Decree 473/2023: Income Tax Law – Employees
On September 13th, 2023, Decree 473/2023 (the “Decree”) was published in the Official Gazette, through which certain adjustments are introduced to the Income Tax Law (o.t 2019) (the “ITL”).
Among the implemented adjustments, there are the following:
- For the second half of the fiscal year 2023, the threshold for gross compensation and/or gross salary to apply the exemption for the supplementary annual salary -SAC (as its Spanish acronym), as provided in subparagraph z) of Article 26 of the ITL- amounts to a monthly sum equivalent to fifteen (15) Minimum, Vital, and Mobile Salaries (“SMVM”, as its Spanish acronym), based on the amount in force as of October 1st, 2023. As a result, the exemption for the second installment of the 2023 SAC, will only apply when the average of the gross compensation and/or gross salary during the months of July and December does not exceed the equivalent amount of fifteen (15) SMVM, based on the value in force as of October 1st, 2023. Likewise, the exemption on the second installment of the 2023 SAC cannot exceed the amount calculated based on fifteen (15) SMVM as of October 1st, 2023.
- Regarding the income mentioned in subparagraphs a), b), c) of Article 82 of the ITL (which include, among others, those derived from holding public positions, working as employee, and receiving pensions or retirement benefits), a special deduction will be applied to ensure that, once computed, the net taxable income equals zero (0). This deduction will exclusively impact individuals whose gross compensation and/or gross salary does not exceed the monthly equivalent of fifteen (15) SMVM, based on the value in force as of October 1st, 2023. Consequently, individuals engaged in the aforementioned activities whose gross monthly compensation falls below fifteen (15) SMVM, as per the value in force as of October 1st, 2023, will cease to pay the tax. The special deduction will only be applicable in the case that, during the period from the effective date of the Decree until the amounts received by December 31st, 2023, inclusive, the monthly average of gross compensation and/or gross salary does not exceed or is equal to the amount in effect during that period.
Additionally, the Argentine Federal Tax Authority (“AFIP”) is tasked with increasing the thresholds of the progressive scale outlined in the first paragraph of Article 94 of the ITL (applicable to individuals and undivided estates). This is done with the objective of reducing the amount of tax withholdings for those taxpayers who receive income mentioned in paragraphs a), b), and c) of Article 82 of the ITL (which include, among others, those derived from holding public office, working as employee, and receiving pensions or retirement benefits) when these earnings exceed the amount of fifteen (15) SMVM.
Finally, it is important to note that this measure will apply to all earnings and/or salaries accrued from October 1st, 2023.
If you have any questions or require any additional information, please contact:
Liban A. Kusa: liban.kusa@bruchoufunes.com
Ezequiel Lipovetzky: ezequiel.lipovetzky@bruchoufunes.com
Daniela C. Rey: daniela.rey@bruchoufunes.com
Nicolas Nogueira Castellini: nicolas.nogueira.castellini@bruchoufunes.com
Pablo M. Muir: pablo.muir@bruchoufunes.com
Maximiliano Yudica Bartels: maximiliano.yudica.bartels@bruchoufunes.com
Antu Aguilar: antu.aguilar@bruchoufunes.com