Seven keys on the extraordinary profit advance, according to tax experts

The Federal Revenue Administration (AFIP) has regulated the advance payment of income tax that will reach the companies with the highest income, for which the state plans to raise more than $ 250,000 million, with general resolution 5248/2022 published Tuesday in the Official Gazette. What do tax experts say about it?

For the tax experts consulted by Clarin, the most relevant feature is that “applies to any business and not just to those that may have benefited from the effect increase in international prices due to the Russia-Ukraine war “

Secondly, they specify that the advance will be “by 15% or 25%, depending on the case. In this sense, Sebastián Domínguez, CEO of DSC Tax Advisors, explains that “this will make companies must pay 114.97% or 124.95% of the previous period base as advances for the current year “. And in this sense,” this can generate balances in their favor “.

Mariano Ghirardotti, for his part, adds that this new system applies to a few taxpayers because it is for those who have certain taxes higher than $ 100 million or a tax result higher than $ 300 million without calculating losses. “It is eminently tax collection, no matter how the tax revenue was last year”synthesize.

“The problem with how it is planned is that the important thing is that the advances arrive no matter how it goes this year. That is, regardless of whether there is an improvement due to the war and that it brings some extra income, the reality is that it will be a year with very high inflationsays Ghirardotti.

In summary, Domínguez elaborated a point summarizing resolution 5248/2022 published this Tuesday in the Official Journal:

• It applies to any company and not just those who may have benefited from the effect of rising international prices due to the Russia-Ukraine war.

• It is 15% or 25%, depending on the case. This means that companies must enter 114.97% or 124.95% of the previous period base as advances for the current year.

• Taxpayers with accumulated tax losses must register the extraordinary advance.

• It is not possible to request the reduction of the extraordinary advance even when the income of the same generates a favorable balance.

• The extraordinary advance cannot be considered as a deposited amount in order to request the reduction of the general advances of income tax.

• The extraordinary advance cannot be canceled with balances in favor of the free availability of VAT or profits. That is, it must be paid by wire transfer even if you have credit balances with AFIP.

On this last point, Félix Rolando, partner of Andersen Argentina, highlights the possibility of making presentations before the Justice. “Given the impossibility of compensating, calculating losses or requesting the reduction of this advancea, we understand that companies could activate different legal strategies “said in that sense. And I add: “In fact, from the beginning it can be seen that the claims can be initiated in the administrative stage along with precautionary measures in court in which the suspension of the rule is requested. Furthermore, amparo actions can be carried out directly in front of the judicial system.

However, in this regard, Rolando clarifies that “it cannot fail to indicate the strategies to be implemented it may vary according to the particular case and the conduct adopted by the treasury “.

The advance must be paid in three equal and consecutive installments through fiscal codes 10-183-183, according to the following calendar:

Regarding the total percentage that companies would have to pay, Domínguez commented “Currently, companies must pay an initial advance of 25% and the remaining nine of 8.33% calculated on the tax determined by the deed of notoriety of the previous period minus some concepts such as withholdings and perceptions suffered in that period “.

“To this is added 15% or 25% of the extraordinary advance, depending on the case”, agrees Ghirardotti.

“In this way companies will be forced to insert advances that they had not planned, changing the rules of the game and modifying the scenario which, in itself, is already complex”, said Domínguez.

And coincidentally, both taxpayers pointed this out “This requirement can increase the rate of inflation.”

Regardless of the legality of AFIP collecting prepayments of income tax, tax experts agree on this “It is legal within certain limits.”

“Article 21 of Law 11683 indicates that AFIP may request” … until the expiry of the general term or until the date of submission of the affidavit by the taxpayer, if later, the payment of amounts on account of the tax that must be paid for the fiscal period for which the advances are paid “, explains Domínguez. And clarifies:” This implies that Afip can demand the payment of advances provided that the sum requested does not exceed the tax that must be paid for the tax period.

Is it possible to request a reduction of this extraordinary advance?

General Resolution (AFIP) 5248 states that:

a) It is NOT possible to request the reduction of this extraordinary advance.

b) This extraordinary advance cannot be considered in the budget to request the reduction of the general advances determined pursuant to General Resolution (AFIP) 5211. That is, even when the extraordinary advance generates a favorable balance in the financial year, it must be entered and not It is allowed to take it into consideration for the purposes of the request for reduction of general advances.

Is it possible to make legal claims against this request for this extraordinary advance?

Each company must analyze whether the extraordinary advance payment obligation, in its particular case, It affects constitutional principles and rights.

For example, if the payment of the extraordinary advance generates a balance in its favor, the company could initiate a legal action aimed at declaring the unconstitutionality of General Resolution (AFIP) 5248 and requesting the adoption of a precautionary measure indicating the AFIP not to claim the same until the substantive issue is resolved.

Another case for which legal action could be initiated is that in which the company has a freely available credit balance and cannot use it to cancel the extraordinary advance as occurs for the other general advances.

Since the extraordinary advance has been settled, cases of violation of constitutional principles and rights can be verified, such as the principles of legality, equality, reasonableness, taxable capacity, legal certainty and property rights.

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