The Financial Innocence Project aims to help people “Mattress Dollar””, but this is not money laundering, but rather a mechanism designed for that purpose. Simplify and make transparent the legality of assets for income tax purposeshas a “liberating effect” in the face of the possibility of an ARCA test.
The core of the project, which the government plans to include in the extraordinary parliament to be debated in December, is: Abolition of declaration of initial assets and justification of consumption When settling the newly created simple income tax.
How is the legitimacy of consumption reflected in profits?
Income tax now requires taxpayers to justify changes in their assets from year to year. ARCA estimates undeclared profits when changes in declared consumption and goods exceed declared income.
The official project aims to make this consumption justification requirement more flexible. If a taxpayer is able to justify ownership of his assets (investments, real estate, bank balances) at the beginning of the period, there is a “presumption of innocence” for future income that does not result from unjustified asset growth..
The benefit is for taxpayers You no longer need to prove how you spend your money every month. If your year-end assets match your declared income, consumption details are no longer a test factor. This greatly reduces the risk of being audited by ARCA for consumption discrepancies.
In this way, funds that enter the formal circuit through this system are Presumption of legitimacy (financial innocence) for the future.
What is a simplified earnings system?
This project will give legal enforcement to the simplified income tax. Already in force by resolution of ARCAbut due to the regime’s lack of legal security, it only received the support of 14,000 taxpayers.
The Simplified Income Plan is a voluntary option created by ARCA for individuals to promote tax compliance and simplify annual tax payments.
At the time of its creation, the sole purpose was to generate income from Argentina, but new resolutions have recently been adopted. ARCA expands scope to overseas incomesomething that definitely differs within the project with respect to the original wording
Deliberately: This is an option that is exercised every year and each accounting period (applicable from fiscal year 2025).
High-income taxpayers cannot participate, Maximum revenue is $1 billion and capital is $10 billion.
How Earnings Simplified works
A simplified income tax would mean a fundamental change in the way taxpayers interact with the Treasury.
Prewritten declaration: ARCA pre-generates an abbreviated affidavit using information already in its database (payroll, invoices, expenses, etc.).
Taxpayers should verify the information proposed by ARCA and Please only upload data that Treasury cannot obtain from third parties..
The procedure will be done digitally. “PH Easy Earning” Service From Arca’s website.
What is the key to “innocence”?
A big incentive for Simplified Profit, related to the concept of Tax Innocence, is that it exempts you from declaring your assets, one of the most complex and monitored obligations.
Person who selects and submits a simple oath Exempted from the obligation to report the detailed composition of assets (What was previously the Personal Assets Annex and Property Justification).
ARCA is Focus on correct reporting of income (claims) and deductible expensesHowever, it does not provide an exhaustive analysis of changes in personal consumption and wealth, as was the case before.
liberating effect: If a taxpayer accepts and pays the return proposed by the Ministry of Finance, it will have the effect of an exemption (or “fiscal cap”) with respect to income tax for that period and will be protected from future review of the source of funds already declared.
The system aims to reduce administrative burdens and eliminate the fear of inspection due to fluctuations in consumption or wealth, thereby facilitating further formalization of the “mattress dollar”.
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