Economy Monotributo, Profits and Personal Assets: everything you need to know about the project presented by the government - Infobae

[All the Answers]

Monotributo, Profits and Personal Assets: everything you need to know about the project presented by the government - Infobae​

Source:

April 18, 2024

After having been withdrawn from the original Base Law project, the ruling party presented a new fiscal package with changes in 3 key taxes. Scales, aliquots and floors


According to the government project, category A monotributists, with lower incomes, could bill up to $6,450,000 annually. (Illustrative Image Infobae)

The Government sent the fiscal package to Congress, which includes a series of changes in the Monotax regime, in the Personal Property Tax and the reestablishment of the Income Tax for workers in a dependency relationship.


The initiative promoted by President Javier Milei contains 101 articles called the Law of Palliative and Relevant Fiscal Measures. In the recitals, the project argues: “The Argentine fiscal system registers one of the highest rates of fiscal pressure in the world when the formal sector of the economy is analyzed. The existence of numerous distorting taxes makes it difficult and marginalizes many individuals, companies and undertakings in the formal sector.”

Monotribute​

Regarding the monotributo , the Government's project involves an update of the billing and quota ceilings, with increases of between 300 and 330 percent. The annual income ceiling would be $68 million and eliminates the differentiation between activities (commerce and services) to be in the simplified regime. Also, the amounts of the entire scale and the amounts to be paid would rise.


If the project is approved, category A monotributists, with lower incomes, could bill up to $6,450,000 annually. For those who are in category K, the highest, the amount amounts to 68 million pesos.


In addition, there would be an increase in the amounts paid monthly by monotributistas in concept of the integrated tax, and in contributions to the retirement regime and social work. Likewise, the unit billing price is set at $385,000 for both those who offer services and those who sell products. And an annual update is established for inflation.


The new monotributo tables



The new monotributo tables

Income Tax​

The government included the reversal of Profits in the fiscal package after the elimination of the fourth category last September in Congress. Single employees with a gross salary of up to 1,800,000 pesos - which represents a net remuneration of up to $1,494,000 - are exempt from the tax. Meanwhile, the floor for married workers with two children would be $2,300,000

Regarding the aliquot scales, they will be more progressive and will range between 5 and 35 percent . The maximum rate will begin to apply from an income of $36,450,000. The sections of the scales would have an increase of between 32.07% and 150.73% and would then be adjusted by the Consumer Price Index (CPI), as well as personal deductions.

Personal property​

Among the main changes that the government seeks to make for personal assets is the elimination of the treatment of differential rates depending on the location of the assets (in the country and abroad).

Also, according to the report of the study by Lisicki, Litvin & Asociados , the modification of the progressive scales of the tax is proposed starting in the fiscal period 2023, with an initial rate of 0.50% and up to 1.50%, eliminating the last section of the scale for each period, until finally reaching the fiscal period 2027 with a single rate of 0.25%.” In turn, “the scales will be updated annually according to the CPI.

In addition, the project proposes a benefit for Compliant Taxpayers, that is, those who have complied with all of their obligations regarding Personal Assets for the fiscal periods 2020 to 2022 will have a reduction of 0.25% in the rate for the periods 2023 , 2024, 2025 and 2026. However, it should be noted that if the taxpayer adhered to the asset regularization regime, they could not be categorized as a compliant taxpayer.

The new values for the 2023 fiscal period would be:

• Non-taxable minimum: $100,000,000 (currently $27.3 million)
• Minimum for a residential home: $350,000,000

Regarding the scale, "an individual and voluntary regime is proposed that includes the payment in advance of the Personal Property Tax (ISBP) and any other property tax (whatever its name) that may complement or replace the ISBP for the periods 2024 to 2027″, the report indicated.

 

[Digital Nomad]

Since salaries are so low in Argentina it seems like very few workers there actually pay any income taxes? Is this correct? It's mostly the employers that are paying all the taxes?

 

[enbits]

Pay attention to the changes in 'monotributo' (simplified tax system):

As of today if you are a freelancer with monotributo an put more than ~1000 US$ monthly in your bank account you are subject to pay income tax (~35%). With these changes you can still remain in the monotributo and get a max of ~US$ 5.600 monthly (Category K) into your bank and you will have to pay 15% of monthly taxes (~US$ 840). For category H you can get a monthly income of ~US$ 3600 and pay 7% of monthly taxes (~US$ 280)

I would like to hear your opinions about this....

References:

• First row (A-K) are the different categories,
• Second row: total gross annual income
• Seventh row (Cuota Servicios): the monthly tax to be paid

 

[Betsy Ross]

Pay attention to the changes in 'monotributo' (simplified tax system):

As of today if you are a freelancer with monotributo an put more than ~1000 US$ monthly in your bank account you are subject to pay income tax (~35%). With these changes you can still remain in the monotributo and get a max of ~US$ 5.600 monthly (Category K) into your bank and you will have to pay 15% of monthly taxes (~US$ 840). For category H you can get a monthly income of ~US$ 3600 and pay 7% of monthly taxes (~US$ 280)

I would like to hear your opinions about this....

References:

• First row (A-K) are the different categories,
• Second row: total gross annual income
• Seventh row (Cuota Servicios): the monthly tax to be paid

View attachment 6016

Well this is the reason why so many people are in the black and also if they are declaring income it is much lower than it actually is. Before there wasn't much incentive at all to declare more and credit was largely unavailable. Now with mortgages and ability to get credit maybe more people will start declaring higher incomes but many locals only declare a small fraction of actual income. That is why you're seeing AFIP working so hard with banks and WU and everyone under the sun to report anyone moving around a lot of money.

Like other countries the goal is to get more people declaring income and paying more taxes.

 

[Vince]

Well this is the reason why so many people are in the black and also if they are declaring income it is much lower than it actually is. Before there wasn't much incentive at all to declare more and credit was largely unavailable. Now with mortgages and ability to get credit maybe more people will start declaring higher incomes but many locals only declare a small fraction of actual income. That is why you're seeing AFIP working so hard with banks and WU and everyone under the sun to report anyone moving around a lot of money.

Like other countries the goal is to get more people declaring income and paying more taxes.

Agree with you about many in black. I don't think this will quickly be changed. There are many people in the shadows and all cash. Still other countries are trying to move away from cash and everything digital. I think it will take Argentina a while for that to happen. Cash will be a big part of the way people pay for a while.

 

[Digital Nomad]

Pay attention to the changes in 'monotributo' (simplified tax system):

As of today if you are a freelancer with monotributo an put more than ~1000 US$ monthly in your bank account you are subject to pay income tax (~35%). With these changes you can still remain in the monotributo and get a max of ~US$ 5.600 monthly (Category K) into your bank and you will have to pay 15% of monthly taxes (~US$ 840). For category H you can get a monthly income of ~US$ 3600 and pay 7% of monthly taxes (~US$ 280)

I would like to hear your opinions about this....

References:

• First row (A-K) are the different categories,
• Second row: total gross annual income
• Seventh row (Cuota Servicios): the monthly tax to be paid

View attachment 6016

I keep hearing that many people here don't declare anywhere near their real incomes. Lots of people getting paid in cash too.

 

[enbits]

I keep hearing that many people here don't declare anywhere near their real incomes. Lots of people getting paid in cash to

Because of Argentina's eternal inflation and past governments slowness/incompetency is the reason why people need do everything with cash to avoid ridiculous taxation. 35% of taxes just for 1000US$ per month is nonsense.

 

[Digital Nomad]

Because of Argentina's eternal inflation and past governments slowness/incompetency is the reason why people need do everything with cash to avoid ridiculous taxation. 35% of taxes just for 1000US$ per month is nonsense.

I agree that is crazy! It is shocking to me talking to people I met here how much of the economy is in the shadows. It sounds like people want things to improve but no one here is accustomed to paying taxes. Will be a tough sell.

 

[greiger]

Finally, all the information related to the monotributo has been published in the Boletín Oficial after the fiscal package was approved. This was the final step to firmly establish this matter, ensuring that people who need to recategorize in July have the concrete and definitive information they need to do so.

Categorías monotributo 2024: así son las nuevas tablas y escalas | Tras la aprobación de la ley Bases y el paquete fiscal

Los contribuyentes en la categoría A, el escalafón más bajo del tributo, van a poder facturar hasta $6.450.000 anuales. En cambio, los de la categoría K, la más alta, van a tener un tope de $68 millones.

www.pagina12.com.ar

 

[enbits]

Finally, all the information related to the monotributo has been published in the Boletín Oficial after the fiscal package was approved. This was the final step to firmly establish this matter, ensuring that people who need to recategorize in July have the concrete and definitive information they need to do so.

Categorías monotributo 2024: así son las nuevas tablas y escalas | Tras la aprobación de la ley Bases y el paquete fiscal

Los contribuyentes en la categoría A, el escalafón más bajo del tributo, van a poder facturar hasta $6.450.000 anuales. En cambio, los de la categoría K, la más alta, van a tener un tope de $68 millones.

www.pagina12.com.ar

860 bucks monthly for services on category 'K' is 15%... it's a lot for self-employed workers. ;(

 

[Surfer]

860 bucks monthly for services on category 'K' is 15%... it's a lot for self-employed workers. ;(

This seems like it's some self-employment tax? I had heard that almost no one declares their true income. Is this not the case anymore?

 

[enbits]

This seems like it's some self-employment tax? I had heard that almost no one declares their true income. Is this not the case anymore?

'Monotributo' (may translate as 'Single Taxation') is a simplified tax regime for small businesses, entrepreneurs or self-employed / freelance workers. If you are subscribed to that regime you pay a monthly fee/tax according to the category (annual gross income) you are in.

If you are in Monotributo and you don't declare (meaning you don't create an invoice using AFIP invoice system) whatever gets into your LOCAL bank(s) account(s) you'll probably get a notification from AFIP, there are cases where your bank account may be freezed. Similar case if you are not in Monotributo and get large amounts of money into your local bank account.

If you have money abroad in a US bank account... that's harder to find for AFIP... maybe that's the 'people not declaring their true incoming' aspect you mentioned.
Another way of not declaring is by only accepting cash, buy dollars and keep them somehow safe at your home.

People don't declare their real income because the % of taxes in Argentina is too damn high!.

 

[Larry]

'Monotributo' (may translate as 'Single Taxation') is a simplified tax regime for small businesses, entrepreneurs or self-employed / freelance workers. If you are subscribed to that regime you pay a monthly fee/tax according to the category (annual gross income) you are in.

If you are in Monotributo and you don't declare (meaning you don't create an invoice using AFIP invoice system) whatever gets into your LOCAL bank(s) account(s) you'll probably get a notification from AFIP, there are cases where your bank account may be freezed. Similar case if you are not in Monotributo and get large amounts of money into your local bank account.

If you have money abroad in a US bank account... that's harder to find for AFIP... maybe that's the 'people not declaring their true incoming' aspect you mentioned.
Another way of not declaring is by only accepting cash, buy dollars and keep them somehow safe at your home.

People don't declare their real income because the % of taxes in Argentina is too damn high!.

View attachment 6603

Yes many people aren't all in white there. I have many realtor friends there and they just get paid under the table. When I bought my apartment the realtor gave me a choice to pay 21% to get an official invoice or waive the 21% and just get a simple receipt. Much of the economy is all underground in Argentina.

@enbits you are correct the taxes here are too damn high!