ARGENTINA: FISCAL INNOCENCE LAW
During the final days of 2025 and throughout 2026, the Argentine Government is expected to advance a comprehensive tax reform agenda, to be implemented in several stages amid an active parliamentary schedule.
As a first step towards modernizing, simplifying, and reducing the overall burden of the Argentine Tax System, on December 27th, 2025, the Argentine Congress enacted Bill No. 14/2025, commonly referred to as the “Fiscal Innocence Law”, introduced by the National Executive Branch. The Law introduces significant amendments to the Tax Criminal Regime and the Federal Tax Procedure Law and establishes a new Simplified Income Tax Return Regime.
Tax Criminal Regime
1.a. Good Faith Presumption
The cornerstone of this reform is a clear and fundamental principle: taxpayers are presumed to act in good faith and considered innocent unless intent (dolus) is duly proven, in line with the Argentine constitutional guarantees and due process standards.
As a result, criminal complaints may no longer be initiated in the absence of clear and substantiated evidence of intent. This change is expected to have immediate and tangible effects, including the termination of a large number of criminal tax cases that were initiated solely based on minimum statutory thresholds, without sufficient evidentiary support.
In practice, this principle translates into the following effects:
-Thousands of criminal cases initiated without sufficient evidence – based solely on the automatic application of minimum thresholds – will be extinguished.
-The amendments to Article 19 of the Tax Criminal Law require the Federal Tax and Customs Authority (“ARCA”) to refrain from filing criminal complaints where, among other circumstances:
-The taxpayer acted based on a reasonable and well-founded interpretative position.
-Tax returns were filed prior to the initiation of an audit.
or
-The taxpayer voluntarily regularized its tax position before enforcement actions were taken.
1.b. Criminal Liability – Monetary Threshold Increase
In response to inflation, the law updates and significantly increases the monetary thresholds that constitute the objective conditions for criminal liability, narrowing the scope of conduct subject to criminal prosecution. The new thresholds are as follows:
–Simple Tax Evasion: threshold increased from ARS 1,500,000 to ARS 100,000,000 per tax, per fiscal year.
–Aggravated Tax Evasion: threshold increased from ARS 15,000,000 to ARS 1,000,000,000 per tax, per fiscal year.
–Aggravated Tax Evasion (Special Cases): threshold increased from ARS 2,000,000 to ARS 200,000,000 per tax, per fiscal year.
–Aggravated Tax Evasion (Special Cases) and Improper Use of Tax Benefits: threshold increased from ARS 1,500,000 to ARS 100,000,000 per tax, per fiscal year.
–Misappropriation of Taxes (Withholding/Collection Agents): threshold increased from ARS 100,000 to ARS 10,000,000 per month.
–Simple Evasion of Social Security Contributions: threshold increased from ARS 200,000 to ARS 7,000,000 per month.
–Aggravated Evasion of Social Security Contributions: threshold increased from ARS 1,000,000 to ARS 35,000,000 per month.
–Aggravated Evasion of Social Security Contributions (Special Cases): threshold increased from ARS 400,000 to ARS 14,000,000 per month.
–Misappropriation of Social Security Resources: threshold increased from ARS 100,000 to ARS 3,500,000.
–Simulation of Payment of Tax and/or Social Security Obligations: threshold increased from ARS 500,000 to ARS 20,000,000 per tax, per fiscal year (for tax obligations), and from ARS 100,000 to ARS 3,500,000 per month (for social security obligations).
These amounts will be adjusted annually as of January 1st, 2027, based on the annual variation of the Purchasing Power Unit (“Unidad de Valor Adquisitivo” – “UVA”) recorded between January and December of the calendar year immediately preceding the adjustment.
For purposes of determining the existence of tax crimes or other offenses, the applicable threshold will be the amount in force at the time the offense was committed.
1.c Settlement Mechanisms and Extinction of Criminal Actions
The bill also revises the so-called “silver bullet” mechanism, allowing the extinction of criminal proceedings through the unconditional payment of the evaded tax, accrued interest, and an additional 50% surcharge on the total amount due. Consistent with this approach, the application of the “full reparation of damage” mechanism under the Criminal Code is expressly excluded.
1.d. Expansion of Grounds to Refrain from Criminal Complaints and Reports
In addition to the amendments introduced to Article 19, the bill further clarifies and expands the circumstances in which the ARCA must refrain from filing criminal complaints. Previously existing grounds – such as disputes arising from statutory interpretation, technical-accounting differences in tax assessments, or adjustments based solely on presumptive methods – are retained and systematized, and the following two new grounds are expressly incorporated:
-The formal disclosure of the taxpayer’s interpretative position through a reasoned filing submitted to the ARCA; and
-Voluntary compliance through the filing of tax returns before the commencement of an audit or inspection process.
- Amendments to the Federal Tax Procedure Law
2.a. Penalties for Formal Obligations Infringements.
The amounts of fines for breaching formal tax obligations provided for under Federal Tax Procedure Law No. 11,683, as amended, are increased.
Among them, the following are noteworthy due to their amounts and/or conceptual relevance:
-Penalties of ARS 10,000,000 are established for failure to file informative tax returns in the case of legal entities, with higher amounts applicable under certain information reporting regimes.
-In the case of transactions carried out between parties located in Argentina and individuals, legal entities, or any other type of entity domiciled, incorporated, or located abroad, the penalty for failure to report is increased from ARS 10,000 to ARS 11,000,000. In the case of vehicles owned by individuals or legal entities domiciled, incorporated, or established abroad, the penalty is increased from ARS 20,000 to ARS 22,000,000.
-The penalty for general non-compliance with formal obligations is increased from ARS 500 to ARS 500,000. Likewise, the maximum penalty applicable for infringements of formal obligations related to tax domicile regulations, resistance to audits, failure to provide information, and failure to retain/keep supporting documentation and price justification for international transactions is increased from ARS 45,000 to ARS 35,000,000.
-The minimum and maximum penalty ranges applicable to failures to report membership in one or more multinational enterprise groups – according to the parameters established by the tax authority – are increased to ARS 6,000,000 and ARS 15,000,000, respectively.
In addition, where the country-by-country report is not filed or is filed late, incompletely, or with errors, the applicable penalty will range between ARS 45,000,000 and ARS 67,500,000.
These amounts will also be adjusted annually as of January 1st, 2027, based on the annual variation of the Purchasing Power Unit (Unidad de Valor Adquisitivo – UVA) recorded between January and December of the calendar year immediately preceding the adjustment.
2.b. Statute of limitations
The bill amends Article 56 of the Federal Tax Procedure Law No. 11,683, as amended, which shall now provide that:
The statute of limitations for the powers of the ARCA to assess and collect taxes, and to enforce penalties and closures, shall be:
–Five (5) years in the case of registered taxpayers, as well as in the case of unregistered taxpayers who are not legally required to register with the ARCA, or who, being required to register and having failed to do so, voluntarily regularize their situation. The said period is reduced to three (3) years where the registered taxpayer has timely filed the relevant tax return and, where applicable, has settled the resulting balance, provided that the tax authority does not challenge the filed return on the grounds of the existence of significant discrepancies between the information reported and that available in its systems or supplied by third parties.
–Ten (10) years in the case of unregistered taxpayers.
–Five (5) years, with respect to tax credits that have been improperly credited, refunded, or transferred, counted from January 1 of the year following the date on which such credits were credited, refunded, or transferred.
-The action for the refund of taxes unduly/wrongly paid shall be time-barred after five (5) years.
-The action to claim the recovery or refund of taxes shall be time-barred after five (5) years. The limitation period shall be counted from January 1st of the year following the date on which such refund becomes claimable.
-The statute of limitations applicable to the actions and powers of the ARCA in connection with the fulfillment of the obligations imposed on withholding and collection agents shall be five (5) years, counted from January 1st of the year following the year in which such obligations should have been fulfilled. The same five (5)-year period shall apply to the imposition and enforcement of the corresponding penalties.
Further, a new Article after the said Article 56 is introduced, which provides that for the above, a significant discrepancy shall be deemed to exist where at least one of the following conditions is met:
(i) Where, as a result of a challenge issued by the ARCA, there is an increase in the tax balances in favor of the said Authorities or, as applicable, a reduction in tax losses or tax credits in favor of the taxpayer or responsible party, by a percentage of not less than 15% compared to the amounts reported by the taxpayer.
(ii) Where the difference between the tax declared and the tax determined as a result of the challenge issued by the ARCA exceeds the amount established in Article 1° of the Tax Criminal Regime, outlined in Title IX of Law No. 27,430, as amended.
(iii) Where, as a result of a challenge issued by the ARCA due to the use of false or sham invoices or other apocryphal documents, there is an increase in the tax balance in favor of the Authorities or, as applicable, a reduction in tax losses or tax credits in favor of the taxpayer or responsible party.
Similar amendments regarding statutes of limitations are introduced in Law No. 23,660 (Social Security Health Funds), Law No. 23,661 (National Health Insurance System), and Law No. 14,236 (Restructuring of the National Social Security Institute), with the applicable limitation periods varying in each case.
Finally, Articles 2532 and 2560 of the Argentine Civil and Commercial Code are amended to eliminate the reference allowing local legislation to regulate tax statutes of limitations. It is expressly established that, with respect to taxes levied by the provinces, the Autonomous City of Buenos Aires, and/or municipalities, the applicable statute of limitations shall be governed by the provisions of the Federal Tax Procedure Law No. 11,683.
- Simplified Income Tax Return Regime
The bill introduces an optional Simplified Income Tax Return Regime for resident individuals and undivided estates that choose so, provided that, as of December 31st of the year immediately preceding the exercise of the option, and during the two (2) preceding fiscal years, concurrently meet the following conditions:
–(a) Total income – taxable, exempt, and/or non-taxable for income tax purposes – of up to ARS 1,000,000,000.
-(b) Total net worth, understood as the aggregate value of assets located in Argentina and abroad – taxable, exempt, and/or non-taxable for purposes of the Personal Assets/Wealth Tax – of up to ARS 10,000,000,000.
and
–(c) They are not classified as “large national taxpayers” under the criteria of the ARCA.
The National Executive Branch may establish additional requirements beyond those set forth above.
Where the ARCA verify that, at the time of opting into the simplified income tax return regime, the taxpayer did not meet the requirements to exercise such option, the former shall exclude the taxpayer from the regime and shall be entitled to carry out the corresponding verification and/or audit procedures with respect to non-statute-barred periods, determine the tax base ex officio, assess any tax differences that may arise, and apply, where applicable, the relevant penalties, in accordance with the Federal Tax Procedure Law No. 11,683, as amended.
Taxpayers choosing this simplified regime will benefit from the following advantages:
- Discharge effect upon payment:
Once the taxpayer that opted for this simplified regime accepts the contents of the tax return proposed by the Revenue and Customs Control Agency and, where applicable, makes payment thereof in due time, the taxpayer’s obligations in respect of Income Tax for that given fiscal year shall be deemed fully satisfied, both formally and substantively – except where omissions, improper deductions, or the use of false or sham invoices or other apocryphal documentation are detected.
- Presumption of accuracy:
The accuracy of the Income Tax and Value Added Tax returns filed for non-statute-barred periods shall be presumed, without admitting evidence to the contrary, except where the ARCA challenges the relevant tax returns and identifies a significant discrepancy between the information reported and the information available in their systems or provided by third parties. In such cases, the Authorities may extend verification and/or audit procedures to non-statute-barred periods, assess the tax base ex officio, determine tax differences, and apply the penalties provided for under the Federal Tax Procedure Law No. 11,683.
For purposes of the above, a significant discrepancy shall be deemed to exist where at least one of the following conditions is met:
–(i) Where, as a result of a challenge issued by the ARCA, there is an increase in the tax balances in favor of the said Authorities or, as applicable, a reduction in tax losses or tax credits in favor of the taxpayer or responsible party, by a percentage of not less than 15% compared to the amounts declared by the taxpayer.
-(ii) Where the difference between the tax declared and the tax determined as a result of the challenge issued by the ARCA exceeds the amount established in Article 1 of the Tax Criminal Regime, outlined in Title IX of Law No. 27,430, as amended.
-(iii) Where, as a result of a challenge issued by the ARCA, due to the use of false or sham invoices or other apocryphal documents, there is an increase in the tax balance in favor of the said Authorities or, as applicable, a reduction in tax losses or tax credits in favor of the taxpayer or responsible party, provided that the taxpayer does not amend the challenged tax return on such grounds and does not pay the corresponding tax difference, together with accrued interest.
Overall, the reform reflects a clear policy shift toward legal certainty, proportionality, and voluntary compliance, while maintaining robust enforcement mechanisms for cases involving material and intentional non-compliance.