The Argentine Senate will this Friday consider the so-called Law of Fiscal Innocence, an initiative pushed by the Executive Branch. The law seeks to introduce structural changes to the country's tax system, with the stated objective of simplifying the system, reducing criminal litigation, and redefining the scope of fiscal controls over individuals and companies. The ruling party hopes to pass the norm during the session scheduled for today, in parallel with the debate on the 2026 Budget. The project provides for profound modifications to the Tax Criminal Regime (Law 24.769), the Fiscal Procedure Law (11.683), the National Civil and Commercial Code, and creates a new Simplified Affidavit Regime. The core of the proposal is based on the idea of 'fiscal innocence,' a concept that, according to the Government, aims to reverse the logic of presumption of guilt and grant greater predictability to compliant taxpayers. One of the central axes is the creation of a Simplified Regime for the Income Tax. The regime establishes a wealth cap of up to 10 billion pesos to be eligible and eliminates the obligation to report asset variations, as well as control over personal consumption. In practice, this means that the revenue agency, ARCA, will only levy the Income Tax on the income effectively billed by the taxpayer. For the ruling party, the Law of Fiscal Innocence represents a tool to expand the taxpayer base, improve revenue collection, and reduce criminal prosecution. On that taxable base, the corresponding deductions will be applied, without considering potential asset increases that, under this scheme, will not be subject to scrutiny. Article 39 of the project introduces another relevant point by establishing the so-called 'liberatory effect of payment.' The change implies a significant reduction in the universe of taxpayers covered by the criminal regime. Another central aspect is the reduction of the statute of limitations for tax obligations, which drops from five to three years. In particular, fines for the late filing of affidavits are increased, in an attempt to compensate for the relaxation of other controls. The debate in the Senate takes place in a context of strong political and technical discussion. This mechanism seeks to reduce the judicialization of tax conflicts and accelerate the regularization of debts. The initiative also redefines the thresholds that configure tax crimes. Furthermore, it is established that ARCA will not initiate criminal actions if the taxpayer pays the debt and the corresponding interest, although this benefit can only be used once per person or company. In cases where the criminal complaint has not yet been formalized, the project provides for the extinction of the action if the taxpayer regularizes their situation within 30 business days from the notification of the accusation, by paying an additional 50 percent on the amount owed. For a conduct to be considered aggravated tax evasion, the floor rises to be over 1 billion pesos, when until now it was around 15 million. According to the official initiative, those who adhere to this scheme will be 'shielded' from future asset reviews. In the case of simple tax evasion, the minimum amount is raised from 1.5 million pesos to 100 million.
