argentine government taxes RSUs received by an Argentine resident as follows: 

  • • The employer (whether or not the issuer) must withhold income tax (at progressive rates of up to 35%) from the employee at the time of delivery. The tax rate is the same as that applied to wages,7 even if the shares are those of a foreign company.8 Likewise, the employer and employee must pay social security taxes on the value of the delivered shares. 
  • Upon delivery, the full value of the delivered shares is considered ordinary income. If the stock pays dividends, then the Participant must pay income tax on these dividends at the rate of 7%. If dividends are paid by the Argentine employer, the Participant is required to withhold income tax from the dividend payment. If the dividend is sourced from outside Argentina, the Participant is responsible for declaring the income, filing a return, and paying the relevant income tax.9 
  • In addition to income tax, the Participant must pay a Personal Assets Tax on the shares (but not on the RSUs) as of December 31 of each year, if the Participant’s worldwide assets exceed AR$ 11.3 million (as of tax year 2022).10 

Valuation of the Stock 

While the above answers the questions of when to tax and at what rate, it does not tell us how to calculate the underlying value of the taxable income. That question is easily answered when referring to shares traded on an exchange (the fair market value of the delivered shares as of the time of their delivery). But what if the RSUs give the Participant restricted stock that is not marketable? How are these shares valued for tax purposes? 

For income and personal assets tax purposes, the value of non-marketable shares is calculated by applying the equity method (total issuer equity divided by outstanding shares) to the issuer’s most recent balance sheet for the relevant tax year.11 If these shares are expressed in a foreign currency, they must be converted to local currency at the exchange rate quoted by the Banco de la Nación Argentina on the day the shares are delivered.12 

If the employee eventually sells the shares for a profit, that gain will be subject to income tax at a fixed rate of 15%. 3 

Final Considerations 

On balance, we conclude that RSUs are an efficient vehicle for employers to motivate and retain their employees. RSUs reward long-term service, while deferring tax consequences until the RSUs are effectively converted into stock. Nevertheless, in evaluating the bottom-line benefits, Participants should consider the potential costs of taxes on assets or dividends once the RSUs become shares. 

* * * 

For more information, please contact Daniela Contreras ( 

The foregoing article is a description of publicly available information and is not intended as legal advice or as a comprehensive analysis of the matters referred to herein. 


1This cashless feature differs from the conventional exercise of a stock option in which the employee is entitled to purchase stock at a price that is intended to be at a discount of the market price.

2 Nonetheless, a minority of courts and commentators do not consider these awards as tantamount to wages because they do not reward the employee for work (rather for loyalty and longevity of tenure) and there is no “causal link” between the equity award and the work performed by the employee. See Juan M. Arias, “Planes de opciones de compra de acciones (Stock Option Plans),” Thomson Reuters.

3 The National Income Tax Law defines a taxable event for compensation generally but is silent on RSUs and other equity compensation instruments.

4 See International Stock Plans: The Practitioner´s Guide to Exporting Employee Equity. ARGENTINA, August 2018,; Ricardo F. Seco, “Stock Option Plans. Certain Problems in Labor Law,” Errepar, June 2015; María Victoria Tuculet, “Los planes de opciones de compra de acciones (Stock Options). Algunos de sus problemas desde el derecho del trabajo,” Thomson Reuters, February 2019; Pablo A. Figueredo, “El beneficio de las ‘Stock Options’. Concepto y naturaleza jurídica. ¿Qué dice la jurisprudencia?” Errepar, August 2019.

5 See, e.g., Vázquez, Jorge c/ Apache Energía SRL y otros s/Diferencia de Salarios, National Labor Court of Appeals (Chamber I, 31.10.08); Sánchez Avalos, Julio Arturo y otros c. Cisco Systems Inc. y otros s/ despido, National Labor Court of Appeals (Chamber V, 23.11.17).

6 See, e.g., Molina, Claudia Gabriela y otros c. Recol Networks S.A. Sociedad Extranjera y otros, National Labor Appeals Courts (Chamber II, 17.02.10).

7 National Income Tax Law, §§ 82 (b) and 94; General Resolution No. 4003-E/2017 (AFIP); See. e.g., Almirón, Juan Manuel c/ Dirección General Impositiva s/Recurso Directo de Organismo Externo, Federal Administrative Court (Chamber I).

8 General Resolution No. 4003-E/2017 (AFIP), § 2.

9 National Income Tax Law, §§ 48 and 138, or 97.

10 Law No. 23,966, §§ 24 and 25. This threshold is subject to increase by the coefficient from the annual variation of the General Index Consumer Price, provided by the Institute of Statistics and Censuses.

11 Law No. 23,966, §§ 22 (h).

12 National Income Tax, Implementing Decree (2019), § 160.