Fiscal Innocence: Government Proposes Changes to Expand Regime and Reduce Uncertainty

The national government sent Congress a bill to modify the Fiscal Innocence regime, with the aim of expanding the universe of taxpayers and providing greater legal certainty. The initiative, presented by Economy Minister Luis Caputo and the Legal and Technical Secretary of the Presidency, María Ibarzabal Murphy, introduces changes to Law 27,799, which came into effect on January 2 of this year and created a simplified Income Tax regime for individuals and undivided estates.

The Pillars of the Reform: More Taxpayers and Less Risk

According to the Ministry of Economy in an official statement, the bill eliminates the income and asset requirements that currently limit access to the simplified regime. Today, to join, taxpayers must meet three conditions: annual income not exceeding one billion pesos, total assets not exceeding ten billion pesos, and not being considered «Large Taxpayers» by ARCA. The new wording eliminates these caps, which would allow any resident individual or undivided estate to opt for this modality.

However, «Large Taxpayers» may join the simplified regime but will not enjoy the benefits of the presumption of accuracy or the liberating effects. This distinction was highlighted by Minister Caputo in the press conference: «The spirit of the law does not change at all. The goal remains that those savings can be formalized in the banking system without any penalty of any kind.»

Breaking the Presumption: A Minimum Threshold to Protect the Taxpayer

One of the most sensitive points of the current regime is the possibility that ARCA challenges tax returns and breaks the presumption of accuracy if it detects relevant inconsistencies. The current law establishes that if the challenge results in an increase of 15% or more over what was declared, the presumption automatically falls. The bill introduces a minimum threshold: even if that percentage is exceeded, the presumption is maintained if the nominal difference claimed does not reach the equivalent of 5% of the evasion amount provided for in Article 1 of the Criminal Tax Law. In concrete numbers, if the difference does not exceed five million pesos, the presumption is not broken.

Additionally, a mechanism is established for the taxpayer to rectify their tax return and pay the difference plus interest within up to 15 business days from notification of the official determination. This reduces the margin of uncertainty, as noted in La Nación’s editorial: «The margin of uncertainty for the taxpayer is reduced, who, if accepting such adjustments, will pay the resulting tax balance plus interest, thereby continuing to enjoy the benefits.»

Public Officials: No Benefits, but with the Possibility to Join

The bill also addresses the situation of public officials. According to the proposal, they may opt to join the simplified regime, but only for the purpose of determining the tax, without accessing the benefits of the presumption of accuracy or the liberating effect. This exclusion will apply from the enactment of the new law, so officials who have already joined and filed their tax returns will not be affected.

La Nación highlighted that this measure is more restrictive than that adopted during Mauricio Macri’s asset regularization, when a regulatory decree allowed relatives of officials to enter the program, which was later declared null by the Federal Justice. On this occasion, the bill does not mention direct relatives, spouses, cohabitants, parents, or emancipated minor children, which could be interpreted as a broader exclusion, although not explicit.

Mattress Dollars and Low-Intensity Monitoring

The current regime allows the externalization of so-called «mattress dollars» without the tax authority investigating their origin. The bill introduces changes in money laundering prevention, establishing low-intensity monitoring to promote the regularization of those funds. According to the Ministry of Economy, dollar deposits in the financial system are at record levels close to 40 billion dollars, but there is an amount more than four times that in savings outside the banking circuit. Caputo emphasized that «having dollars under the mattress is a very bad business» due to inflation in the United States, and that the formalization of these resources will benefit both individuals and economic growth.

Timeline of the Initiative

1. January 2, 2025: Law 27,799 on Fiscal Innocence comes into effect, creating the simplified Income Tax regime for individuals and undivided estates, on an optional basis.
2. First half of 2025: The Executive Branch receives observations from tax advisors about inconsistencies and legal gaps in the regulations, leading to the formation of a working group with tax experts.
3. Wednesday (date not specified): Minister Caputo and Secretary Ibarzabal Murphy announce in a press conference the submission of the amending bill to Congress, with the detailed changes.
4. Next steps: The bill has already received opinions from the Budget and Finance and Criminal Legislation committees of the Chamber of Deputies, and its consideration on the floor is expected. Approval is scheduled for a date after the deadline for filing tax returns, which is August 27.

La Nación warned that, given that approval of the legal text is scheduled after the deadline, it would be advisable for ARCA to postpone the deadlines and consider the situation of those who could not opt for the regime due to the parameters that are now eliminated.

What to Watch Closely

The key data to monitor is the date of consideration of the bill in the Chamber of Deputies and its eventual approval, since the postponement of deadlines and the application of new benefits for taxpayers who have not yet joined depend on it. It will also be relevant to observe whether modifications are incorporated during the parliamentary debate, especially regarding the scope of the exclusion of officials and the minimum threshold of five million pesos for the presumption of accuracy.