27 August 2009

Careful About Buying From Monotributistas Part II

I received a follow-up question from my post the other day about the new retention scheme for monotributistas.

Reader's Question
Do you know if this change will affect English teachers who submit facturas to institutes or their clients at the end of each month?

Effect on Service Providers
An English teacher, as a service provider who invoices their client at the end of the month, is going to be subject to the new retention regime. Now, if the client is a consumer (i.e. an individual student), there will be no retention, since consumers are not required to control the tax situation of monotributistas. As consumers in Argentina the only obligation we have is to demand that all service providers provide us with an invoice with all purchases.

Assuming you are working for an institute, however, the situation is somewhat different. The institute will now need to control your invoices to ensure that you are not exceeding the monotributo limits. So, if you are enrolled in category A (which corresponds to $12,000 pesos per year), once you've issued invoices for $12,000 pesos to that institute, you will begin to see retentions of income tax and VAT unless you pass to a higher category (B, for example).

If you are invoicing the same institute each month and you don't have any clients on your own, you're probably not supposed to be in monotributo anyway. You should be enrolled as an employee of the institute and then you can avoid all this mess.

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