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Through General Resolution No. 5,525, published in the Official Gazette on 16 July 2024, the Federal Tax Administration ("AFIP" in Spanish) has established the operational aspects for implementing the Exceptional Regularization Regime of Tax, Customs and Social Security Obligations for tax, customs and social security obligations due through 31 March 2024 ("Moratoria" in Spanish), established in Title I of Law No. 27,743 (Tax Package). For additional background, see EY Global Tax Alert, "Argentina enacts Bases Law and Tax Package," dated 8 July 2024

Concepts included

All tax, customs and social security obligations that the AFIP is responsible for collecting through 31 March 2024 may qualify, including those in the course of administrative or judicial discussions, as long as the taxpayer agrees or desists and renounces any recovery actions. Infractions committed up to 31 March 2024, whether or not related to those obligations, may also be included.

Further, withholding ("retenciones" in Spanish) and reverse withholding ("percepciones" in Spanish) obligations of collection agents who have neglected to apply withholdings, or have withheld amounts that they have not remitted by the due date, may also be included.

Excluded concepts

Interest and fines cannot be included for contributions to: the National Health System ("Sistema Nacional de Obras Sociales" in Spanish), the special regime for domestic workers, Labor Risk Insurance Companies ("ART" in Spanish), or Simplified Regime for Small Taxpayers installments ("Monotributo" in Spanish).

Bankrupt taxpayers and those prosecuted and/or convicted cannot apply for the regime, in certain cases.

Benefits

The total cancellation of the debt included in the regime will result in the forgiveness of 100% of the applicable fines, the extinction of the criminal action on those obligations, and the forgiveness of up to 70% of the compensatory and/or punitive interests, depending on the date of application to the regime and the chosen payment method.

Application and payment methods

Those interested in applying to the regime may do so until 13 December 2024.

Depending on the date of the application and the type of taxpayer, different payment methods and benefits are contemplated, as follows:

1. For applications made by 15 August 2024 for which the taxpayer's obligations are paid in cash or in three monthly installments, the total fines and 70% of the compensatory and punitive interest will be forgiven.
2. For applications made between 16 August and 14 September 2024, accompanied by payment in cash or in three monthly installments, the total fines and 60% of the compensatory and punitive interest will be forgiven.
3. For applications made between 15 September and 14 October 2024, accompanied by payment in cash or in three monthly installments, the total fines and 50% of the compensatory and punitive interest will be forgiven.

At the taxpayer's option, payment plans with longer terms are available. Their conditions and benefits vary depending on the date of application to the regime:

4. For applications made up to 14 October 2024, prepayment of 25% of the total debt is required, and the remaining balance must be paid in a maximum of 36 monthly installments (total fines and 40% of compensatory and punitive interest will be forgiven).
5. For applications between 15 October and 13 December 2024, 25% of the total debt must be prepaid and the remaining balance paid in a maximum of 36 monthly installments (the total fines and 20% of the compensatory and punitive interest will be forgiven).

If the taxpayer is an individual or a micro, small or medium enterprise ("MiPyME" in Spanish), the prepayment for the cases described in (4) and (5) may be reduced up to 15%, and the payment plans may be extended up to 84 installments, depending on the case.

The interest rate for monthly installments will be variable and will be calculated as a percentage of the interest rate established by the Banco de la Nación Argentina for commercial discount operations (general portfolio rate), depending on the type of taxpayer. For legal entities, this percentage will be 130%, although it may be reduced to 90% in the case of MiPyMEs.