In the Personal Property Tax, the draft opinion of the tax project that circulates in The Senate incorporates key changes, raising the rates. These remain at 1.8% for 2023while in the version of the Chamber of Deputies they had been established at 1.5%, in both cases for goods in the country and abroad.
What are the changes to Personal Assets in the Senate
The rates established by the average sanction of Deputies they are 1.5% for 2023; 1.25% by 2024; 1% by 2025; 0.75% for 2026, and 0.25% for 2027 onwards.
Instead, The Senate ruling currently circulating establishes 1.8% for 2023; 1.5% by 2024; 1.2% by 2025; 0.9% for 2026, and 0.3% on the total value of assets that exceed the non-taxable minimum for the period 2027 onwards.
On the other hand, a benefit is added to compliant substitute taxpayers, which are SMEs required to contribute to the Personal Property Tax as substitute taxpayers. These SMEs will have a reduction of 0.125 percentage points in the rate for the fiscal periods 2023, 2024 and 2025.
To qualify as a compliant taxpayer, the SME must not have regularized assets in laundering, and must have submitted and paid in full, before December 31, 2023, the tax returns relating to the 2020, 2021 and 2022 tax periods. .
What the tax project establishes in Personal Assets
For the 2023 fiscal period, which will be declared next June, the project raises the non-taxable minimum of the Personal Property Tax to $100 million, and that of the home to $350,000,000.
Likewise, the Personal Property Tax rates are modified, eliminating the difference for assets abroad, and setting a single rate on a scale ranging from 0.5% to 1.5%, which are now being raised.
The Senate promotes a ruling that increases the rates of the Personal Property Tax
In this tax, there will be a benefit for the compliant taxpayer with 0.25% reduction for the rate corresponding to the fiscal periods from 2023 to 2026, with the condition of having complied on time with DJ 2020 to 2022.
If the taxpayer engages in money laundering, which is also proposed by the Government’s draft tax measures, the rate of the advance regime will be 0.5%, and otherwise, 0.45%.
In donations between parties where one of them did not enter the advanced regime, an additional Personal Property Tax will be paid.
What are the advantages of the advance of Personal Assets
Besides, A 5-year advance regime for Personal Assets is established. This regime applies to people residing in Argentina, but people residing abroad who at some point have been tax residents in Argentina can also benefit.
1. This novel mechanism should be evaluated by all those Argentines who decided to leave the country in the face of the constant attack on property rights during the government of Alberto Fernández.
2. Among the collateral benefits of this proposal, it must be kept in mind that the tax is not only calculated at a rate significantly lower than the current one.
If the taxpayers’ expectation is to increase the value of their assets In the future based on new savings, this tax would be calculated on a lower tax base, which would be the value of the assets as of December 31, 2023,
3. This issue would also have to be considered by the family groups that plan to carry out a restructuring process family assets.
The project establishes that donations between members of a family can be made without any additional tax burden, as long as both have entered the REIBP. Otherwise, they would have to pay the additional tax when the donor had not taken advantage of the regime.
The 5-year advance project for the Personal Property Tax has advantages
How the rates are reduced with the advance
4. Another positive element is the progressive reduction of rates of Personal Property. Although at this point it is appropriate to apply the rule of skepticism, since we remember in our recent history the failure of an equivalent proposal during the government of Mauricio Macri.
5. The RIBP basically consists of the fact that the taxpayer could pay in advance five continuous years of Personal Assets in exchange for obtaining a set of very significant tax benefits.
6. First of all, a reduction in rates is expected. The calculation of the tax corresponding to the five-year period would be calculated at a single rate of 0.45% (together, for the five years the rate would be 2.25%).
7. That is, the fiscal cost of entering the regime is less than paying two years of Personal Property Tax.
What to expect from fiscal stability
8. However, the The greatest advantage seems to come from the granting of a fiscal stability regime for the taxpayer who joins the REIBP, since they would pay a rate of 2.25% for the period 2023 to 2027; and 0.25% annually for the period 2028 to 2038.
9. Additionally, the Fiscal stability covers not only Personal Assets, but any type of wealth tax that the national Government decides to establish in the future. The only thing left is that in the future they do not find a way to apply provincial property taxes.
The Senate’s draft opinion on Personal Assets raises the rates for 2023 and the next 5 years, with respect to the average penalty for Deputies.
