Argentina's New Tax On Residents Global Wealth

gustavomoretto

Registered
Thank you Gracielle for sharing this information.

My bienes are my Social Security check and my TIAA Cref retirement money accrued over my 24 years of teaching at the City University of New York.
Unfortunately I teach music and not finances : ) and much of the information in that article leaves my mind spinning.

I heard that the Argentinean government would demand a 2.5 % tax over all of my life-long savings every single year whether I use that money or not.
I lack information as to whether my Social Security payments could also be interpreted as a bien personal.
This impuesto a bienes personales would become an equivalent of paying a gigantic annual rent for the benefit of living in my own country, am I correct so far?

The question is: how do the supposed-to-be-many foreign expats living in Argentina manage this huge problem?
Once again: thank you for sharing that article and I understand that there has been several discussions about this matter in this forum. If you could help me find such discussions it would be much appreciated.

Feliz anio nuevo!
 

gustavomoretto

Registered
i do not intend to be here long enough for them to try to pry extra money from my cold dead hands :)
Hi sts7049: are you planning to leave the country for good or are you thinking about those 180 days that, as I think I understand, you are allowed to stay without paying taxes?
 

jeff1234

Registered
Thank you Gracielle for sharing this information.

My bienes are my Social Security check and my TIAA Cref retirement money accrued over my 24 years of teaching at the City University of New York.
Unfortunately I teach music and not finances : ) and much of the information in that article leaves my mind spinning.

I heard that the Argentinean government would demand a 2.5 % tax over all of my life-long savings every single year whether I use that money or not.
I lack information as to whether my Social Security payments could also be interpreted as a bien personal.
This impuesto a bienes personales would become an equivalent of paying a gigantic annual rent for the benefit of living in my own country, am I correct so far?

The question is: how do the supposed-to-be-many foreign expats living in Argentina manage this huge problem?
Once again: thank you for sharing that article and I understand that there has been several discussions about this matter in this forum. If you could help me find such discussions it would be much appreciated.

Feliz anio nuevo!
Greetings, I did study Finance at CUNY so I'd distinguish between income and wealth. Taxing your SS checks would be an income tax.
Taxing you house, car, savings is a wealth tax.

In an extreme case Argentina could argue that SS has the same value as if you bought an annuity therefore it's your asset/wealth.
They could estimate the current value of all of your SS, pensions and annuities, multiply the total by 2.5% and send you a yearly bill. .

Here's the good news for you. The wealth tax doesn't affect anyone with assets under (I think) it's $2.4mm so unless you a getting a really big SS check each month you are safe.

Argetina is a sovereign state and it has the right to come up with whatever taxes they want. Collecting those taxes is another matter.
 

gustavomoretto

Registered
Greetings, I did study Finance at CUNY so I'd distinguish between income and wealth. Taxing your SS checks would be an income tax.
Taxing you house, car, savings is a wealth tax.

In an extreme case Argentina could argue that SS has the same value as if you bought an annuity therefore it's your asset/wealth.
They could estimate the current value of all of your SS, pensions and annuities, multiply the total by 2.5% and send you a yearly bill. .

Here's the good news for you. The wealth tax doesn't affect anyone with assets under (I think) it's $2.4mm so unless you a getting a really big SS check each month you are safe.

Argetina is a sovereign state and it has the right to come up with whatever taxes they want. Collecting those taxes is another matter.
Hi jeff124!
Thank you for your encouraging note!
I was highly discouraged last night (2020 anyone?) because I have also a retirement account in TIAA Cref which is part of all my retirement plans.
I can live off of my Social Security check in Argentina but it would be madness if they took taxes from my TIAA account.
I do need those savings as a backup and to purchase a car...and a bed : )
The $2.4mm amount you mention is in pesos or US dollars?
Happy new year by the way!
 

jeff1234

Registered
Hi jeff124!
Thank you for your encouraging note!
I was highly discouraged last night (2020 anyone?) because I have also a retirement account in TIAA Cref which is part of all my retirement plans.
I can live off of my Social Security check in Argentina but it would be madness if they took taxes from my TIAA account.
I do need those savings as a backup and to purchase a car...and a bed : )
The $2.4mm amount you mention is in pesos or US dollars?
Happy new year by the way!
You're very welcome. It works out to about $2,400,000usd. We're on page 12 of this thread, if you're interested theres alot of info on the preceeding pages.
It is likely that more countries, including the U.S. will implement wealth taxes because of the common belief that the rich are too adept at avoiding income taxes.
For example this latest stimulus package is over 1500 pages. If it only takes a few pages to say 'give everybody $600' I'd have to guess that the remaining 1400 pages are to benefit the rich and powerful. On the rare occaisions that I am mentioned in a tax law I'm generally referred to as
'the sucker' or 'taxpayer'.

Several European countries tried it and their wealthier citizens left. France repealed the tax.
 

gustavomoretto

Registered
You're very welcome. It works out to about $2,400,000usd. We're on page 12 of this thread, if you're interested theres alot of info on the preceeding pages.
It is likely that more countries, including the U.S. will implement wealth taxes because of the common belief that the rich are too adept at avoiding income taxes.
For example this latest stimulus package is over 1500 pages. If it only takes a few pages to say 'give everybody $600' I'd have to guess that the remaining 1400 pages are to benefit the rich and powerful. On the rare occaisions that I am mentioned in a tax law I'm generally referred to as
'the sucker' or 'taxpayer'.

Several European countries tried it and their wealthier citizens left. France repealed the tax.
That's great news!
I will check out page 12.
If I had to worry about a US account of US $2,400,00 then I wouldn't have anything to worry about : )
Thanks again and let's stay in touch!
 

Alby

Registered
It works out to about $2,400,000usd.
Putting Gustavo's case to one side (it now seems clear he doesn't have any hard assets and therefore indeed does escape the bienes personales tax), what is the basis of your belief that the wealth tax only kicks in at US$2.4 million?

As per the article Gracielle attached above, the tax first kicks in at 3 million pesos (about US$ 36,000 at the current official exchange rate). The most excessive tax rate (the 2.25% rate) kicks in at 18 million pesos (US$ 216,000). If it were 2.4 million US dollars, this thread would never have run to 12 pages; the tax would affect nobody.
 

jeff1234

Registered
Putting Gustavo's case to one side (it now seems clear he doesn't have any hard assets and therefore indeed does escape the bienes personales tax), what is the basis of your belief that the wealth tax only kicks in at US$2.4 million?

As per the article Gracielle attached above, the tax first kicks in at 3 million pesos (about US$ 36,000 at the current official exchange rate). The most excessive tax rate (the 2.25% rate) kicks in at 18 million pesos (US$ 216,000). If it were 2.4 million US dollars, this thread would never have run to 12 pages; the tax would affect nobody.

Two intersting points:
It does not say 'net assets'. So if you own a $5mm house you pay the tax even though you may have a $7mm mortgage. Many people will have to sell assets to pay the tax.
Whether you meet the threshold depends on the exchange rate.

.bloomberg.com/news/articles/2020-12-05/argentina-to-hit-the-rich-with-wealth-tax-as-covid-19-costs-rise
Argentina’s Senate late Friday approved a proposed one-time wealth tax, which seeks to boost government revenue by targeting millionaires with assets of more than 200 million pesos ($2.4 million)

.bbc.com/news/world-latin-america-55199058
Argentina has passed a new tax on its wealthiest people to pay for medical supplies and relief measures amid the ongoing coronavirus pandemic.
Senators passed the one-off levy - dubbed the "millionaire's tax" - by 42 votes to 26 on Friday.
Those with assets worth more than 200 million pesos ($2.5m) - some 12,000 people - will have to pay.

He was echoed by another tax expert, Iván Sasovsky. “The real scope of this tax will depend on the exchange rate at the time of the promulgation of this law,” he said.
“The issue is that since the idea first came up with the first numbers, today’s panorama is totally different, owing to the devaluation of the peso,” considered Sasovsky.
He explained that assets, as from US$3.3 million on which the tax was to be levied, were now down to US$2.3 million due to devaluation, which implies a raising of the tax floor.

Under the scheme -- also dubbed the "millionaire's tax" -- people with declared assets greater than 200 million pesos ($2.5mm) will pay a progressive rate of up to 3.5 percent on wealth in Argentina and up to 5.25 percent on wealth outside the country.
 
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