Tax Amnesty Program in the 2024 Tax Reform

The Fiscal Measures and Relief Law No. 27,743 (the “2024 Tax Reform”) has introduced substantial changes in the Argentine tax regulations. Among the most notable changes is the creation of an assets regularization scheme, commonly known as a tax amnesty. This article summarizes its most relevant aspects.

• Individuals and undivided estates that are tax residents in Argentina as of December 31^st, 2023.
• Companies and other legal entities residing in the country.
• Individuals who were tax residents but lost such status as of December 31^st, 2023. Upon joining the tax amnesty program, they will recover the tax residency in Argentina as from January 1^st, 2024. (No assets or wealth increase occurring after losing the Argentine tax residency may be included in the tax amnesty program).

• Individuals who currently hold or have held public office in the last ten years.
• Family members of public officials, including first- and second-degree relatives (ascendant or descendant) by consanguinity or affinity, collateral relatives, spouses, and domestic partners.
• Bankrupt individuals, individuals convicted of crimes with a final court ruling in second instance, prosecuted under Law No. 25,256 (Section 6) and related provisions.

Until April 30^th, 2025. The Executive Branch may extend it through July 31 ^st, 2025.

• Step I: Submission of the application form and advance payment of at least 75% of the Tax (as explained below).
• Step II: Filing of a sworn statement identifying the assets, including the corresponding documentation and supporting records.
• Step III: Payment of the remaining Tax balance.

• To access the Tax Amnesty Program, a one-time “Special Regularization Tax” (the “Tax”) applies, to be calculated and paid in US dollars.
• Disclosure of assets up to US$ 100,00 will be exempt from the Tax. The Tax will be calculated on the total value of the regularized assets exceeding this amount.
  • If Step I is completed by September 30^th, 2024, and Step II by November 30^th, 2024, the tax rate will be 5%.
  • If Step I is completed by December 31^st, 2024, and Step II by January 31^st, 2025, the tax rate will be 10%.
  • If Step I is completed by March 31^st, 2025, and Step II by April 30 ^th, 2025, the tax rate will be 15%.
• If the case of cash disclosure, the Tax will be exempt if: (i) the money remains deposited in a bank account regulated by the Argentine Central Bank until December 31^st, 2025; (ii) certain acquired securities with the characteristics specified by the regulations are maintained until December 31^st, 2025.

• The taxpayer will not be prosecuted for unjustified increase in wealth arising from the assets disclosed.
• The taxpayer will be released from legal actions related to the collection of past taxes and from liability for tax, foreign exchange, and customs offenses.
• The taxpayer will be exempt from settling unpaid taxes for the fiscal periods prior to December 31^st, 2023.
• Partnerships and corporations will not be required to regularize the status of their partners and shareholders.

• If undisclosed assets are identified after the taxpayer has joined the program.
• Failure to pay the Tax in due time and form.

• Assets located in the country.
• Assets located abroad.
• Real estate registered to the name of a third party (specific requirements must be met).

Assets deposited in financial institutions or held by custody agents in countries that the Financial Action Task Force (FATF) classify as High Risk (“Black List”) or Under Intensified Monitoring (“Gray List”). Cash assets located in those countries do not qualify for the tax amnesty program either.

In our opinion, the Tax Amnesty Program will likely succeed among the small savers who, burdened by taxes in recent last years and unable to acquire dollars in the official market due to stringent foreign exchange regulations, have been forced to informalize part of their income and savings. Undoubtedly, this group of taxpayers will be drawn to the Tax Amnesty Program, especially given the absence of costs for disclosing assets valued under US$ 100,000.

The success of the Tax Amnesty Program among high net-worth individuals is more uncertain. The Government sought to make the program appealing with a staggered reduction in the personal assets tax and the promise of its future elimination. However, the 2016 tax amnesty program afforded the same opportunity, but the subsequent government reversed the tax cuts and introduced the wealth tax. These measures are still fresh in people’s memory, and the continuity of this new economic and political course remains uncertain. It will be up to the Government to regain people’s trust to ensure the success of this measure.