One by one, all the points on the reduction of the IRAE
As reported by the government, the tax reduction for companies will mean a tax resignation of 40 million dollars for the State and these are the key points.
The main change that there will be in the tax, in case of obtaining the approval in both chambers, is that it will stop being a fixed tax and will have bands, as in the IRPF.
Until now, those companies that had income of up to 2 million Indexed Units (UI) –285,000 dollars at today’s value– pay 12%; between 2 and 3 million IU, 15%; between 3 and 4 million IU, 18%; and from then on, 25%.
“It seems unfair to us because it is an encouragement not to grow, because you have to bill a certain amount to avoid a higher rate,” said Pablo Mieres, Minister of Labor and Social Security, at a press conference this Friday.
If the project sent by the Executive Power is approved, the rates will become progressive. “The company will pay the difference in the rate calculated by the percentage of billing that exceeds the ceiling,” explained Mieres,
Thus, in the case of a firm that registers income for 2.5 million UI, it will pay 12% for the first 2 million and 15% proportional to the remaining half million.
Maximum of one year in IRAE
Small companies that exceed 305,000 UI must not necessarily remain as IRAE taxpayers in the following two years, as they do now.
With this measure, around 2,700 small companies will be benefiting which, when exceeded, will return to their category in the following year.
Top increase in IMEBA
In addition, there is another measure aimed at rural MSMEs: the income ceiling to be taxpayers of the Tax on the Disposal of Agricultural Assets (IMEBA) will be raised from 2 million UI to 2.5 million UI – that is, 14.1 million of pesos–.
Mides debt forgiveness
Finally, the project contemplates debt forgiveness for more than 11,000 monotributistas companies of the Ministry of Social Development (Mides). “It includes people who had a very difficult time during the pandemic and in some cases were left in debt,” said Mieres.
The debts that will be taken into account will be those generated since March 2020 by monotributistas who are ex officio suspended in the BPS, until the date of promulgation of the law.