Friday, December 3

For RG 4003 beneficiaries, is Earnings still an annual tribute?


1) Add a Special Deduction (DEI) equal to the difference between net income and personal deductions so that the taxable amount is zero. And at the end of the year.

2) Verify if the RBM of the 2nd semester of 2021 on average meets the same condition, if so, the 2nd installment of the SAC will also be exempt.

For those in group B each month, select the lowest value between the RBM for that period and the average for that month, the DEI from the table in ANNEX IV of RG 5008 (now replaced by the ANNEX of RG 5076), and reducing well retention

It should be clarified that the DEI that are applied in each month must be maintained for the following months in the cumulative calculation of the tax, even if the monthly income grows above $ 203,000.

There could be cases in which the same person generates DEI according to group A and then, as a result of the salary increases, move to group B, also others in which the reverse path must be followed due to receiving variable remunerations that are reduced.

1 | Double calculation

Attentive to the above, this implies that except in the case that every month exceeds $ 203,000 we must perform a double calculation:

1) A monthly validation from which it arises whether or not withholding will be suffered for that month, (for an RBM according to group A, B or C), if A, a DEI must be generated that cancels the taxable amount exclusively for the income of that month, and therefore using the January tax and personal deductions tables.

2) An accumulated one, after doing the process of the previous point in which all the previous operations would be exposed, if at any time the RBM (for the month or on average) exceeds $ 203,000, this implies that there will no longer be new DEI but they maintain those of each of the previous months.

At the end of the year, it remains to validate the average RBM for the 2nd semester to verify whether or not they exceed $ 175,000 and leave or not exempt the 2nd installment of the bonus, and also determine if the productivity awards would enjoy an exemption of up to 40% of the minimum Not Taxable, as long as the average RBM does not exceed $ 300,000.

2 | Tax period violated

Beyond the effect on the bonus and on an eventual productivity bonus, it turns out that for the beneficiaries who had months with RBM within groups A or B, the annual tax would be the sum of monthly calculations and this violates what is established by the Income Tax Law regarding the concept of annual fiscal period (the fiscal year begins on January 1 and ends on December 31), the most serious thing is the evident distortion that occurs in the results that is evidenced by comparing the cases of an XX beneficiary versus another YY in both cases they are active workers over 18 years of age without union contributions, or deductions of any kind and without family charges and with the same gross annual income, but received differently since XX always received RBM from group C, but YY until June was collected RBM from group A, July and August their income was from B, and from September to the end of the year their RBM exceeded the parameter of C, of ​​the comparison It appears that the tax determined for XX is radically higher than YY despite the fact that both receive the same gross annual income.

What has been explained above violates the constitutional guarantee of equality before the law, and the principle of equity that should govern in tax matters; In addition, the degree of complexity of the retentive surgery causes:

Great difficulty in implementing remuneration systems and controlling results

The intention of explaining to the worker the operation of the retentive system makes it naive, igniting complaints to employers and a bad work environment.

3 | Simplification suggestion

For all that has been said and with the greatest humility, I suggest that the authorities simplify the calculation of payments on account, applying a table that -for an example- for an RBM greater than $ 175,000 implies a 5% withholding, and for each $ 25,000 increase in the RBM, increase the tax rate by 3%, so whoever receives $ 299,000, would correspond 17%, logically the maximum rate would be 35%, at the end of the calendar year, the withholding agent would simply determine Based on the average RBM if the beneficiary exceeds $ 175,000 or, if applicable, $ 203,000, and if applicable, it would adjust the withholding by reimbursing the surplus or withholding the missing tax.



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