Friday, September 30, 2022

Earnings: 1% of companies will pay up to 124% in advance this year

According to estimates by the Argentine Institute of Fiscal Analysis (IARAF), the advance will generate an additional $250,000 million, but $150,000 million of this will go to the provinces as co-partners.

Although the organization, led by Carlos Castagneto, makes reference in Resolution 5248, published in the Official Gazette, to the fact that there are local companies benefiting from the increase in the price of energy and commodities due to the war in Eastern Europe, the remedy is oil or agricultural companies. Not directed to specific firms as such. The only parameter determined by it is the taxable basis of tax.

Companies entering within 2021 will be those that cease their practice between now and the end of the year, and by 2022, which close between January and July. The resolution excludes companies that have obtained a certificate of exemption from income tax in accordance with the General Resolution (AFIP) 2681.

As reported by AFIPE 1,911 pertains to companies that would be covered by extraordinary advance payment, Which, strictly speaking, will become a kind of zero-rate loan for the public sector.

this is because Companies generally make an advance payment equal to 25% of the tax base of the previous year and another 9 installments of 8.33%. It integrates 100%, After that, the majority, in June of the following year, pay the balance amount of income tax based on their results based on the deductions they have already advanced, withholdings and other. this year, Companies will advance between 114% and 124%, adding an extraordinary advance payment of 15% or 25% as appropriate with respect to the basis of its calculation. Companies whose prescribed tax base is more than zero will make an advance payment of 25%. On the other hand, those whose basis is Nil (this may be the case in case of a company that applies deduction for losses of previous years”), will pay 15%.

The result of this large contribution of companies, as anticipated by Minister Sergio Massa, thereforeThis will be implemented to finance the bonus that will be given to retirees to offset the effect of inflation on assets. In other words, it is a zero or negative rate loan to the public sector, because Advances, although they are calculated for the tax due for the financial year, are subject to adjustment neither for the interest rate nor for inflation., When the company pays taxes in June of the following year, it must have spent more than half a year in inflation terms with annual rates of 90%.

Sebastian Dominguez, a fellow of SDC Tax Advisors, warned that “Companies will be forced to enter into advances they had not planned, changing the rules of the game and modifying a scenario that is already complex in itself”. Assuming costs go into debt which can be transferred to prices along with other options,” he explained.

Some of this warned the Argentine Industrial Association (UIA) after a meeting of the plant’s board of directors last week, which was attended by the secretary of industry and producer development, Jose Ignacio Mendigueren., The UIA indicated that the measure would affect “issues such as working capital, investment decisions and job creation—in a restrictive context for funding and with rising interest rates.”“-. According to the industrialists, for the manufacturing plant, the cash flows of the companies have already been planned, which will “create complications in the payment chain”.

Nation World News Desk
Nation World News Desk
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