On July 8, 2024, the Official Gazette published Law 27,743, also known as the “Law on Palliative and Relevant Tax Measures” (“Tax Law”).

The Tax Law mainly regulates the following aspects:

I. EXCEPTIONAL REGULARIZATION REGIME FOR TAX, CUSTOMS, AND SOCIAL SECURITY OBLIGATIONS (“THE REGIME”)

The Regime applies to tax, customs, and social security obligations due up to and including March 31, 2024, as well as to any infractions committed by that date, regardless of their connection to those obligations. This application extends for a period of 150 days from its regulation.

Exclusions under the Regime include contributions to the National System of Social Works, debts for quotas to Labor Risk Insurance Companies (“ART”), contributions to special social security systems for domestic service employees and private housekeepers, individuals convicted with a final sentence for crimes under the Customs Code, Criminal Tax Regime, or Criminal Code, as well as persons declared bankrupt.

The Regime includes a reduction in compensatory interest rates, which vary depending on the timing and method of adherence. Additionally, it includes a total waiver of fines and the suspension and extinction of
criminal actions.

Regarding the payment plan, taxpayers may choose from 36, 48, 60, or 84 monthly payments, depending on their classification. In all cases, an initial payment of between 15% and 25% of the consolidated debt is required.

II. ASSET REGULARIZATION REGIME

The Tax Law establishes an extensive “Asset Regularization Regime” that applies to residents in Argentina based on assets existing as of December 31, 2023. Residents can participate in this regime, covering assets both within Argentina and abroad, including domestic and foreign currency, real estate, stocks, ownership in companies, securities, credits of any kind, cryptocurrencies, crypto assets, and similar holdings.

Adherence to the Asset Regularization Regime is permitted until April 30, 2025, extendable to July 31, 2025. It establishes three stages for declaring assets, applying a Special Regularization Tax with rates of 5% in Stage 1, 10% in Stage 2, and 15% in Stage 3 of the total amount declared. Payments are calculated and made in U.S. dollars, with a 0% Special Regularization Tax rate for amounts up to the equivalent of US$100,000.

Exclusions from the Asset Regularization Regime include public officials, their immediate family members, and individuals convicted of certain crimes.

The cash deposited in a “Special Regularization Account” will not be subject to taxation if held there until December 31, 2025.

Key provisions include: (i) exemption from the concept of “unjustified wealth increase” under Procedural Tax Law 11,683; (ii) immunity from civil actions and from tax, exchange, customs, and administrative penalties arising from non-compliance with obligations related to declared assets’ origins; and (iii) exemption from taxes that were omitted and originated from declared assets, such as Income Tax, VAT, Personal Assets Tax, Extraordinary Solidarity Contribution, Internal Taxes, and Tax on Debits and Credits.

III. AMENDMENTS TO THE PERSONAL ASSETS TAX

A progressive reduction in the Personal Asset Tax (“PAT”) rates is established for fiscal years 2023 to 2027. The maximum tax rate will decrease gradually from 1.50% in 2023 to a unified rate of 0.25% by 2027, eliminating the higher tax rate for assets located abroad and standardizing rates for both domestic and foreign assets.

Taxpayers who fully comply with their PAT obligations for the tax periods 2020 to 2022 will benefit from a 0.50% reduction in their tax rate for the years 2023, 2024, and 2025.

Additionally, the PAT Law is amended to increase the minimum exemption to $100 million for general assets and $350 million for primary residences.

IV. SPECIAL REGIME FOR PAYMENT OF PERSONAL ASSETS TAX (“REIBP”)

A new optional advance payment regime for the periods from 2023 to 2027 applies to Argentine tax residents as of December 31, 2023, or to those who were tax residents in Argentina before that date.

The REIBP covers the PAT and any other national wealth taxes that may supplement or replace it from 2024 to 2027. Taxpayers can opt into the REIBP until July 31, 2024, with a possible extension by the Executive
Branch until September 30, 2024.

Participants in the REIBP will consolidate their PAT payments for the tax periods 2023 to 2027and will be exempt from wealth taxes until 2027, with tax stability until 2038.

The tax base is calculated by taking the taxpayer’s assets as of December 31, 2023, and applying a multiplier of 5 to determine the taxable amount for PAT.

The tax rate is 0.45% for fiscal period based on the taxable base as of December 31, 2023.Those who have adhered to the Asset Regularization Regime may join the REIBP and pay taxes for the periods 2024 to 2027, applying a 0.5% rate on the total value in pesos of the regularized assets.
An initial prepayment of at least 75% of the total PAT is due by March 31, 2024.

Additionally, taxpayers who have fulfilled their obligations for the PAT from 2020 to 2022 will enjoy a 0.50% reduction in the applicable tax rate for the tax periods 2023, 2024, and 2025.

V. TAX ON THE TRANSFER OF REAL ESTATE OF INDIVIDUALS AND UNDIVIDED ESTATES

The tax is repealed with effect from the date of publication of the law in the Official Gazette.

VI. AMENDMENTS TO INCOME TAX

The income tax law has been subject to substantial amendments, highlighting the following significant changes:

The reinstatement of Income Tax is effective upon publication but is retroactively applied from January 1st, as is an annual exercise tax. To mitigate potential tax liability increases for the months elapsed in 2024, a special deduction has been introduced.

The minimum salary is $1,800,000 for single employees and $2,340,000 for married employees.

Personal deductions have been updated, and progressivity has been introduced for the 2024 period in the scale applicable to individuals, where rates range from 5% to 35% on increased net income.

Starting in fiscal year 2025, biannual adjustments in January and July will be made based on the Consumer Price Index (CPI) for personal deductions and the progressive tax scale. Moreover, there will be a special adjustment in September 2024 to reflect CPI changes from June to August 2024.

Other Amendments:

• Implementation of changes in the calculation of tax losses.
• Repeal of exemptions he “Cedular Tax on Higher Incomes” of Law 27,725.
• Repeal of exemptions on overtime hours, productivity bonuses, and mandatory shifts, among
  others.
• Introduction of specifics regulations regarding the regime for workers in the oil industry.

VII. SIMPLIFIED REGIME FOR SMALL TAXPAYERS

The parameters for qualifying for this regime have been updated, with adjustments to the annual billed income scale.

IX. OTHER MEASURES.

• Introduction of the Consumer Tax Transparency Regime, requiring the separation of the net price from
  applicable taxes on invoices issued to final consumers.
• Increase in the cap on mining royalties to 5% for new projects.