“In the 2022 Budget, it was proposed to follow the adjustment for inflation in thirds, but since it was not approved, as of the exercises that close on December 31, 2021, 100% can be taken,” César Litvin told Ámbito. The tax expert argued that “Income Tax measures the taxpayers’ ability to pay and, if the effect of inflation is not considered, anything is measured.”
In this regard, Litvin considered that “SMEs that have many assets exposed to inflation, many current assets, inventories, values to deposit and cash can benefit.” “Eliminating the effect of inflation on the balance sheets of companies means that the Income Tax is calculated in a real way,” explained the tax advisor, who considered that the change “may affect collection” via that tax. From his point of view, there would be no chance that in these months Congress could vote any law that restores the adjustment for inflation in thirds because “it does not seem that the opposition can lend itself to it.”
The Income Tax achieved a collection last year of just over $2.3 billion, which explained 21% of the total income of the treasury. The other pillar is VAT, which reported 29% and implicitly includes the inflation applied to the final prices.
The companies will have to present the affidavits of the tribute in May and that same month pay the annual amount.
As this newspaper was able to find out, among the officials of the Ministry of Economy they consider that the change generated by the adjustment for inflation will not cause a fiscal hole. Above all, they remember that this year there will be an increase in the Profit rate for large companies, which will pay up to 41% in case of distributing profits, which would compensate for a possible drop in collection. By the Solidarity law, companies with profits greater than $50 million will pay 35% and if they distribute profits another 7% is withheld. Instead, those with profits from 0 to $5 million will be taxed at 25%. Those who earn up to $50 million, 30%.
Sebastián Domínguez, a partner at SDC Tax Advisors, commented to this newspaper that in general, companies that apply the adjustment for inflation have negative results on their balance sheets or decrease their profits, all elements that indicate that when they settle the tax they will pay less. The specialist considered that “adjustment for inflation does not benefit highly indebted companies because it generates a profit for them.” On the other hand, he pointed out that it is convenient for firms that “have exposed assets because it generates a loss.”
Domínguez pointed out that in reality “the adjustment tries to take the gains to the real, leaving aside the nominal.” One of the cases, indicated the professional, is that of companies that have a lot of commercial credit granted to their clients, because by clearing the effect of price increases, they compute a loss that allows them to pay less tax.
In this sense, the accountant explained that “in general terms, the balance sheets of the companies give more often losses due to the application of the adjustment for inflation, than profits” because in general the companies “are not highly indebted.” “In most cases it is a loss,” remarked the professional who estimated that in this way “there could be a loss of collection.”
Source: Ambito
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