AFIP "investigating" foreigner porperty owners?

[nikad]

the government is trying to squeeze money out of anything, because there are no investments, there is recession and they spent too much for the elections Watch your pockets, we are all possible victims no matter what.

 

[rmartinbuenosaires]

Steveinbsas

Thanks so much for your concern for my health which is just fine.

I am not angry, I simply call a spade a spade. If you cannot see how corrupt and money hungry this government is, then "ignorance is bliss" as they say. Enjoy your weekend.

 

[jimdepalermo]

According to my accountant, the tax rate on rental income rates for non-residents is three time greater than the rate for residents.

I think there may be confusion between taxes on personal goods ("Bienes Personales") and Income ("Ganancias"). The rate for Bienes owned by foreigners is 3 times the rate for locals. I believe the income tax rates are the same for everyone and haven't changed in many years.

 

[jimdepalermo]

In discussions with my accountant, I have a slightly different reading on the current research into real estate transactions.

Historically, real estate transactions have been used to hide assets from both income and personal goods taxes. The recent changes in registration of real estate transactions have improved transparency, so now AFIP is looking into the source of funds, primarily to collect back taxes from residents on the basis that the funds had to come from somewhere, so they either should have been declared as Personal Goods ("Bienes Personales") or Income ("Ganancias").

This primary affects residents. Foreigners who bought a piece of real estate are liable only for the Personal Goods taxes on the value of the real estate, and for any income they realize from renting it.

 

[steveinbsas]

I think there may be confusion between taxes on personal goods ("Bienes Personales") and Income ("Ganancias"). The rate for Bienes owned by foreigners is 3 times the rate for locals. I believe the income tax rates are the same for everyone and haven't changed in many years.

Well, as far as the Bienes Personales are concerned I am still a foreigner, but with a DNI I pay the resident rate. I believe the current rates are .50% for residents and 1.25% for non residents. Residents have an exemption of 305K, but I don't think it applies to non-residents (foreigners). Income tax rates may be the same for everyone for income earned in Argentina, but it is necessary to have residency to work here legally.

Something might have been lost in the translation, but I think my accountant may have told me that AFIP assumes rents of 30% of the stated value of the property for non residents who do not actually live in the apartments they are selling versus 10% for residents who are selling an apartment that they do not use as a primary residence. I hope he wasn't referring to a tax rate of 30% of the selling price of the apartment. I do know that foreigners who do not have a DNI have to provide a helluva lot more documentation to AFIP (and wait several months as opposed to several days for approval) when they sell than those who do.

I do recall posts on other sites by horrified foreign sellers that were charged a 30% money laundering penalty when they couldn't demonstrate that the funds they used to purchase property were brought into the country en blanco, but I don't know if that was on the total amount transferred or just the overage.

 

[steveinbsas]

In discussions with my accountant, I have a slightly different reading on the current research into real estate transactions.

Historically, real estate transactions have been used to hide assets from both income and personal goods taxes. The recent changes in registration of real estate transactions have improved transparency, so now AFIP is looking into the source of funds, primarily to collect back taxes from residents on the basis that the funds had to come from somewhere, so they either should have been declared as Personal Goods ("Bienes Personales") or Income ("Ganancias").

This primary affects residents. Foreigners who bought a piece of real estate are liable only for the Personal Goods taxes on the value of the real estate, and for any income they realize from renting it.

AFIP is undoubtedly aware that non-resident property owners are renting their apartments and not paying taxes. It certainly is a major issue when a foreigner without residency seeks the necessary permission from AFIP to sell. As I previously posted, if the utility bills don't drop to near zero levels when these owners are abroad, AFIP will assume they have been renting their apartments and assess taxes and penalties (absent other documentation).

Perhaps AFIP isn't as willing to play the waiting game as in the past.

Foreigners were and still are subject to the laws regarding transfer of funds into the country. Transfers in excess of the amount on the escritura are subject to additional regulation as well as fines if the rules aren't observed. It appears that AFIP is now investigating past transfers made by non-residents when buying properties.

Is anyone really surprised that AFIP is looking at foreigners as a source of additional income? Considering migraciones raised fees and penalty rates 3 to 6 times the rates that were in effect earlier this year, AFIP has a lot of catching up to do...and AFIP is a far more "serious" branch of government than migraciones.

I'm sure that some foreigners who "bent" the law when they bought their apartments or have failed to report rental income and pay the appropriate taxes are hoping jimdepalermo is right, but I fear they may have serious cause for concern.

 

[Fettucini]

Hi Steve, I just have a question that maybe you know about in regards to Bienes Personales.
Let's say a foreigner buys a property in 2007 for AR$300,000, then a year later in 2008 gets their DNI residency, then another year later in 2009 sells the property, will they be charged any Bienes Personales? I was interested whether the AFIP would look into how long you've been a resident as to know how much time they would charge you Bienes Personales. Or would they just assume you've always been a resident and therefore not charge any Bienes Personales tax?

 

[soulskier]

Hi Steve, I just have a question that maybe you know about in regards to Bienes Personales.
Let's say a foreigner buys a property in 2007 for AR$300,000, then a year later in 2008 gets their DNI residency, then another year later in 2009 sells the property, will they be charged any Bienes Personales? I was interested whether the AFIP would look into how long you've been a resident as to know how much time they would charge you Bienes Personales. Or would they just assume you've always been a resident and therefore not charge any Bienes Personales tax?

I think it depends what direction the wind is blowing.

 

[Fettucini]

yeah would be interesting to know though

 

[steveinbsas]

Hi Steve, I just have a question that maybe you know about in regards to Bienes Personales.
Let's say a foreigner buys a property in 2007 for AR$300,000, then a year later in 2008 gets their DNI residency, then another year later in 2009 sells the property, will they be charged any Bienes Personales? I was interested whether the AFIP would look into how long you've been a resident as to know how much time they would charge you Bienes Personales. Or would they just assume you've always been a resident and therefore not charge any Bienes Personales tax?

I'm not certain that if AFIP would expect you to pay an a non-resident for for 2007, but my guess would be yes. In either case, you will also be assessed a penalty of 30-40%. You are required to file the tax returns for all of the years you owned the property whether or not you have you have a DNI or a tax liability. If you are living in Argentina more than six months a year, your "worldwide" assets over 305K are subject to the tax, but they really can't know what you own elsewhere.

Yes, they will know when you received your DNI as the date is on the document and they will look. As a resident, your worldwide income is also subject to taxation.

Selling opens up a big can of worms, but it looks like AFIP is now engaged in a worm hunt, whether you are selling or not. If you have a DNI and the amount you paid and are selling for is less than 305K, it will go a lot smoother. A good accountant is necessary. I can recommend one. Beware of those who speak English or charge more than $400 pesos for each tax year you need to file.