Argentina's New Tax On Residents Global Wealth

[Steve K]

What's the longest you can live there continuously without being taxed on your wealth and income?

People will be reluctant to say this, but there are a few different answers.
1) What the rule of law/regulation says - I believe this is 180 days, and some visas (student) may be exempt.
2) What practically happens - some time after a full year plus, depending on when you arrived and when you get your DNI, CUIT/CUIL, CDI (process can take a year or more) and when annual taxes are due, and what you ended up disclosing in the visa process or the banking process or employment process or otherwise.
3) Never, based on your approach to "risk taking."

Since you (Sequoia1321) are a lawyer, the concept of the rule of law not really applying to anything is going to be quite alien. As some tried to explain to you in another thread, there are laws and regulations in Argentina about EVERYTHING, and pretty much every activity of human life is illegal or regulated to a high degree. The reality is that MOST laws/regulations are largely ignored by everyone, so it becomes sort of a true democracy - what is acceptable behavior (or not) is determined by a majority of the people and the way they choose to live, regardless of what laws or regulations say. Most locals and expats pay SOME level of tax, depending on what they allow the government and others to know about them. Lots of locals and expats pay nothing at all. As for getting caught and penalties, nothing in Argentina is solid. Deadlines are soft, enforcement is lax, penalties are fluid, and there is always an "unofficial" way to get almost anything official done, and most everyone accepts that as normal.

I have seen something similar only once in the USA. Nevada passed a non-smoking ordinance almost identical to California's. No smoking in ANY public building, including bars and restaurants. This was a huge deal in Nevada, where smoking is almost mandatory. In Las Vegas, the locals adapted this way - in any bar (whether serving food or not), if you sit at the bar, smoking happens. If you sit anywhere else, no smoking. So while smoking is technically illegal, even when sitting at the bar, the locals determined that that is how it would be, and that is the way it is. But go to a bar in Reno or elsewhere, no smoking inside the building. Period.

There are a few expats around that are very straight arrows, and they work hard to comply with everything the Argentine government demands, much as they did in their home countries. This is a difficult task, and I admire them for their character and commitment. I don't believe there are many Argentines that would choose to live like that.

Since I don't live there (yet), I have not made any choices. Other than driving. Argentines drive the way I would if I could get away with it.

 

[jblaze5779]

Other than driving. Argentines drive the way I would if I could get away with it.

On the highway it's either 200kph or 60kph. Bad thing is there's only one lane.

 

[Somewhereinba]

While the post-pandemic future is uncertain for most countries, the outlook for Argentina, which placed 139th out of 141 countries in a ranking of economic stability compiled by the World Economic Forum, is among the most precarious.

 

[jeff1234]

While the post-pandemic future is uncertain for most countries, the outlook for Argentina, which placed 139th out of 141 countries in a ranking of economic stability compiled by the World Economic Forum, is among the most precarious.

Further to your point, Bloomberg News today:
Companies Flee Argentina and Coronavirus Is Just One Reason
July 27, 2020, 7:00 AM
Argentina faces a mounting exodus of multinationals that have concluded that doing business in Latin America’s third-largest economy is just too complicated and unprofitable, even disregarding the coronavirus pandemic.
Powerful labor unions, volatile politics, price and currency controls, and other forms of state interventionism have long been features of doing business in the crisis-prone South American country. Now, faced with a third straight year of recession and a new antibusiness government, some foreign companies, from airlines to autoparts makers, are pulling up stakes.

 

[FallenAngel]

The flaw in the argument that in 15 years AFIP won't care about old cases is that assets are held over time. You could go 15 years holding an overseas assets undectected, then get caught; at that point they are not chasing a 15-year old case, but instead a current case with a 15 year history of failure to declare

Still, it is useful to hear from someone who has experience with AFIP on this question. Do you have more details of the two experiences you mention, for example, how far in the past they occured?

The examples I gave were from a couple years ago. Regarding your concern, yes that is true. I guess it depends on how attached to Argentina you are. If I ever get contacted by AFIP, then I will leave the country. If AFIP ever starts being more efficient and going over past cases and not giving a statute of limitations, then I will leave. I do not hold assets in Argentina for that reason.

If you very dedicated to staying in Argentina no matter the situation, then it makes more sense to pay any tax they throw at you and play things by the book.

 

[Irelander]

If you very dedicated to staying in Argentina no matter the situation, then it makes more sense to pay any tax they throw at you and play things by the book.

I agree absolutely. Handling your affairs over the long term while having to spin a web of deceit is a mug's game. Having a lot of secrets exposes you to acts of corruption by others. It' not worth it.

 

[Alpinista]

I agree absolutely. Handling your affairs over the long term while having to spin a web of deceit is a mug's game. Having a lot of secrets exposes you to acts of corruption by others. It' not worth it.

Hi Irelander

i have two questions to you if you dont mind asking (i also noticed in another thread that you are - as it looks - kind of an exception in being 100% tax compliant).
1) do you do this (declare all your income / assets) out of risk considerations (chance of getting caught) or for moral reasons (you live here, you feel obliged to pay your share?) Or is it a combination of the two?
2) do you also adhere to the law when it comes to other areas (especially currency controls)?
Just curious ....

 

[on the brink]

While the post-pandemic future is uncertain for most countries, the outlook for Argentina, which placed 139th out of 141 countries in a ranking of economic stability compiled by the World Economic Forum, is among the most precarious.

As far as I remember, Argentina has been pirouetting at the edge of a financial precipice. Much like Italy, in a perpetual state of crisis, but stumbling on.

 

[Fiscal]

What is even the benefit of declaring any form of residency in Argentina, over coming in and out as a tourist? What do you get with a DNI? The ability to open a bank account full of worthless pesos and attract the attention of AFIP? Buy a house you may never be able to sell again at inflated real estate prices because rich people in Argentina buy property instead of putting it in bank accounts? You can get health insurance via OSDE without a DNI. You don't need a car in Buenos Aires. If you have USD, it is far better to rent in pesos, rather than pay $300K USD to buy some ugly apartment in a rapidly aging building.

 

[Fiscal]

Hi Irelander

i have two questions to you if you dont mind asking (i also noticed in another thread that you are - as it looks - kind of an exception in being 100% tax compliant).
1) do you do this (declare all your income / assets) out of risk considerations (chance of getting caught) or for moral reasons (you live here, you feel obliged to pay your share?) Or is it a combination of the two?
2) do you also adhere to the law when it comes to other areas (especially currency controls)?
Just curious ....

The only moral laws in Argentina are anti-moral. F over the other person (or gov) before they f over you. Does anyone in Argentina actually pay 100% of the taxes they truly owe? And to what end? So corrupt government officials can enrich themselves and their family?