Independent workers’ contributions – New criteria for determination

As per Decree No 1866/2006, published in the Official Gazette on December 15, 2006, the regulation of article 8 of Law No 24,241 of the Integrated System of Pension and Death Benefits (SIJP) regulating the contribution regime for independent workers has changed.

Currently 15 categories of payments and contributions to the SIJP exist, the value of which are determined based on the “presumed income” of the self-employed worker with payments and contributions ranging from AR$ 99.84 to AR$ 1,536 per month.

However, the new system establishes that as of March 1, 2007 there shall only be 5 categories to be determined based on the true effective income of the tax payer according to the charts established in annex II, with contributions ranging from between AR$ 128 and AR$ 563 per month.

Self-employed workers carrying out unhealthy or risky activities, whereby they are entitled to a differential social security regime, shall pay a three per cent (3%) additional contribution on the amount of their relevant category.

Likewise, the system allows self-employed workers who during the fiscal year obtained net benefits 30% lower than their gross income to enter a lower category during the following fiscal year.

The possibility that the self-employed worker exercising any of the activities established in Section 2 subclause b of Law No 24,241, (such as management or administration of companies) who has obtained an annual gross income 36 times lower than the MOPRE value may take the contributions paid during the fiscal year as credits and cancel the payments corresponding to the following fiscal year, is also contemplated.

Finally, it is established that all self-employed workers shall register in the manner and complying with the requirements, time periods and conditions established by the Tax Board (Administración Federal de Ingresos Públicos), provided they continue exercising their activity in an independent manner. Those who do not comply with the registration shall be eliminated from the register. However, the worker may request registration again when he or she reinitiates activity or complies with the new regime of his or her own free will.