In an effort to pass the Profits project that was previously rejected by the Senate, the Government is urging Deputies to ratify the original version of the bill. Although most of the “fiscal package” was approved by the Upper House, the Income Tax Chapter (employee retention) did not receive endorsement. The government’s goal is for workers in a dependency relationship without minor children who earn over $1,800,000 gross monthly or over $2,200,000 gross with 2 children to pay income tax. This includes all payments received by workers, such as overtime and bonuses.
The difference between workers with or without children is due to deductions that can be made for minor children and other allowed deductions such as prepaid payments and school expenses. The new values would be implemented from the approval of the project, not retroactively. The Massa law currently in effect sets a non-taxable minimum at 15 SMVM as of January values, amounting to $2,340,000, which will increase to over 3.5 million in July.
According to estimates, around 800,000 workers who are currently exempt from Profits tax would start paying it again in amounts ranging from 5% to 35%. The project also ratifies tax relief applied from October 1st to December 31st, 2023, ensuring that there will be no retroactive withholdings. Tax expert Fernando López Chiesa emphasizes the importance of approving Decree 473/2023 to prevent employees from accruing debt with the Treasury.
Moreover, the project voted on by Deputies includes all payments received by workers in a dependency relationship in the tax base without any exemptions or reductions provided for by other regulations except for specific cases like oil workers under law 26176. Additionally, it addresses differences in non-taxable minimums for singles
