How the increase in the SMNV will begin to take effect from Februaryto $180,000that means that January will remain at $156,000, which is the one taken as the reference unit to determine the non-taxable minimum (MNI) of the ID of the first semester. This salary limit from which it is paid will remain at $2,340,000.
That means that If a person was below that floor and achieved an increase in their income, starting in the first half of this year they must pay the Cedular Tax, which begins with a rate of 27%. and goes up to 35%. And those who were reached will upgrade and pay more.
“This MNI will remain unchanged until the next update in July 2024. Leaving aside that from a tax point of view the reform of the income tax for employees that was carried out was not reasonable, the failure to update the MNI in line with inflation could have significant consequences.” warned Sebastián Domínguez, CEO of SDC Asesores Tributarios.
Domínguez states that “with such high inflation in recent months, many employees could soon begin paying income tax.”
“Following the intention of the legislator regarding the creation of the schedular tax, In our opinion, it would have been reasonable for the Law to contemplate an MNI that is updated quarterly by CPI with a trigger clause that advances it when the accumulated inflation within that period was equal to or greater than 20%,” he explained.
Profits: how the non-taxable minimum of the Cedular is determined
The law establishes that Salaries equivalent to 15 SMVM per month have been reached, that is, 180 a year. Yesand updated every 6 months according to the value of the SMVM at that time.
For the beginning of 2024, the Government decided to maintain the January one, so those reached will now have to wait until July, for the new update.
Earnings: practical examples
In practice, this lack of updating the MNI can lead to situations that do not respect the contributory capacity.
For example, An employee who earns $3,541,590 in March 2024, in real terms, will be receiving the same amount as in December 2023 ($2,340,000), which is why the Income Tax should not be payable. However, due to current legislation, Your remuneration will be subject to tax.
Even an employee with a remuneration of, for example, $2,800,000 that must be taxed on earnings when in real terms he earns less than before.
Source: Ambito
