Argentina: Tax on the highest income from employment relationships, retirements and privilege pensions

Law no. 27,725

In brief

On 6 October 2023, Law 27,725 was published in the official gazette, promoted by the government, through which the fourth category of income tax was eliminated as of the 2024 fiscal period. It will be replaced by a new tax called "tax on the highest income from employment relationship, retirements and privilege pensions" (hereinafter referred to as the "Tax on the Highest Income").


Contents

In focus

The Tax on the Highest Income's main aspects are as follows:

  1. 1.    Taxpayers who receive a monthly income greater than the equivalent of 15 times the minimum living and mobile wage (MLMW) will be subject to the new tax.
    2.    On the highest income calculated on an annual basis, a non-taxable annual minimum equivalent to 180 MLMW will apply, and no other item may be deducted.
    3.    Above the highest income, after deducting the non-taxable minimum according to the previous point, a progressive grid will apply that will range from 27% to 35%; this scale will be updated twice a year, in January and July.
    4.    It is important to highlight that the elimination of the fourth category of income tax and the applicability of the Tax on the Highest Income will be effective at the beginning of the 2024 fiscal period. For the rest of the 2023 fiscal period, the current scheme will continue to apply, with the modifications introduced by Decree 473/2023 applicable to remunerations and/or salaries accrued as of 1 October 2023. You can access the publication we made on this topic through this link: Amendments to the fourth category income tax.

Click here to read the Spanish version.


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