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A bill entitled the Law on Palliative and Relevant Fiscal Measures ("Ley de Medidas Fiscales Paliativas y Relevantes" in Spanish) is expected to be sent to Congress to be discussed.
The bill includes measures that had been included in the Law of Bases1 but were ultimately not approved.
The main measures included in the latest bill are highlighted below.
Exceptional Regularization Regime for tax, customs and social security obligations
Those who pay tax, customs and social security obligations may apply to the Regularization Regime with regard to their obligations and infractions due as of 29 February 2024. The application may be filed beginning on the date the regulations issued by the Argentine Tax Authorities (AFIP for Administración Federal de Ingresos Públicos in Spanish) enter into force and up to 150 days thereafter.
Applying to the regime will result in the suspension of criminal tax, customs, and social security actions in progress and will freeze the criminal statute of limitations.
Benefits include:
i. Paying in cash and adhering to this regime within the first 90 days after the date on which the respective AFIP regulations enter into force can result in forgiveness of 50% of the compensatory and punitive interest accrued as of the date of adherence to the regime.
ii. Entering into a payment plan and adhering to the regime within the first 90 calendar days after the effective date of the respective regulations can result in forgiveness of 30% of the compensatory and punitive interests accrued as of the date of adherence to the regime.
iii. Paying in cash and adhering to the regime beginning 91 days from the date the AFIP regulations enter into force can result in forgiveness of 30% of the compensatory and punitive interests accrued as of the date of adherence to the regime.
iv. Entering into a payment plan and adhering to the regime beginning 91 days from the regulations' entry-into-force date can result in forgiveness of 10% of the compensatory and punitive interest accrued as from the date of adherence to the regime.
In all the cases 100% of the fines applied will be forgiven. The tax payment plans may contemplate 36, 60 or 84 monthly installments, depending on the type of taxpayer.
Assets Regularization Regime
Whether or not they were considered Argentine tax residents as of 31 December 2023 or are registered as taxpayers before the AFIP, individuals, undivided estates and corporations may adhere to the Asset Regularization Regime. Likewise, all individuals who do not qualify as Argentine tax residents but have assets located in Argentina or income they have obtained from Argentine sources may also adhere to the Regime.
The term for adhering to the Regime will be extended until 31 December 2024. The Executive Branch could extend the term until 31 March 2025.
Proper adherence to this Asset Regularization Regime requires the taxpayer to follow the requirements set out in the regulations. Subsequently, the taxpayer must file a return. The regulations will establish the formal requirements of the return, which will include the documentation and other information to be provided.
The Regime will be divided into three stages. The date of the taxpayer's declaration of adherence to the Regime will define the stage of the Regime applicable to the taxpayer and/or to the assets regularized in that stage.
The following assets may be subject to this Regularization Regime:
i. Assets in Argentina: Local or foreign currency, whether in cash or deposited in bank accounts; real estate located in Argentina; shares, participation in companies, or similar types of assets; securities; other movable properties; credits of any kind or nature, when the debtor of such credits is an Argentine tax resident; rights and other intangible assets, owned by a tax resident in Argentina; cryptocurrency and similar assets; other assets located in the country susceptible of economic value
ii. Assets abroad: Foreign currency, whether in cash or deposited in bank accounts abroad; real estate located outside Argentina; shares, participation in companies, or other similar types of assets; securities; other movable assets located outside Argentina; credits of any type or nature, when the debtor of such credits is not an Argentine tax resident; rights and other intangible assets; cryptocurrencies, and other similar assets; and other assets located outside Argentina
The tax base to determine the "Special Regularization Tax" will be calculated in United States (US) dollars and the tax to be paid will be calculated on the total value of the assets, both in Argentina and abroad on the excess of US$100,000.
Depending on the date of adherence to the regime (there are three stages), the tax rate should be 5%,10% or 15% of the value of the assets, on amounts exceeding US$100,000.
Special regime for Tax on Personal Assets
The Regimen Especial de Ingreso del Impuesto sobre los Bienes Personales (Special Regime or REIBP) is created for all tax periods until 31 December 2027.
Individuals and undivided estates that are tax residents in Argentina, substitute taxpayers, and individuals who, as of 31 December 2023, are not considered residents but had been tax residents in Argentina before that date are covered by the Special Regime.
Local corporations can also adhere to the Special Regime as substitute taxpayers for the tax corresponding to their foreign shareholders on their holding ownership interest in the local entity. The option to adhere to the REIBP is individual and voluntary; taxpayers may choose to adhere until 30 June 2024. The Executive Branch could extend the term through 31 August 2024.
Taxpayers who choose to adhere to the REIBP will pay the Tax on Personal Assets corresponding to the fiscal periods 2023, 2024, 2025, 2026 and 2027 in a single payment. To determine the taxable amount, the total amount of the assets as of 31 December 2023 will be considered (net of exempt assets). The nontaxable minimum will be deducted, and the final amount will be multiplied by five. Individuals and undivided estates that adhere to the REIBP will apply the 0.70% tax rate on the taxable base and substitute taxpayers will apply the 0.5% tax rate.
The regulations will establish the method and other requirements for filing the REIBP return and calculating the tax payable. The total tax liability must be paid by 31 July 2024. The Executive Branch could extend the term until 31 August 2024.
Taxpayers would have to make an initial payment of at least 75% of the total amount of the tax. This initial payment must be made until 30 June 2024. The executive Branch could extend the term until 31 July 2024.
Any individual or undivided estate resident in the country that chooses to adhere to the REIBP and whose taxable assets are less or equal to 330 million Argentine pesos (ARS330m) will be taxed the fixed amount of ARS2,475,000. This rule also applies to all the substitute taxpayers that choose to adhere to the REIBP.
Taxpayers that choose to adhere to the REIBP will enjoy fiscal stability until the year 2038 with respect to the Tax on Personal Assets or similar.
New rates for Tax on Personal Assets: The applicable tax rates will range from 0.50% to 1.50% for fiscal year 2023; from 1.25% to 1.50% for 2024, 2025, 2026; and 0.25% for fiscal year 2027.
Other changes:
- Several changes to Excise Taxes are included, such as cigarettes will be taxed at a rate of 73% on the sales price (including taxes, except value-added tax (VAT)), and penalties are imposed for the transport of tobacco without supporting documentation or with irregularities.
- The real estate transfer tax for individuals and undivided estates is repealed.
- The Income tax - Fourth Category (dependent employees) is modified regarding deductions and brackets, among other changes.
- Changes are made to the Simplified Regime applicable to small taxpayers ("Monotributo" in Spanish).
- New measures are added on the Consumer Tax Transparency Regime.
Contact Information
For additional information concerning this Alert, please contact:
Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires
- Carlos Casanovas
- Gustavo Scravaglieri
- Ariel Becher
- Sergio Caveggia
- Pablo Baroffio
- Sabrina Maiorano
- Juan Ignacio Pernin
- Agustina Paradiso
Ernst & Young LLP (United States), Latin American Business Center, New York
- Pablo Wejcman
- Maria Melina Oyhenart
- Ana Mingramm
- Enrique Perez Grovas
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
- Lourdes Libreros
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
- Raul Moreno, Tokyo
- Luis Coronado, Singapore
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
