Although the law introduces several reforms, the most important point to analyze is contained in the name given to the reform: “tax innocence.” The root of this concept lies in a presumption that ARCA applies called “unjustified increase in assets” according to which, when undeclared assets or funds of a person are detected, it is presumed that they were obtained through undeclared income. This has tax consequences – for collecting the tax that is presumed to have been evaded – and criminal consequences for the presumed evasion.
The Law passed then attacks both fronts: it excludes criminal complaints based exclusively on presumptions, and establishes that, for subjects who adhere to the simplified sworn declaration regime that the Law establishes, their sworn statements cannot be reviewed based on the unjustified increase in assets. This reform would aim to promote that people who have dollars “in their mattress” can introduce them to the formal financial circuit without fear of being exposed to ARCA, and without having to declare them as laundering.
Now, what is the simplified sworn declaration regime about? Human persons – not companies – that have a turnover of less than one billion pesos and have assets of less than ten billion pesos, instead of preparing their own earnings declaration, can accept the one sent by ARCA based on the information available to them, enjoying a “liberatory effect.” ARCA may only challenge the declaration if it detects, in the last fiscal period declared (i) a difference greater than 15% of what was declared; (ii) a difference greater than 100 million; or (iii) the use of apocryphal invoices. As already mentioned, the detection of undeclared assets or funds alone does not give rise to review.
But, if ARCA can challenge the last statement when the differences are not insignificant, where is the “liberating effect” of which it speaks? The key point is that the review only takes place if these differences are detected in the last fiscal period. That is to say, as long as the last statement is correct, the previous ones could not be revised.
In our opinion, two important questions remain to be defined. On the one hand, the regulations should reinforce and clarify the issue of differences in the “last fiscal period”.
On the other hand, and in relation to the shielding of “fiscal innocence”, it would be necessary to clarify what happens in the event that differences are detected in a taxpayer in the last period and he has also externalized undeclared assets.
Daniel Fernando Rinci
Tax lawyer and accountant
[email protected]
Rinci & Associates Studio – www.estudiorinci.com
by CONTENTNOTICAS
