Reduction of Corporate Income Tax Advance Payments for SMEs

Corporate income tax advance payments may be reduced when a company reasonably estimates that its advance payments will exceed the tax ultimately due for the fiscal year. In Argentina, corporations may generally request a reduction from the fifth advance payment onward, or earlier if certain thresholds are met. The purpose is to avoid unnecessarily tying up working capital.

Reducción de anticipos de Ganancias para PyMEs

Why Does Reducing Corporate Income Tax Advance Payments Matter?

For a small or medium-sized enterprise (SME), paying taxes in advance based on past profitability can create a liquidity problem when revenue declines, profit margins shrink, or costs increase.

Corporate income tax advance payments are generally calculated based on the tax assessed for the previous fiscal year, subject to the adjustments established by applicable regulations. However, your company’s business performance may not follow the same pattern from one year to the next.

If profitability declines, your company may end up paying more in advance than it will ultimately owe. Although these amounts can be credited against the final tax liability, having funds tied up affects your ability to pay suppliers, maintain working capital, or finance investments.

The key is to review your projections before the payment deadline and determine whether you should request a reduction supported by verifiable financial data.

What You Need to Know in 30 Seconds

  1. You can request a reduction: If you project that your advance payments will exceed the corporate income tax ultimately due for the fiscal year.

     

  2. The fifth advance payment is the general rule: The option may be exercised from the first or third advance payment if the applicable thresholds are met.

     

  3. The thresholds for an earlier request are specific: Starting with the first advance payment, when total projected advance payments exceed the estimated tax by more than 40%; starting with the third, when they exceed it by more than 25%.

     

  4. ARCA requires tax compliance: Requirements include an active Tax Identification Number (CUIT), an established Electronic Tax Domicile, and the filing of required tax returns, among other conditions.

     

  5. The estimate has consequences: If you underestimate the tax ultimately due, your company may be liable for compensatory interest.

Who Can Request a Reduction in Corporate Income Tax Advance Payments, and When?

Corporations subject to Corporate Income Tax may consider this option when their projections indicate that advance payments calculated under the general rules will exceed the final tax liability for the fiscal year.

In an article published by iProfesional on October 6, 2026, titled “Corporate Income Tax: Who Can Request a Reduction in Advance Payments Starting With the October Due Date,” journalist Dolores Olveira discusses the applicable criteria and includes explanations from Carlos Fernández, Tax Director at Fidem Partners.

According to Fernández, the rules provide for three possibilities:

  • Starting with the first advance payment: When the estimated total of advance payments exceeds the projected tax liability by more than 40%.
  • Starting with the third advance payment: When the projected difference exceeds 25%.
  • Starting with the fifth advance payment: As the general rule, for cases that do not meet the conditions described above.

For companies whose fiscal year ends in December, the article states that the fifth advance payment for 2026 was due between October 13 and October 15, depending on the last digit of the company’s CUIT.

What to do: Review the payment schedule applicable to your company and determine whether any future advance payments may still qualify for a reduction request.

What Requirements Does ARCA Impose for Reducing Advance Payments?

It is not enough to believe that your company will earn less. The request must satisfy the applicable administrative requirements and be supported by a consistent tax projection.

The requirements identified by Fernández in the iProfesional article include:

  • Having a CUIT with active administrative status and no restrictions.
  • Having an established Electronic Tax Domicile.
  • Not having submitted another request to reduce advance payments for the same tax and fiscal period within the preceding 90 calendar days.
  • Having no outstanding income tax returns, whether tax-determining or informational, whose filing deadlines fell on or after January 1 of the year preceding the request.

ARCA may also assess the taxpayer’s tax risk profile, the extent of the requested reduction, and the taxpayer’s history of previous requests. It may require additional documentation to evaluate the projection.

What to do: Before starting the procedure, reconcile your accounting and tax records and verify that no outstanding filing obligations remain.

How Do You Request a Reduction in Corporate Income Tax Advance Payments?

The procedure is completed through ARCA’s Tax Accounts (Cuentas Tributarias) online service. The company must identify the relevant tax and fiscal period and report the projected tax assessment base.

To prepare a well-supported request, it is advisable to work through the following elements:

  1. Projected financial results: Estimate revenue, costs, expenses, and the expected taxable result through the end of the fiscal year.
  2. Estimated tax liability: Calculate the expected annual tax obligation, taking into account the applicable tax adjustments.
  3. Advance payments and tax credits: Review amounts already paid and eligible credits, including applicable tax withholdings and collections.
  4. Reasons for the change: Document the factors explaining the difference from the previous fiscal year, such as declining sales, lower profit margins, or extraordinary income that will not recur.

ARCA may request supporting information through the Electronic Tax Domicile. For this reason, you should not submit an improvised projection or base the request solely on a decline in revenue.

What to do: Prepare a documented tax projection and have your accountant review it before submitting the request.

What Happens If ARCA Approves the Request?

If the option is properly exercised, the reduction applies to the advance payments for the relevant fiscal period that have not yet fallen due when the option is exercised, subject to the applicable conditions.

The reduced amount must be paid using an Electronic Payment Slip (VEP) by the applicable due date. The procedure does not eliminate the annual tax liability; it changes the amount paid in advance during the fiscal year.

It is also important to understand what happens if the estimate is too low. If the final tax liability exceeds the projected amount and the applicable interest rules are triggered, ARCA may claim the corresponding compensatory interest.

In other words, reducing advance payments can improve liquidity, but it should not be used to defer tax obligations without adequate supporting evidence.

What to do: Retain your calculations and supporting documentation, and update your projections if your company’s performance changes significantly.

Why Should You Evaluate This From a Financial Management Perspective?

Reducing advance payments is not merely a tax matter. It is also a working capital management decision.

Carlos Fernández notes in the iProfesional article that avoiding excess advance payments allows companies to keep funds available for operations. This is relevant because tax credit balances may take time to use and do not necessarily retain their economic value in an inflationary environment.

Consider an SME that expected a profitable fiscal year but loses a major customer during the year and begins operating with tighter margins. If it continues paying advance taxes calculated based on a stronger previous period, it may tie up funds needed to pay suppliers or maintain business activity.

To assess whether a reduction makes sense, consider:

  • How much the immediate tax outflow would decrease.
  • The company’s short-term financial obligations.
  • The reasonably projected annual tax liability.
  • The tax risks if the estimate differs from the final result.

What to do: Include the review of advance payments in your financial and tax budget rather than waiting until each payment deadline.


Journalistic source: Dolores Olveira, iProfesional, “Corporate Income Tax: Who Can Request a Reduction in Advance Payments Starting With the October Due Date,” published October 6, 2026.

The article includes statements by Carlos Fernández, Tax Director at Fidem Partners.

Editorial note: This content is for informational purposes only and does not replace an assessment of each taxpayer’s specific circumstances. Requirements and procedures should be verified against the regulations in force and the company’s individual tax position.

Frequently Asked Questions About Reducing Corporate Income Tax Advance Payments

Can a Corporation Reduce Its Corporate Income Tax Advance Payments in 2026?

Yes. Corporations may request a reduction when they estimate that their advance payments will exceed the final tax liability for the fiscal year and they meet the applicable requirements. The point at which the request may be submitted depends on the current advance payment and the thresholds established by the regulations. Before filing, the company should review its tax projections, outstanding filing obligations, and the relevant payment deadlines.

Starting With Which Advance Payment Can a Reduction Be Requested?

As a general rule, a reduction may be requested starting with the fifth advance payment. However, the request may be submitted earlier, starting with the first advance payment when projected advance payments exceed the estimated tax by more than 40%, or starting with the third advance payment when the difference exceeds 25%. The company must verify that it meets the applicable thresholds and document the estimate used.

How Do You Request a Reduction in Advance Payments Through ARCA?

The procedure is handled through ARCA’s Tax Accounts service. The taxpayer must identify the tax and fiscal period and report the projected assessment base. The agency may evaluate the taxpayer’s tax profile and request additional documentation. Therefore, it is advisable to prepare a projection of the expected taxable result in advance and retain the supporting information explaining the difference from the advance payments calculated under the general rules.

What Happens If ARCA Approves a Reduction and the Company Subsequently Earns More Than Expected?

If the final tax liability exceeds the estimate used to reduce the advance payments, differences may become subject to compensatory interest under the applicable rules. A reduction does not constitute an exemption from Corporate Income Tax or a waiver of the tax liability. To limit the risk, the company should use reasonable assumptions, document its calculations, and update its projections when business conditions change.

Does Reducing Advance Payments Generate Tax Savings?

Not necessarily. A reduction changes the payments the company makes during the fiscal year, but it does not, by itself, reduce the final annual tax liability. Its main benefit is financial: avoiding advance payments that could otherwise remain tied up as tax credit balances. The potential savings come from retaining liquidity to operate the business, pay obligations, or finance productive activities.

What Documentation Should Be Prepared Before Requesting a Reduction?

It is advisable to gather up-to-date accounting information, projected revenue and costs, the estimated taxable result, eligible tax withholdings and collections, and a breakdown of advance payments already made. It is also important to explain the changes compared with the previous fiscal year and verify compliance with filing obligations. The exact documentation required will depend on the company’s circumstances and any additional information requested by ARCA.

If your company has experienced declining profitability or projects a lower tax liability than in the previous fiscal year, it may be appropriate to review outstanding Corporate Income Tax advance payments. At Fidem Partners, we can help you assess your tax projections, analyze the impact on cash flow, and determine whether a reduction request is justified.

Contact us to review your company's situation and determine the next steps.

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