AFIP will control your expenses in May: from what amounts should your bank report

[carride]

Hi Alby,

An insightful post. I'm curious, did your taxation lawyer have any comments about expats taking advantage of the recent "blanqueo de capitales" offer? It seems to apply to Argentines that moved tax residence and are being coaxed back to Argentina through this scheme. I'd be curious if any expats are taking advantage to declare anything.

I am interested to know as well. This is what I received from the bank newsletter

Desde el 1/01/2024 hasta el 31/12/2025:
Se pueden recibir transferencias desde otras Cuentas Especiales de Regularización de Activos y Cuentas Corrientes Especiales de Regularización de Activos

En el caso de que se blanqueen fondos por un monto de hasta dólares estadounidenses cien mil (USD100.000) no aplicará la retención del cinco por ciento (5%).

Los fondos podrán ser utilizados para:
-Afectación a los destinos mencionados en los puntos 1 a 4: sin retención del 5% de Impuesto Especial de Regularización.
-Transferencias a otras cuentas de misma titularidad o desafectación: con retención del 5% del Impuesto Especial de Regularización (de corresponder)

Hasta el 30/09/2024:
Se pueden utilizar los fondos únicamente para los siguientes destinos, mediante transferencia:

1. El pago del impuesto especial de regularización y/o su pago adelantado (mediante VEP generado por la página de AFIP)
2. Los instrumentos financieros y/o inversiones que establezca el Ministerio de Economía.
3. Transferencias a cuentas especiales de terceros.
4. Operaciones onerosas debidamente documentadas por un monto de hasta DÓLARES ESTADOUNIDENSES CIEN MIL (USD 100.000) (se deberá presentar una DDJJ)

También se pueden recibir acreditaciones desde cuentas especiales de terceros.

No se permite ningún otro tipo de movimiento distinto de los detallados precedentemente.

Si cualquiera de estas operaciones se tuvieran que realizar en pesos, se puede utilizar cualquier medio legal para realizar la conversión (MULC, CCL, etc.)

 

[LuckyLuke]

I am interested to know as well. This is what I received from the bank newsletter

Interesting...it seems the scheme is not so much just "declaring" what you have abroad but also depositing it in Argentina to invest in their limited options. A gimmick to obviously shore up dollar reserves.

"In the case of cash, it must be deposited in a Special Asset Regularization Account , and as long as it remains there, it will not pay tax. However, funds that are not transferred to these accounts will be taxed."

I can only see this being advantageous to expats who want to declare dollars to purchase a property, if the government allows such a use.

It would have also been interesting to declare up to $100,000 in personal property abroad to avoid any wealth tax, but it seems all they are offering for that is a temporary discount:

"The AFIP resolution that was announced on Wednesday also regulated the possibility of advancing the payment of Personal Property Tax from 2023 to 2027 with a rate of 0.45% per year."

For a country so focused on the USA for currency and troubled by obvious dollar laundering, it's really disappointing that there is no tax treaty in place to regulate any of this. Instead we get the typical narco-mafia treatment for the crime of owning dollars.

 

[redlobster]

...I would suggest entering into the blanqueo available over these next few months that offers legal immunity ...

By entering into the blanqueo program, you are essentially admitting that you have been a long-term tax evader. This is a pardon, after all. Even if AFIP forgives you, this may have other interesting consequences. For instance, if you decide to run for public office elsewhere or get a job in banking, for example, this issue could eventually be raised.

Is the privilege of bringing a few hard-earned dollars into your Argentinian account worth it? I don't know.

 

[antipodean]

Interesting...it seems the scheme is not so much just "declaring" what you have abroad but also depositing it in Argentina to invest in their limited options. A gimmick to obviously shore up dollar reserves.

"In the case of cash, it must be deposited in a Special Asset Regularization Account , and as long as it remains there, it will not pay tax. However, funds that are not transferred to these accounts will be taxed."

I can only see this being advantageous to expats who want to declare dollars to purchase a property, if the government allows such a use.

It would have also been interesting to declare up to $100,000 in personal property abroad to avoid any wealth tax, but it seems all they are offering for that is a temporary discount:

"The AFIP resolution that was announced on Wednesday also regulated the possibility of advancing the payment of Personal Property Tax from 2023 to 2027 with a rate of 0.45% per year."

For a country so focused on the USA for currency and troubled by obvious dollar laundering, it's really disappointing that there is no tax treaty in place to regulate any of this. Instead we get the typical narco-mafia treatment for the crime of owning dollars.

Not quite, depositing money in a special account just avoids/ minimises the penalties due. Only physical cash needs to be deposited in order to be declared. Anything else, you decide what to do with it and where to keep it.

The penalty due depends on:
- When you enrol
- How much you declare
- What you do with the amount declared

The penalties due under this blanqueo will be evaluated, taxed and paid in dollars.

Adherence to the blanqueo, also means you can elect to pre-pay your wealth tax and are in return guaranteed a reduced bienes personales rate until 2038 - regardless on how much the value of your declared assets actually appreciates and regardless of how much any subsequent government wants to tax assets during this time.

Here is an explainer video:

By entering into the blanqueo program, you are essentially admitting that you have been a long-term tax evader. This is a pardon, after all. Even if AFIP forgives you, this may have other interesting consequences. For instance, if you decide to run for public office elsewhere or get a job in banking, for example, this issue could eventually be raised.

Is the privilege of bringing a few hard-earned dollars into your Argentinian account worth it? I don't know.

Participants also have a guarantee of full legal protection from all civil claims that may arise from their tax, exchange, customs and administrative crimes absolved by participating in this scheme. By participating there is no criminal record or liability incurred, no public record, and no impact on public office or job-seeking (at least where it counts, in Argentina).

If an Argentine resident ever actually wants to do anything with that money and plans to stay in Argentina for a long time (rather than just pay buy a few pesos at a cueva to buy their dinners and rent for the rest of their lives...) then it is 100% worth it to be able to live a normal and integrated life.

 

[redlobster]

Participants also have a guarantee of full legal protection from all civil claims that may arise from their tax, exchange, customs and administrative crimes absolved by participating in this scheme. By participating there is no criminal record or liability incurred, no public record, and no impact on public office or job-seeking (at least where it counts, in Argentina).

You guys are projecting your own insecurities and trying to convince people that this is the way to go.

If you are a professional money launderer, this blanqueo deal may be a lifetime opportunity.

If you are a normal person, this "full legal protection from everything" doesn't mean much. It is not like a full-blown witness protection program. Sealed from public records doesn't mean that, for example, a judge who is supposed to grant you citizenship won't know about it. If you maintained legal means of living while you stayed in Argentina, how come you needed a pardon?

I am only saying that the person should decide for himself what to do. I think this permanent pushing of some amnesty program is a bit too much.

 

[Alby]

Hi Alby,

An insightful post. I'm curious, did your taxation lawyer have any comments about expats taking advantage of the recent "blanqueo de capitales" offer? It seems to apply to Argentines that moved tax residence and are being coaxed back to Argentina through this scheme. I'd be curious if any expats are taking advantage to declare anything.

We didn't get into this matter in more than a cursory way as it's not relevant to my particular case.

As has been said many times on this board, each individual with significant income and assets in play needs to get their own advice from an accountant or lawyer (or both) before they consider putting themselves in harm's/AFIP's way. Although Steve prefers to get his advice directly from AFIP and that seems to have worked for him over time (and he is fine in any case because his income and assets fall well below the thresholds), talking directly to AFIP (even in a provincial town a long way from CABA) quoting posts from this board chapter and verse on behalf of a whole class of expats and alerting AFIP to the specifics of the current laws and how they affect that particular group is probably doing nobody in that group any favors.

 

[antipodean]

You guys are projecting your own insecurities and trying to convince people that this is the way to go.

If you are a professional money launderer, this blanqueo deal may be a lifetime opportunity.

If you are a normal person, this "full legal protection from everything" doesn't mean much. It is not like a full-blown witness protection program. Sealed from public records doesn't mean that, for example, a judge who is supposed to grant you citizenship won't know about it.

I am only saying that the person should decide for himself what to do. I think this permanent pushing of some amnesty program is a bit too much.

100% agree each person should decide for themselves, and most importantly seek professional advice from an accountant not a forum of foreigners with a superficial (if that..) understanding of Argentine taxation, laws and language. For those with a genuine interest in the subject, it starts with understanding the basic facts to think about if it could work for them or not.

Throwing out half-baked conspiracy theories, urban legends and scaremongering to encourage tax evasion (and presumably making oneself feel justified in partaking in it...) really doesn't add any value whatsoever. You will probably be aware that there were massive blanqueos under Alfonsin, Menem, Nestor, Cristina and Macri over the past decades, so surely you have some documented examples of how "normal people" participating in them have had citizenship applications denied by judges, ran out of public office and fired from banks for their participation in these blanqueos over this time?

 

[redlobster]

100% agree each person should decide for themselves, and most importantly seek professional advice from an accountant not a forum of foreigners with a superficial (if that..) understanding of Argentine taxation, laws and language.

I think trying to convince a person who receives his pension through Western Union that he needs a lawyer and an accountant to oversee his extensive financial activity, otherwise the government will come after him, is a half-baked conspiracy theory.

... and scaremongering to encourage tax evasion (and presumably making oneself feel justified in partaking in it...)

You are turning it upside down. I am saying that unless you've been involved in tax evasion, you probably don't need to participate in the blanqueo.

You will probably be aware that there were massive blanqueos under Alfonsin, Menem, Nestor, Cristina and Macri over the past decades, so surely you have some documented examples of how "normal people" participating in them have had ...

I suggest you talk to any former participants and find out whether they are happy with their decision now. The answers may surprise you.

 

[antipodean]

For those that plan on being in Argentina in the long run and want to get their local tax affairs in order, I would suggest entering into the blanqueo available over these next few months that offers legal immunity not only for income and wealth tax evasion, but also capital control infractions. For residents who own, or plan to own, property or assets here it also offers some very attractive discounts on wealth tax for the next 5 years.

I think trying to convince a person who receives his pension through Western Union that he needs a lawyer and an accountant to oversee his extensive financial activity, otherwise the government will come after him, is a half-baked conspiracy theory.

Who is trying to convince a pension who receives his pension through Western Union?

 

[elhombresinnombre]

Personally, I think it's probably unlikely they will ever connect those dots. Unless you are liquidating a huge amount of money per month I think AFIP has bigger fish to try. Tax evasion down here is practically an Olympic sport second only to Futbol. AFIP's largest problem is probably businesses over reporting their import expenses to reduce their income tax (sobrefacturación de importaciones) or overreporting their export revenue (sobrefacturación de exportaciones) to launder pesos into dollars.

Do you think they don't have all the dots or that they have them and currently only use them in a targeted and selective way? I think it's the latter and masses of data is shared with all manner of entities even if most of the time it's not used. Next time you experience a data based screwup in a bank, a shop, a utility or city or government service, ask yourself if this muddle, this complication has come about because they have too little information about you or too much?