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  5. Argentina: Amendment to the Income Tax Law - Additional tax rate on unexpected income obtained by companies

Argentina: Amendment to the Income Tax Law - Additional tax rate on unexpected income obtained by companies

08 Jun 2022    2 minute read

In brief

On 7 June 2022, the Executive Branch presented a bill, which will soon be sent to Congress, that taxes companies' "unexpected income." This bill establishes an additional tax rate of 15% on income tax applicable to companies and the permanent establishments of foreign companies ("Companies") that meet certain requirements provided by this bill. 

Contents

In focus

The provisions of the bill are as follow:

  1. Taxpayer. Companies that comply with the requirements set out in item a) below jointly with one of (i) and (ii) of item b) below:
    1. The taxable net income or the accounting result, inflation-adjusted, corresponding to the first fiscal year closed as from the first day of the month immediately following that in which the law becomes effective should be, at least, ARS 1 billion.
    2. (i) The accounting income inflation-adjusted, for the first fiscal year ended on or after the first day of the month immediately following the effective date of the law must be at least 10% of the total income of that period.

(ii) The accounting income, inflation-adjusted, for the first fiscal year ending on or after the first day of the month immediately following the effective date of the law, should represent, with respect to the total income of that period, a percentage equal to or higher than 20% of that represented in the previous fiscal year. 

For the purposes of the calculations of item b), the income tax itself and the results from the extraordinary income and/or expenses indicated by the regulations must not be considered in any case.

  1. Taxable base. The taxable base will be given by the excess of the net taxable income resulting from comparing the net taxable income in the first fiscal year closed as from the first day of the month immediately following the effective date of the law, with the net taxable income of the previous fiscal year adjusted for inflation by means of the Consumer Price Index. For such purposes, exempt or non-taxed profits should be computed.
  2. Additional tax rate. 15%.
  3. Validity period of surtax. The surtax will be applicable only once. In this sense, the additional tax rate will be applicable only for the first fiscal year closed between the first day of the month immediately following the effective date of the law and the last day of the 12th month immediately following that date.

Click here to download the Spanish version.

Contact Information
Martín Barreiro
Partner
Buenos Aires
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martin.barreiro@bakermckenzie.com
Juan Pablo Menna
Partner
Buenos Aires
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juanpablo.menna@bakermckenzie.com

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