Argentina: Amendments to the fourth category income tax

Decree No. 473/2023
19 Sept 2023    1 minute read
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In brief

Decree No. 473/2023 ("Decree") established that only income that exceeds the equivalent of 15 Monthly Minimum Wages (MMW), which as of today amounts to USD 1,770,000, will be subject to income tax, starting as of October 2023, applicable to both the monthly withholding on regular salary and the second installment of the thirteenth salary.

Contents

In focus

These are the main features of the Decree:

  1. For the second half of 2023, the amount of the remuneration and/or gross salary to be considered exempt from income tax, regarding the second installment of the thirteenth salary to be paid in December 2023, will amount to a monthly sum that is equivalent to 15 times the MMW. As of today, this amount is equal to USD 1,770,000.
  2. For individuals whose remuneration and/or gross salary does not exceed the monthly amount of 15 times the MMW, withholding agents must add a special increased deduction for an amount resulting from subtracting personal deductions from the net income so that it is equal to the amount that — once computed — determines that the net income subject to tax is equal to zero. This implies that a salary below the above-mentioned threshold of 15 times the MMW will not be subject to income tax. This amendment will be effective as of October 2023, and therefore, no adjustments should be made in the tax calculated for previous months, nor should reimbursements be made as a result of the application of new provisions.
  3. According to the Decree, the Federal Tax Authority (AFIP) will increase the amounts of the progressive grid applicable to income tax, which ranges from 5% to 35%, which has not been published by AFIP so far. This increase will not apply retroactively to January but only between October and December 2023, both inclusive.

The Decree's provisions will apply as of 1 October 2023.

Click here to access the Spanish version.

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