Palliative and Relevant Fiscal Measures

Legal News - July 8, 2024

Today, July 8, 2024, the Official Gazette published Law 27,743, also known as the “Palliative and Relevant Fiscal Measures”. This law was approved by the National Congress on June 27, 2024, and promulgated by Decree 593/2024, which is also published today.

The Palliative and Relevant Fiscal Measures Law regulates, in summary, the following aspects:

It establishes a broad “Regime of regularization of tax, customs and social security obligations” due by 03.31.2024, for a period of 150 days from its regulation. It allows for cash payment and installment plans based on adherents’ characteristics and payment method, with benefits of partial waiver of interest based on the date of adherence, total waiver of fines, suspension, and extinction of criminal actions.
It creates an extensive “Asset Regularization Regime” existing as of 12.31.2023 for Argentine tax residents, through the payment of a special tax in dollars with rates of 5%, 10% or 15%, depending on the stage of adherence. The cash deposited in a “Special Regularization Account” will not be taxed if kept there until 12.31.2025, inclusive. It allows the prior allocation to specific investments. Participants are exempt from the payment of taxes and from civil, criminal and administrative actions related to the regularized assets.
In terms of “Personal Assets Tax” (“PAT”), it provides a special regime of advance payment for the periods from 2023 to 2027 (the “REIBP”), with a rate of 0.45% per fiscal period based on the taxable base as of 12.31.2023. Those who have adhered to the Asset Regularization Regime may join the REIBP and pay taxes for the periods 2024 to 2027, applying a 0.5% rate on the total value in pesos of the Regularized Assets. Adherents will be exempt from wealth taxes until 2027, with fiscal stability until 2038. In addition, it modifies the PAT Law, increasing the exempt minimum to $100,000,000 for general assets, and $350,000,000 for primary residences, unifying the rates for assets located both domestically and abroad, and gradually reducing the rates to 0.25% by 2027.
It repeals the “Tax on the Transfer of Real Estate” (regulated in Title VII of Law No. 23,905).
Regarding the “Income Tax” (“IT”), personal deductions are updated, and greater progressivity is introduced for the 2024 period in the scale applicable to individuals, with rates ranging from 5% to 35% on increased net income. The minimum salary is set at $1,800,000 for single employees and $2,340,000 for married employees. A special deduction is created to neutralize the impact of the modifications, thereby avoiding an increase in the tax obligation for the months elapsed in 2024. Starting from the 2025 fiscal year, semi-annual adjustments (January and July) based on the CPI are planned for the amounts established for personal deductions and the progressive scale, with an exceptional adjustment in September 2024, based on the CPI variation for the months of June to August 2024. Additionally, the “Cedular Tax on Higher Incomes” of Law No. 27,725 is repealed, along with differential treatments in the tax and exemptions provided for employees.
It reforms the “Simplified Regime for Small Taxpayers“. It consolidates the categories for commerce and services, increases the maximum billing enabling re-entry of previously excluded individuals starting from January 1, 2024, and updates the parameters semi-annually.
Among “Other fiscal measures“, it provides a “Regime of fiscal transparency to the final consumer“, which requires to discriminate the net price of the applicable taxes in the invoices to final consumers. Finally, it increases to 5% the cap of the mining royalties for new projects.