What is and how does the new income tax floor apply in Argentina?

( Spanish) — On Monday, May 1, the new floor will come into force in the Income Tax, a withholding paid by workers in Argentina derived from their salary.

The Ministry of Economy announced this Tuesday a new amount of the non-taxable minimum to the fourth category. As of this Monday, those who collect monthly gross, that is, before legal discounts, less than 506,230 Argentine pesos (equivalent to US$ 1,079 according to the exchange rate in the parallel market on Friday) will not be affected by this tax. This measure will benefit some 250,000 registered employees throughout the country.

On the other hand, an increased special deduction was also announced for salaries that exceed 506,230 pesos and are less than or equal to $583,851 pesos (US$ 1,244). In this way, the deduction for said salaries will be less than the one imposed until April.

What is the tax of the earnings?

According to official sources, the Income Tax is a national tax that is deducted from assets or income obtained during the calendar year, that is, on the salary of workers in Argentina.

The state is the one who adjusts the basis on which the payment of this tax is calculated. Since January of this year, wages that did not exceed 404,062 pesos (US$861), inclusive, did not pay income tax.

For its part, the increased special deduction was computed between 404,062 pesos (US$861), and 466,017 pesos (US$993) gross.

The calculation to define the floor in the salary scale that pays this tax is made taking as reference the variation of the Average Taxable Remuneration of Stable Workers (RIPTE) which was 25.29% between October 2022 and February 2023 , according to the latest published data.

More additional exempted from the payment of Earnings

The Minister of Economy, Sergio Massa, also announced after a meeting with representatives of the General Confederation of Labor (CGT), the exemption from the payment of Earnings to a series of additional benefits, benefiting more than 600,000 workers in a dependency relationship.

In the agreement it was established to exempt from the payment of the tax the bonuses for productivity, cash failure and concepts of a similar nature; remuneration for mobility, travel expenses, overtime, additional hours for rotating shifts and the like.