By Félix Rolando
(Chapter III of Title II of Law 27,799).
Through this new regime, individuals and undivided estates, who are residents of the country, may choose to file the simplified tax return (DJS) provided that during the 3 tax years prior to the option they concurrently comply with the following conditions:
- Income (taxed, non-taxed and exempt) <= $ 1,000 million.
- Wealth (in the country, abroad, whether taxed, non-taxed and/or exempt) <= $ 10,000 million.
- Not to have been considered as a Large National Taxpayer according to ARCA.
- Other requirements that may be established by the N.E.P. in the future.
It should be noted that the new optional regime includes all taxable income obtained by the taxpayer, and up to now there has been no restriction according to the source of the income.
The amounts referred to income and equity are restated¹.
The option can already be exercised for the tax year 2025, which will constitute the base period for the purposes of complying with the conditions established by the regime to access its benefits. Once the option is exercised, it is not mandatory to remain in the regime, and the taxpayer must opt annually for its continuation 2.
The new regime does not imply any change in the applicable income tax rules. In fact, all aspects related to the determination of taxable income, exemptions, imputation criteria, deductions, applicable rates, schedular tax, etc. remain as they are currently regulated by the current regulations, without any change whatsoever. When a taxpayer opts for the new DJS regime, the resulting income tax must be equivalent to that determined under the general regime for filing the tax return.
The benefits of this DJS regime do not derive from the income tax itself, but from procedural aspects.
They shall be adjusted annually as from January 1, 2027, considering the annual variation of the purchasing value unit (UVA), operated between the months of January to December of the calendar year immediately preceding the adjustment day.
2. Even if the DJS has been chosen, if a sworn statement is filed under the general regime, it would be considered as a tacit waiver of said option.
1. Content and modality of the new simplified DJ.
As it happens in the traditional general regime, the new DJS constitutes a modality of “self-declaration” of the tax obligation, making the declarant responsible for the tax based on it or resulting from it, thus granting a stability in favor of the tax authorities, since it cannot be reduced by subsequent declarations 3.
The new DJS consists of a sworn statement preloaded by ARCA based on the information available in its systems and that provided by the taxpayer and/or third parties, and the taxpayer may modify and confirm such information and then file the corresponding tax return.
The information to be considered by ARCA for the purpose of preloading the DJS will be exclusively the following:
- gross income of the base period, from Argentine and foreign sources. In order to determine the amount of income and its allocation to the base fiscal year, the relevant income tax rules must be applied.
- Eligible deductions, in accordance with the law mentioned in a).
With respect to the deductions mentioned in b), it is to be expected that most of them are not “precharged” but end up being recorded by the taxpayer, who not only knows of their existence, but their determination generally requires certain calculations that are recorded in working papers (adjustment for tax inflation, real maintenance expenses, cost of sales of goods, etc.).
One of the most noteworthy aspects of this new modality is that taxpayers will not have to declare the assets and debts they may have as of December 31, both in the country and abroad, and consequently, since the corresponding variations in assets between the beginning and the end of the fiscal year (as reported in the general regime) are not considered, it is impossible to determine the amount consumed, which is why there is no obligation to report this last concept either.
In this way, taxpayers will only declare through the DJS, the gross income and deductions allowed, and the system will determine and settle the corresponding tax.
Does this mean that it would no longer be necessary to analyze the variations in net worth and the annual amount consumed? The fact that there is no obligation to declare it does not imply that it should not be analyzed. Indeed, in our opinion, due to the characteristics of the tax, which is applied on taxable income, in order to validate the determination of the tax, it is necessary to consider other income and expenses that are not subject to the tax, as well as changes in net worth and other non-deductible expenses, thus resulting in the weighting (by difference) of the amount consumed, an analysis that finally allows validating all the elements of the equation.
It should also be taken into account that, regardless of the benefit of the presumption of accuracy provided by the regime, it does not reduce in the least the powers of inspection and control of the tax authority, so that the taxpayer would be obliged to check its assets and consumption situation before tax inspections, in the appropriate cases, either by ex officio exclusion from the DJS regime or by detecting a significant discrepancy, as will be discussed below.
On the other hand, we must also consider that the exemption and benefits of this new optional regime are limited exclusively to income tax (and VAT), and do not extend to other national and provincial taxes, so that in a possible inspection it could be necessary to expose the full situation of the taxpayer to prove the reasonableness in the determination of the tax being audited.
3. Unless the exceptions set forth in Article 13 of Law 11.683 are applicable.
2. Conditions and benefits
In order to obtain the benefits of the DJS regime, the taxpayer must comply concurrently with the following conditions:
- Exercise the option with respect to the corresponding base period (must be done every year).
- Submit the DJS (modifying and/or accepting the information) to determine the corresponding tax.
- Pay on time: that is to say, pay on the established due date (prior presentation of the DJS) or regularize the balance on said date through an authorized payment plan.
Once these requirements are met, the taxpayer will enjoy, in the first place, the discharge effect of the payment, considering that the income tax obligations for the tax period in question have been satisfied both from a formal and material point of view. Strictly speaking, beyond the express mention made in the law (welcome), this benefit generally applies when any taxpayer files the tax return (whatever it may be) and pays the balance in favor of the tax authorities (even if the capital is not paid on its due date, but is paid later with the corresponding interest).
But the most outstanding benefit, without any doubt, is the presumption of accuracy. Indeed, upon compliance with the aforementioned requirements, the accuracy of the income tax returns (DDJJ) filed for income tax, and also for VAT, corresponding to the periods not prescribed, will be presumed, without admitting proof to the contrary.
The benefit, as described above, constitutes a real blocking of the taxpayer’s tax situation, since (in principle) the tax authorities will not be able to challenge the accuracy of the corresponding DDJJ, and therefore, demand any adjustment from the taxpayer.
This benefit would seem to be more than enough to decide to exercise the option and file the tax return through this method (for those who are authorized to do so), especially if we also consider the exemption of declaring the net worth situation and the amount consumed per year.
3. Loss of benefits
However, there is no happiness that is eternal or free of concessions. Although it is a presumption of accuracy that does not admit of proof to the contrary, in reality there is an exception, in which the presumption lapses upon the existence of a “significant discrepancy”. In other words, it would be a presumption iure et de iure, but it is reversed upon the existence of a significant discrepancy in the future. In other words, the presumption applies upon the existence of certain data (option, filing of the DJS and payment on time), and so it will be until the possible existence of a significant discrepancy.
Therefore, in the event of a significant discrepancy, both benefits are lost: the effect of the payment in discharge of the payment and the presumption of accuracy.
We emphasize that the cause for loss of benefits must consist of a “discrepancy” but, in addition, it must be “significant”. Both conditions must be verified.
The “discrepancy” will originate when the tax authority detects that the DJS submitted omitted income, or improper deductions and/or use of apocryphal invoices were computed.
In order to determine the omission of income, the gross income accrued or received, as the case may be, that should have been declared in the base tax period must be considered, in accordance with the current regulations applicable to the legal provisions of the tax, but it is expressly established that, for these purposes, the variation in net worth that may have occurred in the base tax period or later with respect to income originated in tax periods prior to those, including bank deposits, registrable goods and other goods, will not be considered. In other words, income that could be related to variations in net worth will not be taken into account for the purpose of determining omission of the same.
With respect to the computation of an improper deduction, not only must be considered those that correspond according to income tax rules, but it also includes any deduction made from the balance to be paid (for example, computation of improper withholdings).
It is necessary to point out that the significant discrepancy must be verified with respect to the base tax period. In this respect, “base tax period” is understood4 as the “…tax period in which the taxpayer, having exercised the option to join the Regime or ratified the permanence in it, has filed the Simplified Income Tax Return and complied, if applicable, with the payment of the tax in due time…”.
On the other hand, the new tax period for which the taxpayer expresses its will to remain in the regime and files the DJS and, if applicable, makes the payment on time, is considered as a new base period.
These definitions allow concluding and highlighting that significant discrepancies must be detected with respect to the corresponding base tax period, which will change with the new option and filing of the DJS made by the taxpayer, and consequently, the tax authorities would have a limited time (one year) to detect the significant discrepancy.
Indeed, in the first exercise of the option, for example, the base tax period will be the year 2025, but if the taxpayer chooses to file the DJS for the year 2026 (paying on time) the base period will change (it will then be 2026), and from that moment on, even if the tax authorities detect a significant discrepancy with respect to the tax year 2025, since the latter is not the base period, such discrepancy will not alter the benefits of the regime. In order to do so, the tax authority would have to detect a significant discrepancy with respect to the new base period, which would be 2026.
Moreover, the discrepancy must be “significant”. It is understood that the discrepancy is significant when at least one of the following conditions is verified:
- If the challenge made by ARCA results in an increase of the balance payable (or, if applicable, a reduction of losses) by a percentage not lower than 15%, with respect to the amount declared by the taxpayer.
- If the difference between the declared tax and the challenged tax is greater than $ 100.000.0005.
- If the challenge made by ARCA is due to the use of apocryphal invoices and other apocryphal documents. However, this condition will not be fulfilled if the taxpayers rectify the contested affidavit and pay the tax difference plus interest.
For the purposes of determining the significant discrepancy,the burden of proof falls exclusively on ARCA, which for these purposes shall only consider the information declared by the taxpayer and that available in its systems or provided by third parties. The burden of proof has been reversed, since as long as the tax agency fails to prove the discrepancy with sufficient evidence, the presumption of accuracy will continue to apply.
Regarding the causes mentioned in a. and b., the difference will not be considered if it is regularized spontaneously through the filing of a corrective DJ, prior to the notification of the intervention order, without requiring that such tax difference must be paid at the time of filing the respective presentation.
Regarding the cause mentioned in c., the difference will not be considered either, if the corresponding rectifying affidavit is filed before the notification of the administrative act of ex officio determination, although in this case the payment of the capital plus the corresponding interest is required.
In short, the three aforementioned causes could be corrected through the recognition of the differences, by filing the corresponding rectifying affidavit, within the indicated deadlines.
On the other hand, it should also be noted that, for purposes of assessing whether or not the “administrative discrepancy” exists, with respect to VAT and income tax, the presumption of unjustified increase in net worth provided for in subsection f) of article 18 of Law 11.683 and its amendments6 will not be applicable. It must be understood then that in those cases in which assets not declared by the taxpayer (totally or partially) or fictitious debts declared for their justification are detected, such detected differences in net worth will not be considered for these purposes, and, therefore, the benefit of the presumption of accuracy will remain unalterable. We understand that, in practice, this rule plays in favor of the possible use of the money “under the mattress “7 without running risks.
In the event that the benefits of the DJS regime are lost, not only will the DJS of the base year be challenged, but ARCA may extend the verification and/or audit to the periods not prescribed, and if applicable, determine ex officio the taxable matter, applying the corresponding penalties.
However, this extension of audits will not be applicable with respect to taxpayers who:
- They have opted for the DJS in a certain tax period (as long as they have complied with the conditions set forth), since they will continue to enjoy, with respect to the periods not prescribed, the dischargeable effect of payment and presumption of accuracy, when in a subsequent tax period they are not covered by such modality. It should be noted that this exception would then apply with respect to a tax period in which the taxpayer is no longer included in the simplified modality (for having been excluded or not complying with the parameters). This is another benefit of the regime, since the release from payment and presumption of accuracy of the tax periods filed under the DJS regime would not be altered by an adjustment to be made in a subsequent tax period in respect of which the taxpayer files its tax return under the general regime.
- Have adhered to the regularization regime Law 27,743 (art. 34) for the periods included therein, having complied with all the provisions set forth in said legal regulation.
4. Article 7 of the Annex to Decree (P.E.N.) No. 93/2026.
Amount set forth in Article 1 of Law 27,430.
6.Article 41 of Law 27,799.
7. Expression that generally refers to money that is stored in homes, safety deposit boxes or undeclared foreign bank accounts.
4. Partial shielding of the benefited taxpayer
This new modality should not be assimilated in any way to a regularization regime (laundering), since the purpose of these regimes is that the subjects reveal the existence of assets that have been hidden and marginalized from the formal circuit, and for this purpose, they are expressly released from all taxes that may have been omitted in a timely manner and are related to the assets that are regularized, their accessories and penalties that may apply.
On the other hand, this new DJS regime involves a more lax presentation of the content, which simply frees the taxpayer from the obligation to report its assets and amounts consumed, granting the aforementioned benefits.
The current tendency to assimilate this regime to money laundering is due to the fact that upon detection of undeclared assets by the taxpayer (or fictitious liabilities invented for their justification), the tax authority could not apply the presumption of unjustified increase in net worth (subsection f) of section 18 of Law 11.683) in order to assess whether there is a significant discrepancy, which somehow “shields” the taxpayer with respect to the detected assets. In other words, the detection in itself of an undeclared (hidden) asset would not have any consequence whatsoever with respect to the payment releasing effect and presumption of accuracy of the tax periods filed through the new regime (applicable to Income Tax and VAT); for example, if the tax authority were to detect an undeclared asset, it would take it into account to make an adjustment in the personal assets tax.
However, these benefits could be rendered ineffective when there is a significant discrepancy between the information declared and the information available in the systems or provided by third parties, not related to the existence of assets.
In other words, the guarantee is not full, as opposed to a laundering, where there is a guarantee that the taxes omitted for the assets disclosed will not be demanded.
It is important to point out that, on the one hand, the control and supervision powers of the agency remain full and in force, even for the taxpayers that opt for this new regime. On the other hand, although the application of the presumption of unjustified capital gain is prohibited, as mentioned above, there are other legal presumptions, and it is worth analyzing whether they could be applied in order to determine the omission of income or deductions that are not allowed.
Is it possible that ARCA can apply these other presumptions, for purposes of determining a significant difference and rebutting the presumption of accuracy in income tax and V.A.T.? We understand that this is not possible.
In order to reach such conclusion we consider what is expressly established in the regulations of the regime8, when it is stated: “In all the above mentioned cases, as provided in the first paragraph of Article 40 of Law No. 27,799, the burden of proof shall fall exclusively on the AGENCY OF CUSTOMS COLLECTION AND CONTROL (ARCA), which shall consider for such purpose, only the information declared by the taxpayer and that available in its systems or provided by third parties.
Last paragraph of Article 11 of the Annex to Decree (P.E.N.) No. 93/2026.
According to this provision, ARCA could not use presumptions, since it must only consider the information “declared by the taxpayer and that available in its systems or provided by third parties, and although the determination of adjustments in taxes through the application of presumptions are based on certain certain data (indications), the derivation of the inferred (presumed) fact would not constitute “information” declared by the taxpayer itself, nor available in the system or provided by third parties.
This conclusion would be reinforced by the aforementioned provision, which places on the tax authority “the burden of proof”, which makes it impossible for the tax authority to obtain information through the aforementioned legal presumptions, the application of which would imply the opposite, since it would be the taxpayer who would be obliged to provide the necessary evidence to reverse the applicable presumption.
This interpretation would imply in practice the inapplicability by ARCA of the remaining presumptions of article 18 of the tax procedure law (LPT)9 , for the purpose of determining the significant differences, and to make the presumption of accuracy in the income tax and V.A.T. tax returns lapse, notwithstanding, we emphasize that the legislator only limited the non-application of the presumption provided in subsection f) of said article.
In conclusion, we understand that the presumption of accuracy (which in principle does not admit proof to the contrary) could not be rebutted by the possible existence of “significant discrepancies” obtained through the legal presumptions of article 18 of the LPT.
However, it should be noted that the aforementioned presumptions could be applied and have effect with respect to other taxes that are not covered by the presumption of accuracy (personal property tax, excise tax, etc.).
5. Detection of a significant discrepancy in the existence of the reporting regimes established by ARCA
Taking into account that, for the purpose of determining a significant discrepancy ARCA must consider only the information declared by the taxpayer and that available in its systems or provided by third parties, it becomes extremely important to know what type of information ARCA receives and holds in its systems.
In this regard, it should be noted that ARCA concentrates a great deal of comprehensive information on taxpayers in its systems, from their own returns filed by them, as well as from third party information systems, internal cross-checks and data from other agencies, and data obtained during their own audits.
Broadly speaking, the information available in the ARCA systems could be grouped as follows: a) Taxpayer’s own DDJJ (VAT, Income Tax, Personal Property, Monotax, Social Security (F.931, employees, social security contributions), Internal Taxes and other specific taxes, payment plans, payments, compensations and balances; b) Banking and financial information; c) Labor and social security information (employers and employees); d) Wealth information (real estate, motor vehicles, corporate shares, etc.); e) Commercial and economic transactions (commercial and economic operations, etc.); f) Tax returns of the taxpayer (VAT, income tax, personal property, social security taxes, etc.).e) Commercial and economic transactions (electronic invoicing issued and received, purchases and sales reported by third parties, exports and imports (customs), services rendered or received from abroad, payments to foreign beneficiaries and withholdings; f) Auditing information (inspection adjustments, risk profiles and internal alerts).
However, it should be noted that, for purposes of determining the existence of a significant discrepancy, only information related to: a) income, b) computation of improper deductions and/or, c) use of apocryphal invoices should be considered, since these are the only grounds established by law to give rise to the detection of a significant discrepancy.
Therefore, as we have already stated, upon detection of a hidden asset, since it is not related to the concepts mentioned above, there would not be a significant discrepancy, notwithstanding that by express provision of the law, for these purposes ARCA could not apply the presumption for unjustified capital gains. Therefore, all the information held by ARCA on property holdings of taxpayers who have opted for this new regime would be irrelevant and would not constitute a “significant discrepancy” that would affect the benefits of the discharge of payment and the presumption of accuracy.
The information that is relevant for the purpose of verifying whether there could be a significant discrepancy is that related to income, deductions or use of apocryphal invoices, which should be analyzed in each particular case, also considering that the burden of proof will be on the tax authority.
9. Law 11,683.
If you have any questions or comments, feel free to share them with us:
Felix Jose Rolando
Tax Partner
felix.rolando@ar.Andersen.com