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Tuesday, March 21, 2023

What will happen to the advances and income tax payments that were made before the tax reduction?

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Minister Azucena Arbeleche announced when the retroactive law will come into force and how previous payments will be dealt with.

Photo: Credit Suisse

In the framework of his appearance before the Finance Committee of the Senate of the Minister of Economy and Finance lily arbelechethe director of Tax Consulting, Pia Biestroexplained what will happen to those who made advances and payments in Personal Income Tax (IRPF) before the announcements tax break from last week.

He tax reliefwhere there is also a cut in the Social Security Assistance Tax (IASS), It has already been presented to Parliament for treatment and, when it is sanctioned, it will be applied retroactively to January 1, 2023 in both cases, since these are two annual taxes.

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“Both the IRPF and the IASS are set on December 31 of each year. Once the law comes into force, both workers and liabilities will see this tax relief,” explained Biestro.

Now, what will happen to the advances or payments What were already done until the entry into force of the law? In the case of personal income tax It will depend on whether or not the worker presents an affidavit. If you do not present an affidavit, there the State will return to the worker through the employer what was withheld more than”, specified the hierarch.

On the other hand, in the case ofthose who did present itwhen they make the declaration for 2023, those months that were withheld too much or that they paid too much, in June-July they will have a credit corresponding to that payment“, he explained.

When will the income tax and IASS reduction come into effect?

The government seeks to move quickly in the treatment of the project. After Arbleche’s appearance, the Senate is expected to vote on the file This Tuesday March 14. If approved, it will go to the House of Representatives, where a quick discussion and sanction the next day.

From then on, the rule will apply automatically. Biestro asked for the rapid approval of the project so that workers and liabilities see this tax relief reflected in their pockets.

Arbeleche, for his part, announced that the foundations that make the exposed tax reduction possible are in the text that the legislators will not modify or discuss.

Source: Ambito

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