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October 10, 2023

Argentine Government amends the Income Tax Law, incorporating 'cedular' tax for 'high-income' individuals

  • As of 2024, earnings of employees, retirees and pensioners that exceed the equivalent of 180 Minimum, Vital and Mobile Annual Salaries ("SMVM" in Spanish) per year will be subject to a "cedular" tax at a progressive scale with rates between 27% and 35%.
  • As of today, considering current official exchange rate and SMVM, this USD amount would be approx. $5,600 per month. This means that employees making less than this amount would not be subject to individual income tax in Argentina.

On 6 October 2023, the Argentine National Executive Branch (PEN in Spanish) issued Decree 508/2023, enacted Law 27,725 (the Law), which amends the Income Tax Law starting on 1 January 2024. The main highlights of the new law follow.

A "cedular" tax on "high incomes" received through salaries, retirements and pensions is incorporated, replacing the current income tax paid by employees. This "cedular" tax will not apply to salaries received by directors, "sindicos" and members of supervisory boards of corporations and equivalent positions that will continue to be subject to the current individual income tax regime.

The Law clarifies that individuals receiving income exceeding the equivalent of 180 times the SMVM (Spanish acronym for Minimum, Vital and Mobile Annual Salaries) would be considered as high-income earners subject to the "cedular" tax.

In light of the above, salaries that do not exceed the mentioned threshold will be exempt from income tax and consequently not subject to individual income tax withholding by the employers, while the salaries exceeding the threshold amount shall be taxed at a progressive scale between 27% to 35%.

For the purpose of determining the tax, the SMVM in force as of 1 January 2024 will be considered and will be updated on 1 July of each year. As of today, considering current official exchange rate and SMVM, this USD amount would be approximately $5,600 per month. This means that employees making less than this amount would not be subject to individual income tax in Argentina.

Provisions of the Law 27,725 will apply for fiscal year 2024 onward.


For additional information with respect to this Alert, please contact the following:

Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


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