ARGENTINA Trends and Developments Contributed by: Daniel Rinci, Tomas Cabanelas, Fernando García and Marisa Majul, Rinci & Asociados
The reform also significantly curtails the circumstanc - es in which the tax authority is required to file crimi - nal complaints. Disputes arising from interpretative or technical-accounting differences, or where the tax - payer proactively discloses their methodology before or simultaneously with filing their return, will generally not trigger criminal proceedings. The same applies where a taxpayer files original or amended returns before receiving notice that an audit has commenced. Argentina’s Labour Modernisation Law Spanning 218 articles across 26 titles, the labour reform represents the most far-reaching change of Argentina’s employment framework in recent years. It has three stated objectives: to curb the country’s notorious litigation culture around employment dis - putes, to bring more workers into the formal economy, and to reduce the administrative burden on employ - ers – particularly small and medium-sized businesses. The reform touches several aspects of the employer- employee relationship: how contracts are structured, how severance is calculated, how working time can be arranged, how strikes are regulated, and how digital One of the most commercially significant changes concerns the calculation of severance pay on dismiss - al without cause. The baseline formula – one month’s salary per year of service – remains intact, but the law now draws a clear line around which payments actually count as salary for this purpose. The 13th- month bonus ( aguinaldo ), accrued holiday pay, and performance bonuses are expressly excluded from the calculation base. For variable-pay employees, the law takes the average of the highest recurring monthly earnings over the previous year, defining “recurring” as payments received in at least six months of the last calendar year. The effect is to narrow the calcu - lation base and reduce the scope for inflated sever - ance claims – a practice that had become a significant source of employment litigation. platform workers are classified. Dedicated funding mechanism The law also introduces a mandatory employer- funded reserve ( Fondo de Asistencia Laboral or FAL) designed to pre-finance future severance obligations. Large companies must contribute 1% of their monthly
payroll to the fund; small and medium-sized enterpris - es contribute 2.5%. The fund is exempt from claims by creditors, managed by entities authorised by the National Securities Commission, and can be drawn upon to cover severance on dismissal, death or vol - untary retirement. Importantly, employers receive an equivalent reduction in their social security contribu - tions, meaning the net additional cost is offset at the outset. The FAL comes into force on 1 June 2026, with a possible six-month extension. This mechanism represents a meaningful conceptual shift: rather than treating severance as a contingent liability that crystallises only upon termination – and is often disputed in court – the FAL converts it into a structured, predictable funding obligation. For finance and accounting teams, the practical consequence is that severance provisioning becomes considerably more straightforward. Redefining what counts as salary The law introduces a new category of “dynamic remuneration components” – discretionary bonuses and merit awards that an employer can grant without those payments becoming an acquired right of the employee. In other words, an employer can now offer performance-linked pay without the risk that a pat - tern of such payments will be treated as contractually guaranteed compensation for severance or other pur - poses. Tips and gratuities are also formally excluded from the definition of salary. Medical coverage, mobile phone and internet expenses, meal allowances and car allowances likewise fall outside the salary defini - tion, removing them from the base for payroll taxes and benefit calculations. The law also permits, for the first time, the payment of salaries in foreign currency – a meaningful develop - ment in a country where the gap between the official and unofficial exchange rates has long created uncer - tainty for multinational employers trying to attract and retain talent by paying in US dollars. A lighter administrative touch Several administrative reforms reduce the day-to- day compliance burden. The obligation to maintain physical payroll books is abolished: registration with the Federal Tax Authority ( Agencia de Recaudación y
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