Approval by the Senate of the law on relevant and palliative fiscal measures bill
Tax Law department report | Approval by the senate of the law on relevant and palliative fiscal measures bill
In the early hours of yesterday, june 13th, the National Senate approved the new “Law on Relevant and Palliative Fiscal Measures” (“Fiscal Package”). Although the Fiscal Package had already been passed by the House of Representatives (Chamber of origin), the Senate introduced amendments. The House of Representatives may approve the modifications made by the Senate or insist on its original project, in both cases by an absolute majority of those present. In either case, the project will become law.
The subjects covered in the bill include the following:
1- Income Tax.
A non-taxable minimum of gross ARS1,800,000.00 for single individuals and $2,340,000.00 for married individuals with two children was proposed. The tax rate proposed in the bill started at 5% on net income and increased to 35% based on the taxpayer’s income level.
The Senate rejected the chapter in its entirety, which must be reconsidered by the Chamber of Origin, which will decide if it approves the Chapter or accepts its suppression by the Senate with the passing of the law.
2- Personal Assets Tax.
The proposed regulation increases the non-taxable minimum from ARS 27,000,000 to ARS 100,000,000 and introduced a progressive rate system, ranging from 0.5% to 1.5%. It also offered a benefit for compliant taxpayers, granting them a reduced rate of 0.5%, while those subscribing to the five-year advance payment system would pay a reduced rate of 0.45% per year.
The Senate rejected the chapter in its entirety, which must be reconsidered by the Chamber of Origin, which will decide if it approves the Chapter or accepts its suppression by the Senate with the passing of the law.
3- Asset Regularization Regime.
The proposed tax amnesty exempts regularizations below USD 100,000.00 from payment, applying a progressive rate on the excess amount depending on the stage of subscription to the regime, ranging from 5% to 15%, which was accepted by the Senate.
However, during the vote, Article 19 on the taxpayers covered was removed, thus eliminating the possibility for non-resident subjects to adhere to the regime.
Additionally, Title VI, which included the possibility of regularizing real estate in the name of third parties, was entirely removed.
Finally, the article concerning subjects excluded from the regime was modified.
The regime, with the mentioned modifications, was approved by the reviewing chamber.
4- Exceptional Regularization Regime for Tax, Customs, and Social Security Obligations.
A moratorium on overdue tax, customs, and social security obligations as of March 31, 2024, was approved, allowing for regularization either in cash or through a payment plan, providing different waivers depending on the payment method.
The bill establishes that those adhering the Regime within the first 30 days after the law is enacted will receive a 70% waiver of compensatory and punitive interest. This waiver decreases as entry into the moratorium is delayed.
The regime was approved by the reviewing chamber.
5- Simplified Tax Regime (Monotributo).
The bill proposes updates to the maximum billing limits, raising them to $68,000,000.00 annually (the current maximum amount is $16,000,000.00) and new rates that would increase according to the corresponding categories (the highest proposed is $375,000.00 monthly), which were passed.
Regarding the social monotributo, its extension was eliminated. This category allowed for a minimum cost of $3,200.00 for lower-income sectors.
6- Other Relevant Amendments.
– The Reviewing Chamber rejected Article 111, which instructed the Executive Branch to submit a bill seeking to increase administrative resources by eliminating or modifying tax exemptions or benefits.
– The Reviewing Chamber approved the reforms regarding (i) the repeal of the Real Estate Transfer Tax for individuals and undivided estates, (ii) amendments to procedural rules aimed at promoting greater transparency regarding the effective tax burden on products and services, including the breakdown of taxes on invoices and price lists, and (iii) limitations on tax withholdings for electronic payments to small taxpayers.
Santiago Montezanti
Enrique López Rivarola