Around 800,000 employees who are currently subject to income tax will see changes as determined by Congress in recent fiscal legislation. However, these changes will not retroactively affect their earnings. This means that they will not have any deductions for the income received in June, which was paid in July. Instead, the new tax implications will come into effect from their August salary.
The Federal Administration of Public Revenues (AFIP) has officially outlined the modifications regarding income tax for salaried workers. According to AFIP, these changes will apply to salaries earned and received from July onward. This effectively means that wages received until June will not be subjected to the new tax rules, even if they are received later. AFIP clarified that workers who received their pay up to June 30, regardless of when they received it, will be taxed under the previous regulations. Conversely, payments made from July 1 onwards will be governed by the new guidelines.
AFIP acknowledged that the approach taken for these changes differs from the usual practice of adjusting tax withholding based on when income is received. This adjustment was made specifically to benefit the workers. The agency also provided details on how the changes would impact the calculation of the Annual Complementary Salary (SAC), commonly referred to as the "aguinaldo" in Argentina. Retention agents have two options for calculating this: they can either sum the amounts actually paid during the SAC payment months or calculate monthly payments and adjust them during the annual settlement.
Starting in July, the mechanisms for calculating tax withholdings will also change. For income earned from July 1 to August 31, 2024, the original amounts stipulated by the recent legislation will apply. Moreover, in September, there will be a special update to the personal deduction amounts and the tax scale, based on the Consumer Price Index (CPI) fluctuations recorded from June to August 2024.
The AFIP also highlighted that from the publication of the new rules, the online service SIRADIG-TRABAJADOR will be available for individuals to manage their tax information. Additionally, beginning in 2024, the requirement to submit an informational income tax declaration for the fiscal year ending 2023 will be eliminated as part of AFIP’s ongoing efforts to simplify tax processes.
For those who want to estimate the impact of these changes on their salaries, a tool has been created to help gauge the tax deductions following the new regulations. You can access the calculator here.
The modifications enacted by Congress have raised the non-taxable minimum to 1,800,000 Argentine pesos for single individuals and 2,200,000 pesos for married individuals with children. As a result, approximately 800,000 workers who were previously exempt under the prior administration will now be subject to taxation, with rates ranging from 5% to 35%.
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