ARCA: A small business can submit up to 89 sworn statements a year and face fines of up to $10 million

A small business employer can submit up to 89 sworn statements to the Revenue and Customs Control Agency (ARCA) in a year. Until recently, it was only 25, but the inclusion of new modalities has led to an increase in these types of requirements.

In the case of a plumber working as a self-employed individual, the number of annual sworn statements increased from 14 to 38. This is noted by Miriam Roldán, one of the tax specialists who is part of the group that usually meets with the Minister of Economy, Luis Caputo, to discuss fiscal issues. The expert warns that the proliferation of documents makes taxpayers more exposed to non-compliance and to receiving fines.

"Today, not only has the number of sworn statements multiplied, but also the risk of falling into non-compliance. Between informative and determinative statements, a Registered Responsible (RI) small business employer must submit 89 sworn statements a year," Roldán explained to Ámbito.

The penalties for non-compliance in a simple informative statement before ARCA range from $220,000 to $440,000 and are applied automatically upon detection of the violation. In the cases of determinative tax statements, the fines range from $5 million to $10 million.

Roldán recalled that when what was AFIP began applying fines, there was the figure of the Non-Registered Responsible, who, as they did not pay VAT, only paid their retirement and health insurance, and submitted one sworn statement a year. That figure no longer exists.

The situation is more complex now. With the enactment of the Tax Innocence Law, the fines applied by ARCA for non-compliance in the submission of the corresponding documentation have also been updated. One of the problems identified by Roldán is that the sanctions lack proportionality. A self-employed person without employees and a large company pay the same for failing to submit an informative statement on time to ARCA.

In the last meeting that tax specialists held with Caputo, Roldán handed him a draft of a bill to modify the fine regime. The proposal seeks to establish greater proportionality and to grant longer deadlines before ARCA applies a sanction.

The document, accessed by Ámbito, proposes that, for microenterprises and individuals, there be an 80% reduction in fines; for small businesses, a 60% reduction; for medium-sized businesses tier 1, a 40% reduction; and for medium-sized businesses tier 2, up to a 20% reduction.

On the other hand, it seeks to eliminate automatic fines. In this scheme, ARCA should first notify the taxpayer of the non-compliance. From that moment, a grace period would begin, which would be 90 days for microenterprises and individuals, 60 days for small businesses, 45 days for medium-sized businesses tier 1, and 30 calendar days for medium-sized businesses tier 2.

Once these deadlines expire, ARCA would then be in a position to notify the taxpayer of the application of the fine (with the anticipated discounts), who, if they rectify the non-compliance within 15 days, would avoid paying the penalty.

"The nominal update provided by Law No. 27.799 responded to a logic of inflationary adjustment but failed to consider the taxpayer's ability to contribute," states the draft of the project justifying the initiative.

In this sense, it argues that "the harmful entity of the sanction is not measured in absolute nominal terms, but in its proportion relative to the economic capacity of the subject". It maintains that "a uniform minimum burdens equally those who invoice millions and those who earn a subsistence income, becoming confiscatory for the small taxpayer ---in conflict with Article 17 of the National Constitution--- while being practically insignificant for the large taxpayer".

Disclaimer: This content is provided for general branding and informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online events, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets or to use any services. Crypto assets are highly volatile and may result in loss. WEEX services and online events may not be available in all regions and are subject to applicable laws, regulations, and eligibility requirements. You are responsible for ensuring that your use of WEEX services complies with local laws and for carefully assessing the risks before participating in any crypto-related activities.