New simplified income tax regime: how it works and when it takes effect

In a press conference held at Casa Rosada, the head of the Revenue and Customs Control Agency (ARCA), Juan Pazo, officially presented the new simplified regime of the Income Tax, aimed at facilitating tax compliance for individuals and reducing the administrative burden for those operating within the formal economy.

What changes with the new regime

The main modification announced is that ARCA will no longer require information on personal consumption and assets, focusing exclusively on income and deductible expenses. "We are not going to require more information on consumption or assets. Personal consumption will no longer go through ARCA," emphasized Pazo.

In that sense, it was reported that consumption of up to $50 million per month in non-registrable goods will no longer be observed by the agency. Even if registrable assets are acquired for larger amounts, such as real estate or vehicles, ARCA will not intervene in the analysis of asset increase as long as the taxpayer is adhered to the new regime.

A simpler and more automated declaration

This scheme will apply to the 2025 fiscal year, starting next June. In May 2026, each person will be able to access their profile on the ARCA website, review the amount determined by the system, and choose to accept, pay, or rectify it according to the available data.

In contrast to the current regime, which requires a complex sworn statement comparable to that of large taxpayers, the new modality automates the tax calculation, simplifying the self-assessment process and reducing documentary requirements.

Pazo highlighted that this transformation "changes the oversight matrix to focus on deliberate and sophisticated informality." The Government's goal is to encourage formalization and facilitate access to credit and economic development.

Criticisms and warnings from the private sector

From the tax sector, Sebastián Domínguez, CEO of SDC Asesores, warned Infobae that the Executive can't modify the Income Tax law by decree, so the announced changes are restricted to ARCA's regulatory scope.

Domínguez explained that the elimination of asset justification—key to detecting fiscal inconsistencies—represents a weakening of the tax authority's control tools. "It allows detecting unjustified increases, inconsistencies between income and consumption, and assets that do not match the declared income," he remarked.

While the new regime simplifies procedures, taxpayers will still need to keep detailed internal records to prevent risks in the event of future reviews.

Despite the criticisms, the Government insists that the reform is part of a tax simplification strategy aimed at promoting sustainable economic growth. In Pazo's words: "We want to create incentives that invite citizens to enter the formal system."