Today, Argentine tax authorities (“AFIP”) issued special regulations (AFIP General Resolution No. 5248) that require certain corporate taxpayers (allegedly, less than 1% of the universe of those Argentine taxpayers) an additional advance payment of the current fiscal year’s estimated corporate income tax liability (the “Additional CIT Advance Payment”).
Corporate taxpayers subject to the Additional CIT Advance Payment are those which, in the last fiscal year closed, either (i) had a CIT liability in excess of ARS 100 million (approximately USD 700,000 at the official exchange rate), or (ii) obtained net profits—before the deduction of accumulated NOL—in excess of ARS 300 million (just over USD 2.1 million at the official exchange rate). For purposes of these regulations, “fiscal year” is any year closing between 1 August 2021 and 31 July 2022. Corporate taxpayers that fall in scenario (i) are required to pay 25% of the previous fiscal year’s CIT liability, while the requirement for those in scenario (ii) is 15% of their last year’s net profits before the NOL computation.
This implies that, through the Additional CIT Advance Payment, AFIP is in fact amending the regular CIT advance payment regime to increase its tax collection because—depending on their classification under these new regulations—taxpayers would be required to pay 125% of their base year’s CIT liability, or half of the CIT that would have been paid in the previous fiscal year should accumulated NOLs not have offset net profits. Payment will have to be made in three equal and consecutive installments. Deadline for payment for those corporate taxpayers that their last fiscal year closed during 2021 is in October, November and December 2022. For those with a fiscal year closing between January and July 2022, those installments are to be paid in each of the last three months of their current fiscal year.
It should be considered that, until now, tax credits have not been adjusted for inflation. Therefore, any payment in excess of the estimated CIT liability for 2022 or 2023 may be in fact an additional tax, considering the current inflationary environment locally. Thus, it may be advisable to analyze alternatives routes, which may—unfortunately—include a judicial challenge to the regulations.
