2023-11-13-KPMG_Global-Argentina_–_Income_Tax_Calculations_Are_Changing_4页_339kb

Argentina has introduced changes to its income tax calculations for the 2023-2024 fiscal periods aimed at reducing the number of taxpayers. For the October-December 2023 period, a simplified two-group system replaced the previous three-group structure based on salary levels. The threshold was set at 15 federal minimum wages (FMW) monthly (ARS 1,980,000), with no withholding for earnings below this level. Higher incomes require cumulative calculations since October, with a maintained 35% marginal rate.

For 2024, Law 27,725 establishes a "cedular" tax for recipients of certain high incomes, such as public office work, dependent employment, or pensions if annual earnings exceed 180 FMW (equivalent to ARS 28,800,000). This tax has rates from 27% to 35% and is applied separately, with no addition to other income sources, and is final withholding. This category excludes some individuals, such as board members.

These changes impact payroll calculations and the tax burden. Companies must review their payroll processes for compliance, especially for employees who may be taxed under general rates or newly classified under "cedular" tax. Employers may need to adjust calculations timely to meet requirements.