Through Law No. 27,799 (1), Argentina has enacted a new unprecedented, simplified regime within its income tax system for the taxation of personal income and undivided succession estates.

Antecedents

This country ranks among the world’s leading nations in terms of the amount of U.S. dollars held by its taxpayers outside the financial system without being declared to the tax authorities (2).

This situation arose due to the historical instability of the financial system and the government’s occasional seizure of bank deposits in the face of the recurring financial crises that have occurred in the country (3).

Regularization of Assets

Tax amnesties, which were frequently implemented in the past, did not achieve the expected success for various reasons.

In light of this situation, the government implemented a new and unprecedented simplified system for individual income tax, with the aim of channeling those funds into the formal economy to stimulate economic growth.

Presumption of Innocence in Tax Matters

The rationale behind this extraordinary government regulation is that taxpayers adopted this evasive behavior in response to the economic crises and the confiscation of deposits; therefore, the aim is to regularize the assets of those referred to by the regime as “tax innocents.”

The authorities stated that this is neither a tax amnesty nor a tax regularization program, but rather a paradigm shift that moves away from the traditional presumption of tax guilt.

Taxpayers are now presumed innocent until the tax authority (ARCA) proves otherwise.

Simplified Income Tax System

Measures

The implementation of this system has the following characteristics:

1. Pre-filled Tax Return: The tax authority calculates the tax in advance and provides the taxpayer with the corresponding tax return (4).
2. Tax calculation: It considers only revenue and deductible expenses and does not consider the taxpayer’s personal expenses or changes in net worth.
3. Eligibility: individuals and undivided estates that meet the following requirements:

• a) Be a resident of the country
  b) Be registered for the tax on earnings 
• c) Income and net worth must fall within the established limits. 
• d) The taxpayer must not be classified by ARCA as a major taxpayer.
•  e) The taxpayer identification number (CUIT) must not be restricted or flagged.

Presumption of Accuracy

The filing of the tax return under this system, accompanied by payment made in a timely and proper manner, is considered final, unless there are significant irregularities.

The tax return is presumed to be correct; therefore, the tax authority may challenge it only if it has concrete evidence of significant irregularities—that is, those exceeding 15 percent.

The use of undeclared savings, both domestic and foreign, is also permitted without tax consequences ().

The statute of limitations is reduced to 3 years.

Criticisms

This innovative system has been the subject of certain criticisms from legal scholars, including on the following issues:

1. No specific tax amnesty law was enacted. 
2. The Anti-Money Laundering Act must be applied to declared assets, with the involvement of the Financial Information Unit (UIF in Spanish).
3. Future authorities may disregard the tax benefits granted due to an insufficient statutory foundation.

Adjustment of the system

Currently, the Ministry of Economy is promoting a modification to regime (6), the formal objective of which is to expand access to the system by reducing the grounds for exclusion and providing greater predictability to those who decide to join it.

Summary

Regardless of the current system and its strengths and weaknesses, countries in the region need to regularize their taxpayers’ undeclared assets, both domestic and foreign, as these assets have reached high levels; therefore, their regularization is necessary for economic growth.

The proposed reform currently under consideration includes:

1. Expansion of the taxpayer base: income and net worth thresholds for enrollment are eliminated.
2. High-income individual taxpayers or undivided estates: may opt in.
3. Significant Discrepancy: A Redefinition. (7)
4. Burden of Proof, Corrections, and Presumptions in VAT: Adjustments Are Applied. (8)

Synthesis

Faced with the need to bring substantial hidden income and assets—both within their territories and abroad—into the formal economy, the countries in the region were compelled to normalize these assets in order to achieve sustained economic growth.

Undoubtedly, as long as the focus remains on mitigating the consequences rather than addressing the root causes—as has been the case to date—countries in the region will be forced repeatedly to enact new tax amnesties (with varying degrees of ingenuity and success), consistently undermining the tax morale of compliant taxpayers.

To address this issue, it is necessary to ensure economic stability and strengthen the powers of tax agencies to enable the early detection of tax evasion.

Channeling financial resources from the underground economy into the formal economy is an economic necessity, especially given its significant size and the fact that emerging countries lack substantial sources of financing for their economic development.

The important thing is that these programs do not become yet another tax within the system or a permanent “tax drain” that undermines tax compliance.

To avoid this situation, fiscal reform measures should be adopted that establish broad-based general tax systems (9), with segmentation based on taxpayers’ ability to pay, but with a moderate tax burden that prevents fiscal distortions and thereby fosters economic development.

References:

1. Regulated by Decree No. 93/2026 and General Resolution No. 5820/2026.
2. These holdings are estimated at 170 billion dollars, surpassed only by Russia, with 440 billion dollars.
3. Through their replacement with government bonds.
4. The taxpayer has the option to edit it and/or add information if they believe there is an error or if it is necessary.
5. Proof of enrollment in the regime constitutes a positive indicator for the purpose of dealing with financial institutions.
6. At a press conference held on July 22, 2026, the Minister of Economy announced the submission to Congress of the new bill updating the system
7. The parameters and criteria are adjusted to maintain the accuracy of the system.
8. The burden of proof is shifted to the tax authority, and the taxpayer is given an opportunity to file an amended return and pay the difference, thereby preventing that difference from being considered a “discrepancy” that would exclude the taxpayer from the regime.
9. Limiting the numerous tax breaks that have been granted over time, which have gradually distorted the tax system

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