The national government sent the draft law to Congress “Principle of fiscal innocence”with the goal “Sign” To legally help people who use the “dollars under the mattress” and to drastically reduce the number of criminal tax evasion proceedings.
The initiative aims to change the punitive tax system (which carries penalties of up to nine years in prison) and create a system that encourages the use of undeclared money by eliminating the need to justify personal consumption.
The 5 keys to the law of “fiscal innocence”
The project, intended to promote the injection of undeclared funds into the market, is based on the following modifications:
- Increasing the criminal evasion threshold: The amounts at which a taxpayer can be investigated for tax evasion will be dramatically increased: Simple tax evasion: increase from $1.5 million to $100 million. Increased tax evasion: The minimum amount increases from $15 million to $1,000 million.
- Shorter statute of limitations: The project shortens the period during which ARCA (Customs Collection and Control Agency) can demand payment of undeclared taxes or file complaints from 5 to 3 years.
- Simplified regulation for “dollars under the mattress”: A simplified income tax system is created for persons with income less than $ 1,000 million and assets less than $ 10 billion. This regulation removes the obligation to report your personal consumption, making it easier to use undeclared money.
- Less prosecution: ARCA will not file a criminal complaint if the person or company cancels its debts before the lawsuit is filed or pays the entire debt, interest and an additional 50% surcharge within 30 days of the start of the investigation.
- More expensive fines: The project compensates for the lower controls by significantly increasing fines for formal non-compliance. The penalty for failure to file the affidavit was $200, $220,000 for individuals and $440,000 for corporations.
You are innocent until proven otherwise: What is “Tax Innocence” that will soon be law?
The heart of the project that will involve the government in the project extraordinary meetings of the congress, which is to be discussed in December, is the Elimination of the declaration of initial assets and the justification for consumption when accounting for the newly created simplified personal income tax.
Currently it is Income tax requires taxpayers to justify the fluctuations in their assets from year to year. If the declared consumption plus the change in goods exceeds the declared income, ARCA assumes undeclared profits.
The official project aims to make this obligation to justify consumption more flexible. If a taxpayer manages to justify the ownership of his assets (investments, real estate, bank deposits) at the beginning of a period, he is subject to the “presumption of innocence” for future income that does not come from an unjustified increase in assets..
The advantage is that the taxpayer You would no longer have to prove how you spent your money month after month. If your assets at the end of the year are compatible with your declared income, the consumption information is no longer a checking factor. This drastically reduces the risk of being audited by ARCA for consumption discrepancies.
In this way, the funds that enter the formal circulation through this regime receive a Presumption of legitimacy (tax innocence) towards the future.
What is the simplified earning system?
The project gives legal force to the simplified income tax It has already come into force by ARCA resolutionHowever, due to the regime’s lack of legal certainty, it only received the support of 14,000 taxpayers.
The Simplified Earnings Regime is a voluntary option created by ARCA for individuals with the aim of facilitating tax compliance and simplifying annual tax reporting.
When it was founded, it was intended only for income from Argentine sources, but recently another disbandment has taken place ARCA expanded the scope to include income from foreign sourcessomething that will certainly differ from the original wording in the project
Attachment: It is an option that is exercised annually for each fiscal period (applicable from the 2025 fiscal period).
Large taxpayers cannot join, and the The maximum income is $1,000 million and the equity is $10,000 million.
This is how Earnings Simplified works
The simplified personal income tax implies a fundamental change in the way the taxpayer interacts with the state treasury:
Ready-made explanation: ARCA uses the information it already has in its databases (salaries, billings, expenses, etc.) to pre-prepare the simplified affidavit.
The taxpayer must validate the information proposed by ARCA and You should only upload data that the Treasury Department cannot obtain from third parties.
The intervention takes place digitally via the “PH Simple Earnings” service from the ARCA website.
What is the key to “innocence”
The great appeal of Simplified Profits, linked to the concept of tax innocence, is the exemption from one of the most complex and monitored obligations: the declaration of assets.
Those who select and submit the affidavit in the simplified procedure are exempt from the obligation to disclose the detailed composition of their assets (which used to be the appendix to private assets and the justification of inheritance).
ARCA provides the Focus on correctly declaring income (billing) and deductible expensesbut not, as before, exhaustive in personal consumption or wealth variation.
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