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July 31, 2023
2023-1336

Argentine Tax Authority establishes a new corporate income tax prepayment

  • The Resolution establishes a new "income tax prepayment" for companies that meet certain conditions.
  • The income tax prepayment is creditable against the corporate income tax liability for fiscal year 2023 or 2024.
  • Taxpayers should consider their facts and circumstances when assessing the new income tax prepayment and determining if they are subject to the rules.

On 21 July 2023, the Argentine Tax Authority (AFIP) published General Resolution No. 5391/2023 (the Resolution) establishing a one-time corporate income tax prepayment for companies that have obtained extraordinary income derived from the general context.

General Resolution No. 5391

The Resolution establishes that the "income tax prepayment" would apply to companies that meet the following requirements:

  • The net taxable income determined for fiscal year 2022 or fiscal year 2023, before the deduction for accumulated tax losses, is at least AR$600m1 (approximately US$2.2m).
  • No income tax has been determined for fiscal year 2022 or fiscal year 2023.

The Resolution excludes from the "income tax prepayment" entities that obtained an income tax exemption certificate valid for fiscal year 2022 and fiscal year 2023.

For purposes of determining whether the above thresholds are met, the Resolution clarifies which tax years taxpayers must take into account:

  • Fiscal year 2022, when the year-end occurred from 1 August to 31 December 2022
  • Fiscal year 2023, when the year-end occurred from 1 January to 31 July 2023

The amount of the income tax prepayment is determined by applying 15% on the net taxable income of the previous fiscal period, without considering the deduction of accumulated tax losses.

The income tax prepayment will be creditable against the corporate income tax liability determined in the following fiscal years:

  • Fiscal year 2023 for taxpayers with a year-end from 1 August to 31 December 2022
  • Fiscal year 2024 for taxpayers with a year-end from 1 January to 31 July 2023

The income tax prepayment is payable in three equal and consecutive monthly installments and the due dates will depend on the month of the year-end, starting on 22 August 2023.

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For additional information with respect to this Alert, please contact the following:

Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

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ENDNOTE

1 AR refers to Argentinian pesos.

 

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