Modifications to the Employer Contributions System

On August 16, 2018, the Argentine Executive established modifications to the employer contributions system through Decree 759/2018 (the Decree), published in the Official Gazette on August 17. This Decree will be valid from September 1, 2018, as provided in article 7.

The main aspects are:

1. The additional aliquots provided for differential or special pension schemes must be applied on the corresponding tax base, without considering the drawdown regulated in Article 4 of Decree No. 814 of June 20, 2001 and its amendments.

2. In the case of part-time work contracts to which article 92 ter of the Labor Contract Law No. 20,744 (as amended 1976) and its amendments are applicable, the amount of said deduction must be proportional to the time worked, and must not exceed the equivalent of two thirds (2/3) of the amount corresponding to a full-time worker.

3. The labor relations regulated by the Construction Industry Regime established by Law N° 22.250, its modification and complementary law, will be included in the provisions of article 4 of Decree N° 814/01 and its amendments. The provisions of Article 1 of the Decree for the calculation of additional concepts, for which the employer must contribute according to the specific rules that regulate the activity, are applicable.

4. The Decree establishes that the Social Security Office of the Argentine Ministry of Labor will be in charge of updating the amount of the aliquot and of the tax base (according to the first paragraph of Article 4 of Decree No. 814/01). Said Office will also be responsible for publishing the new value that must be considered for the determination of employer contributions accrued as of January 1 of each year.

5. The Argentine Tax Authority (the “AFIP” after its acronym in Spanish) will set the manner of deduction established in article 4 of Decree No. 814/01 and its amendments; and in the cases in which it is appropriate to apply the deduction based on the days worked, the month will be considered to be thirty (30) days long.