How Accounting Information And Taxes Were Destroyed

difference of wholesale inflation, As measured by the INDEC, it was 1843% since the end of 2001, without including the months of November and December 2015, for which no information was published.

The remainder includes inflation that occurred from 2002 to March 2003, inclusive, reaching 118%, and thus leaving most of the variation in prices unrecognized. These indices should also be used to adjust for each taxa, but were recognized only in a limited number of cases. A project to create a Tax Value Unit, which would make it possible to update some taxes, sleeps in Congress.

Adjustments for accounting inflation began to be seen in the balance in the year 2018, while the tax earlier had the option to update at the expense of the taxpayer who decided to do so in 2017. By 2019, inflation adjustment in income tax was reintroduced, but by then it was too late. However, to take advantage of this, certain levels of annual inflation (55%, 30% and 15%) had to be overcome and there were limits to being able to implement it in full, as the result could be calculated annually. Could. Installations, which were not adjusted for inflation.

Moreover, from the moment it was accepted to recognize inflation, the decision was taken change fit index, going from wholesaler to consumer. This happened despite the fact that the former better measures the change in average prices in an economy. In fact, it was changed to the simple fact that its annual variation did not exceed the inflation percentage which enabled the adjustment.

Those who did not use the update option, which the revaluation law provided, can now only adjust the costs of fixed assetsAmong others, which were induced in 2018, all of the above are considered at historical values.

Adjustments to accounting inflation 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 controlling bodies (General Oversight of Justice, National Securities Commission, AFIP, Central Bank, etc.) were not to accept inflation-adjusted financial statements.

On the other hand, accounting standards recommend applying inflation adjustment In the financial statements when the variance of wholesale prices for the last three years exceeds a multiple of 100%. If the update applies to the balance, all non-monetary items and income statements must be adjusted. All that time, decisions made by shareholders’ meetings are invalid if, for example, they delivered historical results, because they were not adjusted for inflation, were fictitious.

While the consumer price indices, which were prepared by INDEC, can be questioned, this appears not to be the case with wholesale prices, which recorded twice as much variation from 2002 to the present as before. The question that must be asked is why this inflation has not been transferred to retail prices.

From the tax side, statutes 24,073 and 25,561, adjust for inflation at various minimums, deductions, scales, balances in favor and other variables affecting taxes.

Accounting standards recommend applying inflation adjustments to financial statements when the variation in wholesale prices over the past three years exceeds a multiple of 100%.

How does devaluation affect taxes?

toward change in exchange rate, the variation of different dollar quotes notoriously alters the costs and generates that there are winners and losers. These increases were transferred to the prices of goods and services, thus affecting the liquidation of the taxes collected. This is the main reason which explains the increase in tax collection.

For companies and individuals, changes in the value of the dollar are not harmless, with consequences ranging from their formal issues to the effects of exchange differences in the settlement of national and provincial taxes.

billing in dollars

By Emergency Law (25,561) The prohibition on the inclusion of an indexing clause in invoices continues. Meanwhile, the convertibility law (23,928) still allows the invoicing of an operation to be done in dollars. Currently you can bill in dollars. However, in this case, the customer receiving the invoice in dollars will have problems making the payment.

If you own banknotes backed by settlements official exchange marketYou cannot deliver them because in this way you will fail to comply with the Anti-Theft Law (25,345) which requires all payment banking in foreign currency to be one thousand pesos or its equivalent.

complicated things further Dollar has no checking account, nor can they be transferred by the bank, only leaving the option of crediting the outstanding amount on the invoice to the savings account of the supplier, a mechanism authorized by the anti-theft law. But in this case, tax has to be paid on debit and credit.

Changes in the price of individual dollars significantly changes the cost and creates that there are winners and losers.

Changes in the price of individual dollars significantly changes the cost and creates winners and losers.

devaluation in 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 at a later date, the total exchange difference as per AFIP rule (03/31) generates a new financial debit to be made will be paid by the taxpayer. The final price of the invoice should be compared with the total amount paid, VAT is calculated on the difference. Similarly, this amount integrates the gross income tax base determined for each jurisdiction.

In property tax Payments by individuals, assets expressed in dollars as on December 31 or the end of the fiscal year, should be converted into the quoted value of the foreign currency on that date. For example, if a person has dollars in a safe deposit box or “mattress” at the time of payment for personal property, they must calculate them at the quoted value of the bill at the end of the year.

In terms of income taxThose that result from the purchase and sale of foreign currency in the official exchange market are exempt from income tax.

He doesn’t even have a record. profit arising from the price difference of holdings in dollars or eurosgenerated at the end of the year. On the other hand, companies must include the result of dollar sales at the end of the fiscal year and higher values ​​resulting from their ordinary possession, which is taken as the basis for computing income tax.

It is important to remember that any operation that is done using foreign currency must be justified in order to obtain a commodity or contract a service. justification in tax return. For example, before the purchase of assets in dollars, foreign currency should appear in the affidavits filed with AFIP. Similarly, all banknote movements recorded in tax returns must be backed by official exchange market settlements.

All of the above shows that both inflation and devaluations, to the extent that they are not recognized, harm all taxpayers and benefit only the state.

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