On December 3th of 2018, it was promulgated the law n ° 27,468 (the “Law”), enacted on November 15th, 2018. The Law introduces amendments to the Income Tax Law for the fiscal years to be initiated on the 1st of January of 2018.
First, the Law amends the index that is taken as reference to adjust for inflation, in this sense the term “wholesale price index, general level” is replaced by the term “consumer price index general level (CPI)”
Another amendment that the Law introduces is related to the percentage from which the adjustment for inflation can be made on the income tax for the fiscal years after January 1st of 2018.
The Law establishes that the adjustment for tax inflation will be applicable, based on the general consumer price index, if the inflation calculated from the beginning until the end of each of the first three fiscal years exceeds:
- A) for the first fiscal year 55%,
- B) for the second 30% and
- C) for the third 15%
In this case, the adjustment for positive or negative inflation corresponding to the first, second and third years of application shall be charged one third (1/3) in the respective fiscal year and the remaining two thirds (2/3) in equal parts in the (2) following immediate fiscal years.
The INDEC[1] measured the cumulative inflation (CPI) until November 2018 of 43,90%. External consultants calculate that the total CPI to December will reach 45%. Taking into account these percentages, due to the recent amendment of Law No. 27.468, it will not be possible to applicate tax inflation adjustment for the fiscal year of 2018.
[1] Consumer Price Index, Ministry of Finance
