How accounting information and taxes were destroyed
difference of wholesale inflation, As measured by INDEC, it was 1843% since the end of 2001, not counting the months of November and December 2015, for which no information has been published.
The rest includes the inflation that occurred from 2002 to March 2003 inclusive, reaching 118%, and therefore leaving most of the price variation unrecognized. These indices should also be used to adjust for each taxon, but have only been recognized in a limited number of cases. A project to create a Tax Value Unit, which would make it possible to update certain taxes, is dormant in Congress.
Adjustments for accounting inflation began to appear in the 2018 balance sheet, where the tax previously had the ability to update at the taxpayer’s expense who decided to do it in 2017. In 2019, the income tax inflation adjustment was reintroduced, but by then it was too late. However, to take advantage of it, certain levels of annual inflation (55%, 30% and 15%) had to be overcome and there were limits to its full implementation, as the result could be calculated annually. Could. Payments, which have not been adjusted for inflation.
Moreover, from the moment it was agreed to recognize inflation, the decision was made change fit index, ranging from the wholesaler to the consumer. This happened despite the fact that the former better measures the change in average prices in an economy. In fact, it was modified for the simple fact that its annual variation did not exceed the inflation percentage that allowed the adjustment.
Those who have not used the discount option, provided by the revaluation law, can now only adjust the costs of fixed assetsAmong others, which were inducted in 2018, all of the above are considered at historic values.
Accounting inflation adjustments begin to be reflected in the balance sheet in 2018
rules that prohibit updating
in accounting matters, Decree 664 of the year 2003determined that the various control bodies (General Control of Justice, National Securities Commission, AFIP, Central Bank, etc.) should not accept inflation-adjusted financial statements.
On the other hand, accounting standards recommend applying inflation adjustment In the financial statements when the difference in wholesale prices for the last three years exceeds a multiple of 100%. If the update applies to the balance, all non-cash items and income statements should be adjusted. All the while, decisions taken by shareholder meetings are invalid if, for example, they delivered historical results, because they were not adjusted for inflation, were fictitious.
If the consumer price indices, which were prepared by INDEC, can be questioned, it seems that this is not the case for wholesale prices, which have recorded twice as much variation from 2002 to today. than before. The question that must be asked is why this inflation has not passed on to retail prices.
On the tax side, Laws 24,073 and 25,561 adjust inflation to various minimums, deductions, scales, balances in favor, and other variables affecting taxes.
Accounting standards recommend applying inflation adjustments to the financial statements when the change in wholesale prices over the last three years exceeds a multiple of 100%.
How does devaluation affect taxes?
towards change in exchange rate, the variation of different dollar quotes notoriously changes the costs and causes there to be winners and losers. These increases were passed on to the prices of goods and services, thus affecting the liquidation of the taxes collected. This is the main reason for the increase in tax collection.
For companies and individuals, fluctuations in the value of the dollar are not trivial, with consequences ranging from their formal problems to the effects of exchange differences in the payment of national and provincial taxes.
By Emergency Law (25,561) The ban on including an indexation clause in invoices is maintained. In the meantime, the convertibility law (23,928) still allows an operation to be invoiced in dollars. Currently, you can bill in dollars. However, in this case, the customer receiving the dollar invoice will have difficulty making the payment.
If you have settlement-backed notes official foreign exchange marketYou cannot deliver them because in this way you will not comply with the anti-theft law (25,345) which requires that any bank payment in foreign currency be one thousand pesos or its equivalent.
complicate things further The dollar has no current account, they also cannot be transferred by the bank, leaving only the possibility of crediting the amount remaining due on the invoice to the supplier’s savings account, a mechanism authorized by the anti-theft law. But in this case, tax must be paid on the debit and credit.
Variations in the price of individual dollars dramatically change the cost and create winners and losers.
devaluation of taxes
In value added tax, When an invoice issued in dollars considering the price of the ticket on the date of payment is paid in pesos later, the total exchange difference according to the AFIP rule (31/03) generates a new financial debit to be made will be paid by the taxpayer. The final invoice price should be compared to the total amount paid, VAT is calculated on the difference. Similarly, this amount includes the gross income tax base determined for each jurisdiction.
In property tax Payments from individuals, assets expressed in dollars at December 31 or at the end of the financial year, must be converted into the quoted value of the foreign currency at that date. For example, if a person has dollars in a safe or “mattress” when paying for personal property, he should calculate them to the estimated value of the invoice at the end of the year.
In terms of Income taxThose resulting from the purchase and sale of foreign currencies on the official foreign exchange market are exempt from income tax.
He doesn’t even have a criminal record. profit resulting from the difference in price of dollar or euro assetsgenerated at the end of the year. On the other hand, companies must include the result of sales in dollars at the end of the financial year and the higher values resulting from their ordinary possession, which serves as the basis for the calculation of income tax.
It is important to remember that any operation carried out using foreign currencies must be justified in order to obtain a good or contract a service. tax justification in the tax return. For example, prior to the purchase of dollar assets, the foreign currency must appear in affidavits filed with AFIP. Similarly, all note movements recorded in tax returns must be backed by official foreign exchange market regulations.
All the above shows that inflation and devaluations, to the extent that they are not recognized, harm all taxpayers and benefit only the state.