05 Jul 24 Law on relevant Fiscal Measures

Recently, a new Law on relevant Fiscal Measures (the «Law») was approved.

Below, we detail the main points:

The Law aims to provide exceptional regularization of tax, customs, and fiscal obligations, in order to achieve voluntary payment of obligations by taxpayers and responsible parties. Those who opt for this regime will obtain different benefits depending on the modality of adherence and the type of debt they have.

The Law specifies the eligible and excluded subjects under the regime, as well as the formalities to be followed.

Likewise, provinces, the Autonomous City of Buenos Aires, and municipalities are invited to join the regime and take liberal measures regarding taxes and fees within their jurisdictions.

The Law introduces substantial changes to the following regimes:

1) Exceptional Regularization of Tax, Customs, and Social Security Obligations Regime (the “Regime”)

– It allows for the regularization of overdue tax, customs, and social security obligations and their infractions (with some exceptions) committed a Mas of March 31, 2024.

– Benefits arising from adhering the Regime will depend on the modality and moment of adherence. It includes the suspension of ongoing tax and customs criminal actions and the interruption of the statute of limitations, provided there is no final judgment.

– The conditions of the regularization plan will depend on whether the taxpayer is an individual or legal entity, and the payments shall be made in monthly installments with an interest rate set by the Banco Nación, namely:

• If the taxpayer joins within the first 30 days from the effective date set forth by the AFIP: 70% forgiveness of punitive and compensatory interest for immediate payment, or in a payment plan of up to 3 monthly installments;
• If the taxpayer joins from day 31 to day 60 from the effective date set forth by the AFIP: 60% forgiveness of punitive and compensatory interest for immediate payment, or in a payment plan of up to 3 monthly installments;
• If the taxpayer joins from day 61 to day 90 from the effective date set forth by the AFIP: 50% forgiveness of punitive and compensatory interest for immediate payment, or in a payment plan of up to 3 monthly installments;
• If the taxpayer joins within the first 90 days from the effective date set forth by the AFIP: 40% forgiveness of punitive and compensatory interest for immediate payment, or in a payment plan to be determined by the AFIP;
• If the taxpayer joins after 91 days from the effective date set forth by the AFIP: 20% forgiveness of punitive and compensatory interest for immediate payment, or in a payment plan to be determined by the AFIP.

– For individuals in the latter two cases, a down payment of 20% of the debt is required, with the balance payable in up to 60 monthly installments. Micro and Small Enterprises and non-profit entities will make a 15% down payment and pay the balance in up to 84 monthly installments. Medium Enterprises will make a 20% down payment and pay the balance in up to 48 monthly installments. Other taxpayers will make a 25% down payment and pay the balance in up to 36 monthly installments.

– In all cases, 100% of fines will be waived, and criminal actions will be extinguished.

2) Asset Regularization Regime

– Applicable to individuals, undivided estates, and legal entities, whether residents or non-residents who were Argentine tax residents as of December 31, 2023, and individuals who were Argentine tax residents as of December 31, 2023, but lost that status.

– The deadline to adhere to the Regime extends until April 30, 2025, and can be extended by the Executive Power until July 31, 2025.

– The regime is divided into three stages, depending on the date of adherence. After adhering, an affidavit of the Asset Regularization Regime must be submitted within the specified deadlines in each stage.

– Assets included in Argentina and/or abroad: national or foreign currency, in cash or deposited in bank accounts; real estate; shares participations, or rights in companies and trusts, or similar assets; securities, bonds, among others; other movable assets; credits of any nature; rights and other intangible assets, except cryptocurrencies and similar assets which are limited to those in Argentina.

– A Special Regularization Tax is applied based on the total value of the assets being regularized, calculated in dollars. The exchange rate for the calculation will be determined by regulations from the National Executive Power («PEN»). Depending on the time of the declaration and payment, the tax rate will be 5%, 10%, or 15%.

– Those adhering the Regime will benefit from exemptions related to unreported taxes and accessory obligations originating from the assets being regularized, and release from all civil and criminal actions related to tax, exchange, customs, and administrative infractions arising from the declared assets, credits, and holdings.

3) Personal Assets

– Special Regime for the Payment of the Personal Property Tax («REIBP» for its acronym in Spanish). It is a voluntary and optional regime for the fiscal periods from 2024 to 2027. Individuals and undivided estates that are tax residents in Argentina and individuals who, as of December 31, 2023, are not considered residents but were previously Argentine tax residents before that date, may opt to adhere to the REIBP until July 31, 2024.

• Covers fiscal periods from 2023 to 2027 in a unified manner.
• The taxable base is determined by the assets held by the taxpayer as of December 31, 2023. After applying the relevant provisions of Law 23,966 on Personal Assets Tax, the resulting amount is multiplied by 5.
• The tax rate is 0.45% for individuals and undivided estates, and 0.50% for taxpayers who have regularized assets under the Asset Regularization Regime.
• Initial payment; at least a 75% down payment of the total tax by the taxpayer is required.
• Taxpayers adhering to the REIBP will enjoy fiscal stability until 2038.

– Modifications to the Personal Property Tax.

• The general minimum non-taxable amount is increased to $100 million for 2023, and in the case of real estate used as the taxpayer’s or decedent’s residence in the case of undivided estates to $350 million.
• The differential and increased rate for assets abroad is eliminated, gradually reducing the applicable rate to 0.25% in 2027.
• A 0.5% reduction in the tax rate is established for fiscal periods 2023 to 2025, applicable to taxpayers who have fulfilled all tax obligations regarding the Personal Property Tax Law for the periods from 2020 to 2022.

4) Tax on the Transfer of Real Estate by Individuals and Undivided Estates

– Restoration of the Income Tax for the fourth category, renamed as ‘Personal Income Tax’, with certain modifications.

– Abrogation of the cedular tax for employees, retirees, and pensioner, and others.

– Repeal of certain exemptions, deductions and benefits applicable to employees, while reinstating personal deductions.

– Establishment of different scales for fourth category earnings.

6) Simplified Regime for Small Taxpayers 

– Amendment to the current wording of section a), third paragraph of Annex to Law 24,977 to include taxpayers who have earned gross income for the regime’s activities in the previous 12 calendar months that are equal to or less than the maximum sum set for the highest category (category K).

– Modification of section c), third paragraph of Annex to Law 24,977 to set the maximum unit sale price of tangible goods at $385,000. Categories of taxpayers are established based on annual gross incomes.

– Updates to turnover limits for different categories are made, and the PEN is authorized to increase these limits during the 2024 fiscal year.

7) Tax Transparency Regime for Consumers

– Article 39 of the Value Added Tax Law is substituted, effective from January 1, 2025. In this regard, registered taxpayers that conduct sales, leases, or services provided to final consumers and small taxpayers must disclose the tax imposed on the transaction on the invoice or equivalent document. Likewise, they must indicate the net amount without the Value Added Tax («VAT») and include the legend «Price without Tax.»

– Finally, in advertising for services at national, provincial and municipal levels that are freely accessible, the term «free» or words cannot be used. It should be clarified that these are services made available through taxpayer contributions.

8) Other Fiscal Measures

– Relief from tax withholdings on electronic payments for small taxpayers: Entities managing debit, credit and similar cards, electronic payment processors, and financial institutions must provide authorities with monthly information on payments made through the systems they manage.