On 28 September 2023, the Argentine Federal Tax Authority (AFIP) released General Resolution No. 5424/2023 (the Resolution), introducing a new income tax prepayment requirement for companies primarily engaged in “Financial Intermediation and Insurance Services” or registered as payment service providers.
According to the Resolution, companies that satisfy both of the following conditions are obligated to make income tax prepayments:
- These entities primarily engage in Financial Intermediation and Insurance Services or operate as registered payment service providers.
- They must have a taxable income of at least AR $600 million (approximately US$1.7m) for fiscal year 2022 or 2023.
The Resolution exempts entities subject to income tax prepayment under GR 5391/20232 and those that hold an income tax exemption certificate from the new income tax prepayment requirements. The Resolution also mentions the tax years taxpayers must consider to determine the thresholds are determined as mentioned above, mainly,
- Fiscal year 2022, when the year-end occurred between 1 August and 31 December 2022
- Fiscal year 2023, when the year-end occurred between 1 January and 31 July 2023
The income tax prepayment amount is calculated by applying a 15% rate to the net taxable income of the aforementioned fiscal years. This calculation does not consider any accumulated tax losses that may be deducted. The income tax prepayment will be applied as a credit towards the corporate income tax liability as calculated in the following fiscal years.
- Fiscal year 2023 for taxpayers with a year-end between 1 August and 31 December 2022
- Fiscal year 2024 for taxpayers with a year-end between 1 January and 31 July 2023
The income tax prepayment will be divided into three equal monthly installments consecutively. The due dates will vary depending on the month of the fiscal year-end. For instance, if the fiscal year ends between August 2022 and April 2023, the first installment will be due on October 23, 2023.
