Argentina | “Fiscal Innocence II”: New Rules for Simplified Income Tax Returns, Tax Audits and Formalization of Funds
On the late evening of September 17th, 2026, the National Chamber of Deputies approved a new package of measures commonly referred to as “Fiscal Innocence II” (“Inocencia Fiscal II”), introducing significant amendments to the Simplified Income Tax Return Regime established under Law No. 27,799 and related provisions of Tax Procedure Law No. 11,683.
The reform goes well beyond simplifying the Income Tax filing process. It establishes a broader framework governing access to the simplified regime, the presumption of accuracy afforded to participating taxpayers, the circumstances in which the Argentine Tax and Customs Authority (ARCA) may challenge that presumption, the evidentiary standards applicable to tax audits, the use and formalization of funds through regulated financial channels, the interaction with AML/CFT controls, and the treatment of pending tax proceedings.
Separately, the law substantially updates the penalty framework applicable to failures involving the registration of rural workers and employers under Law No. 25,191.
🔎 Key Takeaways
1. Expanded Access to the Simplified Income Tax Return Regime
The reform expands access to the simplified Income Tax return mechanism.
The regime applies to individuals and undivided estates resident in Argentina for tax purposes that elect to use the simplified Income Tax return implemented by ARCA.
As a general rule, taxpayers exercising the option to join — or, where applicable, remain within — the regime must maintain Argentine tax residence throughout the entire fiscal period covered by the simplified return.
If the ARCA determines that this residence requirement has not been met, the taxpayer will be excluded from the regime, and ARCA will be entitled to carry out the corresponding verification and/or audit procedures, determine the taxable amount ex officio, assess any resulting differences and, where applicable, impose the relevant penalties.
The option is available for fiscal periods beginning on or after January 1st, 2025.
A specific transitional rule applies to fiscal year 2025: the requirement to maintain Argentine tax residence throughout the entire fiscal period does not apply to taxpayers exercising the option for that year.
2. National Large Taxpayers: access, but without broader protection
Taxpayers classified by ARCA as National Large Taxpayers may also elect — or remain within — the simplified filing mechanism. However, their participation is limited to filing the Income Tax return and, where applicable, making the corresponding payment on time under the simplified modality.
Importantly, their adherence or continued participation does not entitle them to the remaining effects, presumptions, or benefits established under the regime.
This distinction is particularly relevant for multinational groups and large businesses: access to the simplified filing mechanism does not necessarily imply access to the broader substantive safeguards associated with the regime.
3. When Can ARCA Challenge the Regime? The “Significant Discrepancy” Test
A central feature of the reform is the establishment of more precise circumstances in which ARCA may determine that a “significant discrepancy” (discrepancia significativa) exists.
A significant discrepancy arises where at least one of the statutory conditions is met.
A discrepancy may arise where ARCA’s adjustment results in an increase in the tax assessed or, where applicable, a reduction in tax losses of at least 15% compared with the amount declared by the taxpayer.
However, an important minimum threshold applies specifically to this percentage-based test.
Even where the 15% threshold is reached, a significant discrepancy is not deemed to exist under this test where the resulting difference does not exceed a minimum amount equivalent to 5% of the amount established in Article 1° of the Tax Criminal Regime.
Alternative monetary threshold: Independently of the percentage test, a significant discrepancy also exists where ARCA’s adjustment results in an increase in the tax assessed or, where applicable, a reduction in tax losses that exceeds the amount established in Article 1° of the Tax Criminal Regime under Law No. 27,430.
False documentation and improperly claimed direct payments: A significant discrepancy may also arise where the ARCA’s adjustment results from:
- the use of false or fraudulent invoices or other documents; or
- improperly claimed direct payments, including withholding taxes, collection taxes, payments on account and advance payments,
and results in an increase in the assessed tax or balance payable to the Treasury or, where applicable, a reduction in tax losses or taxpayer credit balances.
The framework therefore combines relative materiality, absolute monetary materiality and specific anti-abuse triggers.
4. Presumption of Accuracy and Its Interaction with VAT
One of the most significant benefits of the simplified regime is the presumption of accuracy attached to qualifying filings and its effects on periods that remain open under the statute of limitations.
Fiscal Innocence II clarifies how this protection operates in relation to VAT. For purposes of the regime, the relevant non-prescribed VAT periods are those extending through December, inclusive of the Income Tax fiscal year for which the taxpayer exercised the simplified-regime option.
Moreover, for VAT periods corresponding to the same fiscal year for which the simplified Income Tax return is filed, the presumption of accuracy applies unless ARCA detects the use of false invoices or other documents or improperly claimed direct payments, including withholding taxes, collection taxes, payments on account and advance payments.
The provision therefore provides greater certainty regarding the interaction between the annual Income Tax regime and the corresponding monthly VAT periods.
5. The ARCA Bears the Burden of Proof
One of the most taxpayer-relevant elements of the reform concerns the burden of proof. The burden of establishing whether a significant discrepancy exists falls exclusively on ARCA.
For this purpose, the ARCA may rely solely on:
- information declared by the taxpayer;
- information available in ARCA’s systems; and
- information provided by third parties.
Any other consideration taken into account by ARCA for purposes of asserting the existence of a significant discrepancy has no evidentiary value for purposes of challenging the Simplified Income Tax Return Regime. This provision establishes clearer evidentiary boundaries around ARCA’s ability to displace the protective effects of the regime.
6. A 15-Business-Day Corrective Mechanism
The law also introduces an important opportunity to regularize certain differences. For purposes of determining whether a significant discrepancy exists, the difference between the taxpayer’s original simplified return and an amended return is disregarded where:
- the amended return is filed within 15 business days following notification of the administrative assessment under Article 14 or the ex officio determination referred to in Article 17 of Law No. 11,683; and
- the tax balances resulting from the amended return, together with the corresponding interest, are duly paid and/or regularized.
The mechanism therefore provides taxpayers with a limited corrective window before the relevant difference is taken into account in determining whether a significant discrepancy exists.
7. Restrictions on the ARCA’s Use of Statutory Presumptions
The reform further restricts ARCA’s ability to rely on certain statutory presumptions under Article 18 of Tax Procedure Law No. 11,683. During the period contemplated by the new Article 40 bis of Law No. 27,799, the presumptions contained in Article 18(f) and (g) do not apply when determining whether a significant discrepancy exists.
The remaining indicators and presumptions contained in Article 18 cannot constitute the exclusive basis for establishing such a discrepancy. Instead, they may only operate as indicia and must be corroborated through: information declared by the taxpayer; information available in ARCA’s systems; or information provided by third parties.
This limitation complements the burden-of-proof rule and reinforces the evidentiary framework governing challenges to the simplified regime.
8. Formalization and Use of Funds Through the Regulated Financial System
Another central component of Fiscal Innocence II concerns the manner in which participating taxpayers conduct their transactions. Taxpayers electing the simplified Income Tax return must channel their transactions through means authorized by the BCRA and/or CNV for entities subject to their respective regulatory powers. Importantly, this requirement is considered satisfied where the relevant authorized means within the formal financial system are used either at the origin or at the destination of the transaction.
9. Special rule for real-estate transactions
The requirement is also deemed satisfied with respect to funds used for cash payments made upon execution of public deeds creating, modifying, declaring or extinguishing rights in rem over real estate.
Until December 31st, 2027, funds used in accordance with this special rule by taxpayers covered by the presumption of accuracy receive the treatment provided for in the third paragraph of Article 40 of Law No. 27,799.
For Wealth/Personal Assets Tax purposes, those funds are deemed incorporated into the taxpayer’s assets on the date on which the relevant transaction takes place.
This aspect of the reform creates an important connection between tax simplification, the formalization and use of funds, and Argentina’s regulated financial system.
10. AML/CFT Implications: A Favorable Antecedent, but Not an AML Exemption
Fiscal Innocence II also establishes a direct interaction between the simplified tax regime and Argentina’s AML/CFT framework.
Proof of adherence to the Simplified Income Tax Return Regime must be considered by obliged entities under Article 20 of Law No. 25,246 as a favorable antecedent in the identification and monitoring of transactions carried out by participating taxpayers.
The Financial Intelligence Unit (UIF) must issue complementary regulations implementing this provision. Importantly, however, adherence to the regime does not eliminate existing AML/CFT obligations. Obliged entities remain subject to their obligations concerning prevention of money laundering, terrorist financing, financing of proliferation of weapons of mass destruction; and customer due diligence in accordance with UIF regulations.
11. New ARCA verification mechanisms
The ARCA must establish automated consultation services and/or application programming interfaces (APIs) enabling obliged entities to verify a customer’s status under the Simplified Income Tax Return Regime.
These mechanisms must allow verification of whether the taxpayer:
- is enrolled in the regime;
- has been excluded from the regime; or
- has requested withdrawal from it.
The UIF must issue the corresponding complementary regulations within 15 business days following publication of the law in the Official Gazette.
For banks, fintechs, payment service providers, securities intermediaries and other AML obliged entities, these implementing rules will be particularly relevant in determining how the favorable antecedent associated with the regime should be incorporated into existing risk-based customer due diligence and transaction-monitoring processes.
12. What Happens if ARCA Challenges the Regime and the Taxpayer Ultimately Prevails?
The law establishes an important restitution mechanism where ARCA challenges a taxpayer’s simplified filing based on an alleged significant discrepancy. If the ex officio determination through which the ARCA challenges the simplified regime is subsequently annulled, revoked, or otherwise set aside by a final or accepted administrative or judicial decision favorable to the taxpayer, the presumption of accuracy applicable to the affected periods is fully restored.
The law further provides that the effects are returned to the situation existing before the challenge, treating the verification and audit of those periods as having not been properly enabled.
Where the taxpayer paid ARCA’s tax claim during the relevant administrative or judicial proceedings, ARCA must refund the amount paid, together with interest calculated at the rate applicable to tax refund claims.
The refund must be made within 45 business days following notification of the final or accepted administrative or judicial decision favorable to the taxpayer.
13. Pending Audits and Proceedings Are Not Automatically Terminated
Joining the simplified regime does not automatically terminate tax proceedings already underway. Audit orders, administrative assessments and ex officio determination proceedings under Law No. 11,683 that were notified before the taxpayer exercised the option to join the simplified regime remain valid and may continue. Administrative appeals and judicial proceedings pending at that date are likewise unaffected.
Nevertheless, the law provides specific relief concerning penalties. Taxpayers joining the simplified regime who, before joining, had fully paid or regularized the tax and compensatory interest relating to ARCA adjustments concerning Income Tax and/or VAT periods covered by the presumption of accuracy are exempt from penalties under Articles 45 and 46 of Law No. 11,683, provided those penalties were not already final when the option was exercised.
For these purposes, the payment or regularization requirement is deemed satisfied where, before exercising the option, the taxpayer accepted ARCA’s tax claim and made the corresponding payment; or joined a valid payment facility plan.
However, if the payment plan subsequently lapses, the penalty exemption ceases to apply, and the penalty is reinstated in full.
Importantly, the exemption is perfected only where the taxpayer waives the right to initiate a refund action in respect of the tax and compensatory interest paid and/or regularized in connection with the relevant penalty.
14. RENATRE: New Penalty Framework for Rural Employment Registration
Fiscal Innocence II also introduces a separate reform to Law No. 25,191 concerning failures to register with the National Registry of Rural Workers and Employers (RENATRE) and failures or omissions relating to the registration or reporting of rural employment contracts.
The new penalty ranges are:
- Minor infringements: inconsistent reporting of the employment contract is subject to a penalty ranging from ARS 120,000 to ARS 187,500 per affected worker or globally by establishment where individual identification is not possible.
- Serious infringements: false reporting of the rural employment contract is subject to a penalty ranging from ARS 375,000 to ARS 1,500,000 per affected worker or globally by establishment where individual identification is not possible.
- Very serious infringements: complete omission of the rural employment contract declaration is subject to a penalty ranging from ARS 1,500,000 to ARS 7,500,000 per affected worker or globally by establishment where individual identification is not possible.
In the event of recurrence within the previous five years, the maximum amounts applicable to very serious infringements may be increased by up to 50%.
15. Automatic annual UVA adjustment
Beginning January 1st, 2027, the fixed base amounts contained in the penalty scales are adjusted annually according to the annual variation of the Unidad de Valor Adquisitivo (UVA) between January and December of the immediately preceding calendar year. The RENATRE must publish the applicable tables for each calendar year. The amounts resulting from each annual adjustment apply to proceedings and infringement reports initiated during the corresponding calendar year. For purposes of paying a penalty, the amount in force at the time of payment is taken into account.
📅 As a general rule, Fiscal Innocence II enters into force on the date of its publication in the Official Gazette and takes effect from that date, subject to the specific exceptions established by the law.
The provisions governing the Simplified Income Tax Return Regime apply to fiscal periods beginning on or after January 1st, 2025.
The requirement to maintain Argentine tax residence throughout the entire fiscal period does not apply to taxpayers exercising the simplified-regime option for fiscal year 2025.
The revised RENATRE penalty provisions apply to infringements whose material occurrence is established after the law enters into force.
Automatic annual adjustment of the RENATRE penalty amounts begins on January 1st, 2027.
🎯 Why Does Fiscal Innocence II Matter?
Fiscal Innocence II should not be viewed merely as another simplification of Argentina’s Income Tax filing procedures.
The reform creates a broader framework combining simplification, presumptions of accuracy, more objective limitations on tax audits, formalization of transactions and funds, and greater interaction between tax administration and AML/CFT controls.
For taxpayers eligible for the full benefits of the regime, the combination of quantitative materiality thresholds, an express burden of proof on ARCA, restrictions on statutory presumptions and a corrective filing mechanism may provide greater predictability regarding the circumstances in which the protective effects of the regime may be displaced.
At the same time, those benefits operate within a framework that encourages the use of regulated financial channels and creates a direct connection with Argentina’s AML/CFT regime.
For multinational groups and large businesses, particular attention should be paid to the treatment of National Large Taxpayers. Although these taxpayers may access the simplified filing mechanism, they do not obtain the broader presumptions and benefits available to other qualifying taxpayers.
For banks, fintechs, payment service providers, securities intermediaries and other AML obliged entities, the reform creates a new operational intersection between tax compliance and AML/CFT procedures.
Adherence to the simplified regime must be treated as a favorable antecedent, but it does not replace customer due diligence or other AML/CFT controls.
The forthcoming UIF regulations and ARCA’s automated verification mechanisms will therefore be particularly important in determining how this information should be incorporated into existing risk-based compliance frameworks.
For individual taxpayers, the reform may materially affect the analysis of whether to opt into the simplified regime, particularly in light of the presumption of accuracy, the new significant-discrepancy thresholds, the limitations imposed on ARCA’s evidentiary tools, the corrective mechanism, and the rules governing the use and formalization of funds.