ARGENTINA: FISCAL INNOCENCE II LAW
📢 Law No. 27,826, published on October 9th, 2026 – “Fiscal Innocence II Law” -, builds upon Law No. 27,799 (the Fiscal Innocence Law), introducing further changes in an attempt to rebalance tax enforcement, taxpayer rights, and financial transparency.
While the original Fiscal Innocence Law introduced substantial changes to the Tax Criminal Regime, including increased criminal tax thresholds, simplified income tax reporting, and new tax enforcement rules, Fiscal Innocence Law II (an informal designation) focuses on strengthening taxpayer safeguards, refining the application of the simplified regime, and introducing additional tax penalty relief.
🔎 KEY DEVELOPMENTS
1️⃣ Significant Tax Discrepancies: clearer rules, stronger protections
The reform refines the circumstances under which Argentina’s Tax Collection and Customs Control Agency (ARCA) may challenge taxpayers’ declarations.
A significant discrepancy may arise where tax adjustments exceed 15% of the amounts originally declared, exceed the applicable criminal tax threshold, or involve fraudulent documentation or improperly claimed tax credits.
For taxpayers under the Simplified Income Tax Return Regime, an additional minimum monetary threshold applies to the 15% test.
Crucially, the ARCA bears the exclusive burden of proving a significant discrepancy, based on specified taxpayer, administrative, and third-party information.
2️⃣ Presumption of accuracy: limiting discretionary tax audits
Building upon the original Fiscal Innocence Law, the new legislation strengthens the presumption of accuracy associated with simplified income tax returns.
- Restrictions on certain presumptive tax assessments.
- Specific safeguards for amended tax returns filed within 15 business days, subject to payment or regularization requirements.
- Clarification of the presumption’s application to relevant VAT periods.
- Reinstatement of taxpayer protections where ARCA’s challenge is definitively overturned.
Where taxpayers have paid a disputed assessment that is subsequently overturned, ARCA must refund the amount, plus applicable interest, within 45 business days following notification of the favorable final decision.
3️⃣ Tax penalty relief: 25% and 50% reductions
The reform introduces two distinct mechanisms:
- 25% automatic reduction in certain formal tax penalties for qualifying MSMEs, individuals, undivided estates, and nonprofit entities.
- 50% special reduction for certain pre-existing formal violations, including eligible penalties that have become final but remain unpaid.
The special reduction is conditional upon compliance with the underlying obligation, acceptance of the remaining penalty, and waiver of related challenges.
The objective is clear: encourage regularization while preserving enforcement mechanisms.
4️⃣ Simplified Income Tax Reporting: expanded access, differentiated benefits
The Law clarifies eligibility and tax residency requirements under the simplified regime.
National Large Taxpayers and certain current or former public officials may use simplified filing procedures, but without access to the regime’s broader presumptions and substantive protections.
The option is available for fiscal years beginning on or after January 1, 2025, subject to specific transitional provisions.
5️⃣ The Compliance Dimension: financial traceability meets AML/CFT
Taxpayers participating in the simplified regime must generally conduct transactions through financial channels authorized by the BCRA and/or CNV, subject to specific exceptions, including certain real estate transactions.
Moreover:
- Enrollment in the simplified regime must be considered a favorable factor in AML/CFT customer identification and transaction monitoring.
- ARCA must establish automated verification mechanisms and APIs.
- Financial institutions and other obliged entities remain fully subject to customer due diligence and AML/CFT obligations.
Tax simplification does not mean exemption from financial transparency or AML/CFT controls.
6️⃣ Rural employment: revised penalties
The Law also updates penalties for rural employment registration violations, with fines ranging from ARS 120,000 to ARS 7.5 million, depending on severity, and annual UVA-based adjustments beginning in 2027.
📅 Effective Date: October 9th, 2026, subject to specific transitional provisions applying to fiscal years beginning January 1st, 2025, and specific transitional exceptions. The law also introduces revised penalties for rural employment registration violations and annual UVA-based adjustments beginning in 2027.
💡 Takeaway:
Fiscal Innocence II is not simply about trusting taxpayers more. It is about redefining how that trust is established, verified, and protected. The real challenge will be ensuring that the implementation of these reforms delivers genuine legal certainty without creating new compliance burdens or weakening financial integrity safeguards.
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