The government launched a “New Fiscal Pact” on Wednesday afternoon, a tax amnesty and a scheme to regularize undeclared assets which were part of President Javier Milei’s flagship Ley Bases, passed in late June. The new amnesty will be in force until March 2025, although the deadline could be extended until July of the same year.
People who report less than US$100,000 are exempted from paying taxes, as are those who declare more wealth but keep their money in Argentina until December 31, 2025 — or place it in specific investments authorized by the Economy Ministry.
The pact has its own slogan: “The earlier the cheaper. Don’t wait until the last minute.” It’s part of a fiscal package from the Ley Bases which reduces the income tax threshold and cuts personal asset taxes alongside the tax amnesty and undeclared assets scheme.
The amnesty applies to tax residents in Argentina, companies and individuals, who can declare assets both in the country and offshore they possessed before December 2023. Former tax residents who had that status up until December 31, 2023 are also included.
The first stage to subscribe to the program will end in September 2024, when the government is set to receive information on undeclared financial accounts in the United States belonging to Argentines. The US and Argentina signed a Foreign Account Tax Compliance Act during Alberto Fernández’s administration which established an automated exchange of financial information to deter tax evasion.
The new fiscal pact creates a new tax to be paid in U.S. dollars, which will help to increase the government’s gross international reserves. Those who declare before September 30 will pay a 5% share on anything over US$100,000. The percentage increases with time: 10% for those who declare before December 31 and 15% before March 31, 2025.
Those who adhere to the scheme will also be exempted from lawsuits for crimes related to taxes, foreign exchange, and customs. They will also not be liable to paying omitted taxes and fines that are pending litigation, and from investigations on unjustified estate growth. If, for example, someone used undeclared money to buy real estate, they could also enter the program, given that they prove that they had the money before December 31, 2023.
The norm also regulates the possibility of bringing forward the payment of Personal Property tax from 2023 to 2027 at a discounted rate of 0.45% per year, meaning the taxpayer would not have to file the tax return until 2028.
Money can be deposited in accounts that will be specially created by banks and brokers, and leave it there at least until December 31, 2025. If they deposit it there to avoid payment but withdraw it before the deadline, they will be charged an extra 5%.
On Friday, the Herald learned, that the government will release a list of “productive investments” whose payment will exclude the evaders from paying — they will be specific financial assets and real estate developments with a corresponding completion percentage.
You may also be interested in: RIGI: understanding Argentina’s new large investment regime