Extraordinary Advance Payment of Income Tax: Implementation and Guidelines

By means of General Resolution No. 5248, published in the Official Gazette on August 16, 2022, the Argentine Tax Authority (AFIP) imposed an extraordinary advance payment of the income tax, which will be considered as a down payment for the final tax liability corresponding to the tax period declared by entities subject to this payment.

Which entities are included?

AFIP established that, for a company to be subject to this advance payment, taxpayers must have declared a determined tax regarding the 2021 or 2022 tax periods of at least ARS 100,000,000, including losses. Alternatively, their tax return must have shown a tax result of at least ARS 300,000,000, excluding losses.

The only entities excluded from paying the extraordinary advance payment are those which, despite meeting the legal requirements, are exempted from paying income tax and, accordingly, possess an exemption certificate obtained in accordance with the applicable regulations.

Regarding which tax period taxpayers must consider to analyze if the generated income reaches one of the amounts mentioned above, it will depend entirely on when the entity’s fiscal year ends. If the end of the fiscal year was between August and September of 2021, the taxpayer must analyze the generated income for the 2021 tax period. If the end of the fiscal year was between January and July of this year, the taxpayer must analyze the income for the 2022 tax period.

According to the General Resolution, the extraordinary advance payment will be computed for the tax period following the one taken as calculation basis.

What is the corresponding amount to be paid?

The tax payable in advance will be determined according to the mechanism provided in article 3, section a), of AFIP’s General Resolution No. 5211/2022. This resolution regulates the mechanism for determining the ordinary annual advance payments.

 

Therefore, if the total amount obtained following this mechanism is more than ARS 0, the extraordinary advance payment will be 25% of said amount. In all other cases, the extraordinary advance payment will be 15% of the previous fiscal year tax result, not including deductions for losses.

The General Resolution does not allow taxpayers to compensate the amount of the extraordinary advance payment with other recoverable balances of taxes pending to be offset or recovered. Further, the payment cannot be posed to request a reduction of the ordinary annual advance payments established by General Resolution No. 5211.

When is the payment due?

The extraordinary advance payment will be divided in three equal and consecutive monthly instalments, according to when the taxpayer’s fiscal year ends:

End of fiscal year	Due date
	Instalment No. 1	Instalment No. 2	Instalment No. 3
August - December 2021	22/10/2022	22/11/2022	22/12/2022
January 2022	22/11/2022	22/12/2022	22/01/2023
February 2022	22/12/2022	22/01/2023	22/02/2023
March 2022	22/01/2023	22/02/2023	22/03/2023
April 2022	22/02/2023	22/03/2023	22/04/2023
May 2022	22/03/2023	22/04/2023	22/05/2023
June 2022	22/04/2023	22/05/2023	22/06/2023
July 2022	22/05/2023	22/06/2023	22/07/2023

 

What are the legal implications of the extraordinary advance payment?

The extraordinary advance payment represents an additional down payment apart from the one stated in the general regime. This advance can be added to the ordinary annual advance payment or be payable even if these regular advances are not due, e.g., for having had losses in the immediately previous tax period, or for getting an approval for a reduction of the income tax advance.

Based on each taxpayer’s fiscal balance, legal principles such as the principle of legality, the principle of contributive capacity, the principle of reasonability, and the principle of tax equity, among others, could be affected. This situation could lead to the rise of diverse procedural strategies to enforce compliance with said principles, therefore postponing the payment of the extraordinary advance created by the General Resolution until a final decision is reached. It must be borne in mind that if the payment is not made, AFIP could execute the indebted amount.