New Extraordinary Advance Payment on Account of Income Tax

General Resolution 5453/2023, published in the Official Gazette on December 4, 2023, created a new income tax advance payment that applies to those entities listed in section 73 of the Income Tax Law, i.e., legal entities incorporated in Argentina and other persons assimilated to them, provided they:
 

1. Register as main activity certain of those comprised in the hydrocarbon categories.
    
2. Have reported a tax result—not considering the deduction of tax losses from prior fiscal years—equal to or above ARS 600,000,000, compared to their tax returns for fiscal years 2022 or 2023, as appropriate.
    

How is the payment on account determined?

To determine the payment on account, entities must consider:

a) Those closing their fiscal years between October and December of 2022 (both inclusive): their income tax returns for the fiscal year 2022.

b) Those closing their fiscal years between January and September of 2023 (both inclusive): their income tax returns for the fiscal year 2023.

The amount is determined by applying a 15% rate on the tax result of the fiscal year prior to the one to which the payment on account corresponds, not considering the deduction of tax losses from prior fiscal years.

The Resolution also establishes that if tax results have been declared for one or more promoted activities, the taxpayer may deduct the amount corresponding to the tax relief for said activity from the amount of the payment on account.
 

When is it due?

Payments must be made in three equal and consecutive instalments:

Fiscal Year-End	Instalments 1, 2, and 3
10/2022 to 06/2023	12/22/2023, 01/22/2024, 02/22/2024
05/2023	01/22/2024, 02/22/2024, 03/22/2024
06/2023	02/22/2024, 03/22/2024, 04/22/2024
07/2023	03/22/2024, 04/22/2024, 05/22/2024

 

How is the payment on account accounted for?

a) For entities closing their fiscal years between October and December of 2022 (both inclusive): annual tax return for fiscal year 2023.

b) For the entities closing their fiscal years between January and September of 2023 (both inclusive): annual tax return for fiscal year 2024.

 

Which restrictions does the Resolution establish?

The Resolution expressly provides that:

a) The compensation mechanism in section 1 of General Resolution 1658 cannot be used for cancelling the payment on account. This means that taxpayers cannot use their positive tax credit balance to settle this payment on account.

b) Taxpayers and those to whom the Resolution applies cannot use the payment on account in the calculation for reducing ordinary payments in advance (i.e., those which every taxpayer regularly pays.

 

Exempted subjects

a) Entities subject of the payment on account in General Resolution 5391.

b) Legal entities with a certificate proving an income tax exemption under the terms of General Resolution 2681.