On October 9, 2026, Argentina published Law No. 27,826, known as the Tax Innocence Law II, introducing further amendments to the country’s tax legislation. The Law modifies the Tax Innocence Law (Law No. 27,799) and the Tax Procedural Law (Law No. 11,683), building on reforms adopted in January 2026. It clarifies what constitutes a significant tax discrepancy and reduces penalties for formal compliance violations committed by micro, small, and medium-sized enterprises (MSMEs).
Key New Measures
The amended Tax Procedural Law reduces the statute of limitations for tax assessments, collection, and penalties from five years to three years for compliant registered taxpayers. To qualify, taxpayers must file their returns on time and pay the tax due by the applicable deadline. The implementing decree also treats taxpayers who enter into an installment plan before the payment deadline as having settled their liability.
However, the shorter limitation period does not apply where the tax authorities identify a significant discrepancy between the taxable person's declarations and information available in their own systems or obtained from third parties. The standard five-year period also remains applicable in cases involving improperly claimed, credited, refunded, or transferred tax amounts, including VAT refunds on exports. Unregistered taxable persons remain subject to the existing 10-year limitation period.
The January 2026 tax reform established specific criteria for determining when a tax discrepancy is considered “significant,” which is particularly important because such discrepancies can prevent taxable persons from benefiting from the reduced three-year statute of limitations. The recent amendments revise this definition by changing how the 15% threshold is calculated. Instead of comparing the adjustment with the originally reported tax balances, the threshold is measured against the tax assessed.
The Law also introduces measures to reduce the financial burden of formal tax penalties for smaller taxable persons and other eligible entities. It provides an automatic 25% reduction in certain formal penalties imposed on qualifying micro, small, and medium-sized enterprises (MSMEs). The same reduction is available to individuals, undivided estates, and non-profit organizations that are not classified as Large Taxpayers.
In addition, the Law establishes a transitional 50% reduction in qualifying formal penalties relating to tax obligations that became due after Law No. 27,799 entered into force.
Conclusion
For multinational groups operating in Argentina, the reform may significantly shorten the period during which the tax authorities can review and challenge tax returns, giving greater certainty over historical tax positions and reducing long-term exposure. However, the shorter period is conditional rather than automatic, so groups should confirm that their filing and payment records meet the qualifying criteria.
