A simplified regime for small enterprises is being discussed by the tax authorities and members of the congress. This regime would apply to enterprises whose turnover does not exceed ARS 300,000, and, under the regime, VAT and income tax would be replaced by a single tax.

There are three categories of taxpayers for this purposes:

a) enterprises with an annual turnover not exceeding ARS 100,000, business premises not exceeding 40 square meters and with only two employees would pay an annual lump-sum tax of ARS 1,500 (VAT) and ARS 200 (income tax);

b) enterprises with an annual turnover between ARS 100,000 and ARS 200,000, business premises of 60 square meters and with five employees would pay ARS 3,000 (VAT) and ARS 800 (income tax); and

c) enterprises with an annual turnover between 200,000 and 300,000, business premises of 200 square meters and with not more than 10 employees would pay ARS 4,500 (VAT) and ARS 1,800 (income tax).

These annual taxes would be payable in instalments. This regime would mean a simplification in the administration of taxes and a lower tax burden for taxpayers.

Taxpayers to which the regime would not apply include joint-stock corporations, sellers of products whose price per unit exceeds ARS 4,000 and businesses that derive more than 10% of total turnover from the sale of imported goods.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Manuel G Diskenstien, Deloitte & Touche, Buenos Aires, Argentina - Tel: +54 1 326 4046, Fax: +54 1 326 7340