A Shift Toward Predictability in Argentine Taxation: The 2024–2026 Reform Agenda

Note: Monetary amounts are stated in Argentine pesos (ARS), with USD equivalents included only as illustrative references and subject to exchange rate variation.

Introduction: a system built on distrust

For decades, Argentina’s tax system evolved in a context of recurring macroeconomic instability, including sustained inflation, exchange controls and capital restrictions. In that setting, criminal tax exposure extended beyond cases of deliberate fraud. Because statutory thresholds were not adjusted in real terms for long periods, relatively modest discrepancies could trigger criminal proceedings, creating a climate of heightened enforcement risk.

Over time, tax administration increasingly relied on broad audit powers, expansive reporting regimes and extensive legal presumptions. As inflation eroded the real value of fixed statutory thresholds, the practical reach of criminal liability expanded, blurring the line between routine non-compliance and genuinely fraudulent conduct.

This framework produced structural consequences. A significant share of household and individual savings remained outside the formal financial system, often held in US dollars or kept outside declared channels. Compliance was frequently approached defensively, in response to enforcement pressure, rather than as part of a stable and predictable regulatory environment.

Against this backdrop, the current administration has presented its reform agenda in an effort to recalibrate the relationship between the State and taxpayers. Law No 27,799, commonly referred to as the “Tax Innocence Law”, is the central legislative expression of that effort and marks an important institutional shift in Argentina’s approach to tax enforcement.

A sequenced reform agenda: context before the law

The Tax Innocence Law should not be read as an isolated statutory measure. Rather, it forms part of a deliberately sequenced reform process launched in December 2023, aimed at restoring macroeconomic stability and rebuilding institutional credibility.

The first phase took the form of broad legislative authorisation. Law No 27,742 (the Ley de Bases) declared an economic and administrative emergency and enabled a sweeping reorganisation of the public sector. Although not limited to tax matters, it provided the structural foundation for subsequent reforms.

From a tax and investment perspective, one of its most consequential features was the creation of RIGI (Régimen de Incentivo para Grandes Inversiones), designed to attract large-scale capital projects through long-term commitments of legal, tax and foreign exchange stability for up to 30 years. This marked a broader policy shift toward predictability.

Institutional restructuring followed. In late 2024, the federal tax authority was reorganised, replacing AFIP with ARCA (Agencia de Recaudación y Control Aduanero) and redefining enforcement mandates.

Law No 27,799: the “Tax Innocence Law”

The reform can be grouped into five principal areas:

• higher thresholds for criminal prosecution;
• extinction of criminal liability through payment;
• administrative penalties for failure to file;
• new statute of limitations periods; and
• creation of a Simplified Income Tax Return Regime.

ARCA has described the purpose of the law as restoring “a framework of reasonableness and predictability”, and ending what it characterises as unjustified criminal and administrative persecution historically affecting individual taxpayers.

Higher thresholds for criminal prosecution

The law substantially increases the monetary thresholds required to trigger criminal prosecution, with the stated aim of reserving criminal enforcement for more significant cases of tax evasion. The new thresholds are as follows.

• Simple evasion: the threshold increases from ARS1.5 million to ARS100 million per tax and per tax year (approximately USD70,000).
• Aggravated evasion: the threshold increases from ARS15 million to ARS1 billion per tax and per tax year (approximately USD700,000).
• Withholding/collection-related offences: for failure to remit withheld taxes, the threshold increases from ARS100,000 to ARS10 million per month (approximately USD7,000).
• Other offences: thresholds for improper use of tax benefits, social security resources and withholding-related obligations were also updated.

As a result, conduct involving amounts below the new thresholds is no longer subject to criminal prosecution, although it remains administratively sanctionable. The law also provides for annual adjustment of criminal thresholds based on the UVA index (an inflation-linked unit of account) beginning in January 2027, to reduce future erosion of the thresholds in real terms.

Extinction of criminal liability through payment (often described as a “Silver Bullet”)

The reform creates a structured regularisation mechanism with direct criminal law effects. If a taxpayer fully pays the outstanding tax, interest and administrative fines before a criminal complaint is filed, criminal proceedings will not be initiated.

Even after criminal proceedings have begun, criminal liability may still be extinguished if the taxpayer pays the full amount due plus an additional 50% surcharge within 30 business days of formal notice of the charges. This reflects a clear policy shift toward fiscal recovery over punitive enforcement.

The law also clarifies that not every tax adjustment gives rise to criminal exposure. Criminal proceedings may not be initiated where discrepancies arise solely from technical or conceptual differences (such as disputes over legal interpretation, valuation methodologies or allocation criteria), provided there is no evidence of deceitful conduct or intentional concealment.

Consistent with this approach, ARCA is barred from filing a criminal complaint when the alleged liability is based exclusively on:

• differences in legal interpretation or technical accounting criteria;
• legal presumptions unsupported by factual evidence; or
• interpretive positions previously and transparently disclosed by the taxpayer.

This distinction reinforces a central principle: criminal tax liability should require demonstrable fraud, not merely disagreement over legal interpretation.

In addition, recent guidance referenced in practice (including Instruction No 1/2026) addresses the application of lex mitior (the retroactive application of the more lenient criminal law). Under that approach, where legislative amendments reduce penalties or establish more favourable thresholds or conditions, the more lenient regime should apply to ongoing proceedings, subject to the absence of a final judgment. In practical terms, the increase in criminal thresholds under the Tax Innocence Law may require reassessment of cases initiated under the prior framework.

Finally, this extinguishment mechanism (Silver Bullet) may be invoked only once per individual or legal entity, underscoring its exceptional character and its role as an incentive for voluntary regularisation rather than a recurring compliance strategy.

Administrative penalties for failure to file

Implementing guidance (referred to in practice as Guideline/Instruction 2/2026) clarifies the practical application of administrative fines for failure to file tax returns. Following the Tax Innocence Law, ARCA updated the automatic fine amounts as follows:

• ARS220,000 for individuals and undivided estates (approximately USD150); and
• ARS440,000 for corporations, legal entities, and permanent establishments (approximately USD300).

Importantly, this guidance does not create new penalties. Rather, it standardises and systematises enforcement through a more gradual and structured procedure.

Once a filing deadline expires, the taxpayer receives an automated reminder through the electronic tax domicile. If non-compliance continues, ARCA applies differentiated waiting periods based on the taxpayer’s compliance profile, reflecting a risk-based administrative approach. The fine is formally assessed and the corresponding notice issued only after those periods have elapsed – and after automated verification of the taxpayer’s status.

New statute of limitations periods

The reform introduces a reduced three-year statute of limitations for tax audits applicable to taxpayers who timely file and pay their returns. This abbreviated period replaces the prior five-year term and functions as a benefit for compliant taxpayers, subject to specific conditions.

Access to the reduced period is conditioned on the absence of a “significant discrepancy”. A significant discrepancy exists where:

• the adjustment increases the tax payable by at least 15%;
• the difference exceeds the statutory criminal threshold for simple evasion (legally defined in ARS; USD70,000 equivalents are illustrative only); or
• the adjustment arises from the use of false or sham invoices (facturas apócrifas), regardless of the amount involved.

The implementing decree further clarifies that voluntary amended returns filed before formal audit commencement are not considered for purposes of determining whether a significant discrepancy exists.

Consistent with the reform’s emphasis on voluntary compliance, the implementing framework also provides for a 50% reduction in administrative fines where taxpayers regularise discrepancies within 45 days of the original due date. This strengthens the incentive structure behind the shortened limitations period by rewarding early correction and good-faith compliance.

Creation of a Simplified Income Tax Return Regime

The Tax Innocence Law establishes an optional Simplified Income Tax Return Regime for resident individuals and undivided estates that meet certain thresholds (described in practice as having approximately USD700,000 in annual income and USD7 million in total assets, but legally measured in ARS).

Under this regime, the following applies:

• ARCA pre-loads an income tax return using information available in its systems and from third parties, based on the taxpayer’s gross income and computable deductions for the period;
• the taxpayer may review, modify, confirm and file the return;
• if the return is filed and the resulting balance is paid on time, the filing produces a liberatory effect, effectively closing the tax year and protecting the taxpayer against future civil or criminal actions for that period, subject to the legal exceptions; and
• a presumption of accuracy applies to income tax and VAT returns for prior non-statute-barred periods, subject to the law’s conditions and the absence of a qualifying significant discrepancy in the relevant filing.

The implementing regulations further clarify that, within the simplified regime, ARCA’s review is narrowed with respect to net worth increases under the regime’s specific rules.

This is a strong taxpayer protection, but it is not absolute. The statute and implementing regulations preserve ARCA’s authority to challenge the simplified return and, where the statutory conditions are met, to displace the protection if a “significant discrepancy” is later identified. Under the regulatory framework, this may occur, among other cases, if ARCA verifies:

• a tax adjustment (or an equivalent reduction of tax losses or taxpayer credits) of at least 15% relative to the taxpayer’s declared position;
• a difference exceeding the monetary threshold for simple tax evasion under the Criminal Tax Regime (used here as a statutory benchmark, not necessarily as a criminal characterisation); or
• the use of apocryphal (ie, non-genuine) invoices or other supporting documents, subject to the specific corrective rules set out in the regulations.

The best analogy is not a tax amnesty, but a conditional statutory safe harbour tied to truthful reporting and procedural compliance.

In addition, a spontaneous amended return filed before ARCA’s formal intervention is excluded from the significant discrepancy analysis. A similar corrective mechanism applies in apocryphal document cases if the taxpayer rectifies before service of the tax assessment notice (determinación de oficio), and regularises the resulting tax difference and interest, as applicable.

Updating reporting requirements and financial traceability

In parallel with the Tax Innocence Law, the administration has undertaken a significant recalibration of financial reporting thresholds and automatic information reporting regimes. Although these measures do not formally amend the Tax Innocence Law, they operate alongside it and reinforce its broader objective of narrowing disproportionate enforcement mechanisms.

Several automatic reporting obligations have been eliminated, and financial reporting thresholds have been materially increased. In particular:

• the reporting threshold for transfers and credits in virtual wallets was raised to ARS50 million for individuals and ARS30 million for legal entities (USD equivalents are approximate);
• comparable thresholds now apply to bank transfers and account movements, which are reportable only above those amounts; and
• fixed-term deposits and brokerage holdings are reportable only above ARS100 million for individuals and ARS30 million for entities.

Separately, ARCA increased the threshold for requiring customer identification in final consumer purchases to ARS10 million (approximately USD7,000). Transactions below that amount no longer trigger purchaser identification requirements, regardless of payment method.

Taken together, these adjustments reflect a deliberate narrowing of automatic reporting mechanisms, aligning tax oversight with transactions of material economic significance rather than routine financial activity.

Recent legislative developments: the new Labour Modernisation Act

As this article was being finalised, the Labour Modernisation Act was advancing through the final stages of the legislative process, and has now been passed as Law No 27,802. Although primarily framed as labour legislation, the Act also includes significant tax amendments with practical implications for both corporate and individual taxpayers.

Inflation adjustment of tax losses

One of the most technically significant proposed changes concerns the treatment of tax losses under the Income Tax Law. The Act provides that tax losses generated in fiscal years beginning on or after 1 January 2025 would be adjusted for inflation based on the Consumer Price Index (IPC), measured between the closing month of the fiscal year in which the loss arose and the closing month of the fiscal year in which it is used.

Exemptions for individuals: rental income and real estate transfers

Another relevant proposed amendment affecting individuals under the Income Tax Law would apply from tax years beginning on 1 January 2026 and includes:

• an exemption for income derived from residential leases (house-habitation rentals); and
• an exemption for capital gains derived from the sale of real estate and from transfers of rights over real estate, subject to regulatory conditions.

RIMI – Regime for Incentivising Medium-Sized Investments

The Labour Modernisation Act also creates RIMI (Régimen de Incentivo para Medianas Inversiones), a nationwide incentive regime aimed at promoting productive investment by micro, small and medium-sized enterprises. The regime applies to “productive investments” made during the first two years after its entry into force, and establishes minimum investment thresholds ranging from USD150,000 (for micro-enterprises) to USD9 million (for medium-sized enterprises).

For RIMI purposes, “productive investments” include:

• the acquisition, manufacture, development or importation of new depreciable movable assets (excluding automobiles) for use in productive activities in Argentina; and
• construction works and infrastructure projects directly allocated to income-generating operations in the country.

Financial assets and portfolio investments are expressly excluded.

The principal tax benefits include:

• accelerated depreciation for income tax purposes (in some cases, in one or two instalments); and
• early refund of VAT credits (after three monthly tax periods).

The regime is subject to strict compliance conditions, including the exclusion of taxpayers with final criminal tax convictions, outstanding tax debts or participation in overlapping incentive regimes (such as RIGI).

Conclusion: toward a new tax architecture

Recent legislative developments reflect an ongoing adjustment of Argentina’s tax framework. The Tax Innocence Law significantly raises the monetary thresholds for criminal tax offences and narrows the circumstances in which tax adjustments may give rise to criminal proceedings. As a result, criminal liability is now more closely linked to cases involving material amounts and demonstrable intent.

The new Labour Modernisation Act also introduces tax amendments with practical implications for both companies and individuals.

Argentina has a long history of periodic tax amnesties (blanqueos), through which taxpayers were invited to disclose previously undeclared assets in exchange for reduced penalties or forgiveness. Those programmes were typically temporary, politically sensitive and explicitly framed as extraordinary regularisation windows.

The Simplified Income Tax Return Regime follows a different logic. It is not presented as an extraordinary regularisation window and does not require the disclosure of previously undeclared assets. Instead, taxpayers may confirm a pre-filled return and obtain a liberatory effect for the relevant tax year. In addition, the regime may produce a stabilising effect on prior tax positions through the presumption-of-accuracy mechanism for non-statute-barred periods, subject to the legal thresholds and conditions discussed above, including the absence of a significant discrepancy in the most recent filing.

Although the regime is not formally characterised as an amnesty, it may, in practice and under strict statutory conditions, generate effects comparable to a limited regularisation mechanism: it can facilitate the use of lawfully sourced funds within the formal financial system and support economic activity, while reducing potential adverse tax consequences for non-statute-barred periods to the extent the regime’s protective effects remain available.

Argentina’s Tax Innocence reform: a quick summary

• Argentina’s Tax Innocence reform should be read as part of a broader shift toward greater predictability and proportionality in tax enforcement.
• The reform raises criminal tax thresholds, narrowing criminal exposure to higher value cases.
• It introduces an optional Simplified Income Tax Return Regime for eligible individuals, based on prefilled tax returns prepared by ARCA.
• If properly filed and paid, the regime may provide a liberatory effect for the relevant tax year and support a presumption of accuracy mechanism for prior non-statute-barred periods, subject to conditions.
• The regime is not unconditional: its protective effects may be challenged where ARCA identifies a significant discrepancy.
• Although not formally characterised as an amnesty, the regime may, in practice and under strict conditions, operate as a limited regularisation mechanism by facilitating the use of lawfully sourced funds within the formal financial system and reducing potential adverse tax consequences for non-statute-barred periods, to the extent the regime’s protective effects remain available.

The framework also places strong emphasis on financial traceability and the use of formal payment channels.