Argentine Tax Authority Establishes New Extraordinary Advance Payment on Account of Income Tax

General Resolution 5391/2023, published in the Official Gazette on July 21, 2023, applies to those individuals and companies in article 73 of the Income Tax Law (broadly, legal entities incorporated in Argentina and other persons assimilated to them), provided that regarding their tax returns for tax years 2022 or 2023 they comply with:

1. Having informed a tax result -without applying the deduction of tax losses from prior fiscal years - is equal or above ARS 600.000.000.

2. Not having determined tax to be paid.

Legal entities with a certificate of income tax exemption pursuant to General Resolution No. 2681 are excluded from this regime.

 

How is the payment on account determined?

To determine the payment on account, entities must consider:

a) the income tax’s return for the tax year 2022 (entities closing their tax year between August and December of 2022, inclusive).

b) the income tax’s return for the fiscal year 2023 (entities closing their tax year between January and July of 2023, inclusive).

The amount is determined by applying a 15% rate on the tax result deriving from the tax return of the fiscal year immediately prior to the one to which the payment on account corresponds, without considering the deduction of tax losses from prior tax years.

 

When it must be paid?

The payments must be made in 3 equal and consecutive instalments, as follows:

Tax Year End	Instalments No. 1, 2, and 3
August to December 2022	August 22, September 22, and October 22 of 2023
January to May 2023	December 22, 2023, and January 22 and February 22, 2024
June 2023	January 22, February 22, and March 22, 2024
July 2023	February 22, March 22, and April 22, 2024

 

How is the payment on account computed?

It will be computed in the following opportunities:

a) For entities closing their tax year between August and December of 2022, both inclusive: annual tax return for tax year 2023.

b) For the entities closing their tax year between January and July of 2023, both inclusive: annual tax return for tax year 2024.

 

Which restrictions does the Resolution establish?

The Resolution expressly provides that:

a) It does not apply to cancelling the payment on account of the compensation mechanism provided in article 1 of General Resolution No. 1658. This means that taxpayers cannot use the credit balance they maintain with the tax authorities to settle this payment on account.

b) The taxpayers and those to whom the Resolution applies cannot use the payment on account in the estimation for reducing ordinary payments in advance (i.e. those which every taxpayer regularly pays, except when certain conditions for reduction apply).