On the other hand, those who are located in the range between that amount and $431,988 will pay a lower rate, thus tempering the effect generated by starting with the payment of the tax from the highest rates. This is because the increase in the special deduction does not alter the Minimum Non-Taxable Tax for a single person, which is only $122,000 per month.
Namely: every single person without children is covered by the Income Tax from that amount from $122,000 per month, but does not pay for the effect of the increase in the “special deduction”that is, an amount that the Government allows to be taken into account without another reason, unlike other current deductions, such as the cost of rent.
Next year a deduction for children’s school expenses will come into force, which is added to the 2023 Budget at the request of the opposition, although it is estimated that the amount will not be significant.
As the Income Tax is progressive, which implies that the rates grow as the scale risesthe rise in the floor due to the special deduction means that those who are in the first steps do not pay, but it generates the distorting effect that the one who begins to pay taxes does so from the highest rates (30% to 35%) .
To do this, the regulations created a mechanism to temper this effect between those who earn $330,000 and $421,998 gross monthly.
What about the bonus
Meanwhile, Sebastián Domínguez of SDC Tax Advisors, warned that, with the regulation that was put in place through a General Resolution published in the Official Gazette, some bonuses will be reached even though the Tax Law says otherwise.
It states that “employers, at the time of carrying out the analysis to determine whether or not to withhold the Income Tax on the Christmas bonus, must analyze the characteristics of each 2022 installment independently:
First installment: If the amount of the remuneration and/or monthly average gross salary for the first semester does not exceed the sum of $280,792, the Complementary Annual Salary (SAC) will be exempt up to half of that value, that is, $140,396.
second installment: If the amount of the remuneration and/or monthly average gross salary for the second semester does not exceed the sum of $330,000, the SAC will be exempt up to half of that value, that is, $165,000″.
If a person receives an extraordinary sum in the second semester, as a result of a special task or a joint agreement, which implies raising the average monthly remuneration above the floor, they will have to pay the tax for the difference.
Source: Ambito
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