Toward a New Tax Paradigm

Argentina’s tax relationship with taxpayers is being recast around a principle that had long been missing from the system: the state should prove wrongdoing rather than presume it. The Fiscal Innocence law marked a change from the persecutory approach associated with the country’s tax regime and placed the presumption of innocence at its centre.

The proposed Fiscal Innocence II would extend that shift. The Chamber of Deputies gave the bill preliminary approval on Aug. 26. One of its provisions would allow taxpayers to correct a significant discrepancy identified by the tax authority within 15 days of the official assessment, without losing access to the regime or its benefits.

The first stage of the reform created a more predictable framework between the tax authority, ARCA, and taxpayers. The new bill is presented as a further effort to strengthen legal certainty and build confidence before the Sept. 22 deadline for joining the simplified income-tax system.

The authors argue that greater confidence could persuade more taxpayers to enter the regime and disclose assets currently outside the financial system. The proposed benefits include a tax shield for years before the base tax period and the possibility of regularising certain assets that were omitted from earlier declarations.

The measure has not yet become law and still awaits consideration by the Senate. Even under the simplified system, taxpayers would still need to keep their own records of assets, transactions and consumption, although they would not have to include all of that information in the filing submitted to ARCA. The authors say the regime could help bring financing into Argentina’s capital markets and productive economy.