Argentina's New Tax On Residents Global Wealth

[SecretShopper]

As the OECD link posted by Antipodean says (although it--the link--contains bad grammar and the unfortunate omission of a key word): "an individual is [tax] resident in Argentina when...is a foreigner who has obtained its permanent residence status in Argentina or has legally been living in the country for twelve or more [months]." (My emphasis and my addition of the missing words.) This statement is backed up by PwC as follows:

• Foreign individuals residing in Argentina (for reasons other than work) for more than 12 months, as of the 13th month of presence in Argentina. (https://taxsummaries.pwc.com/argentina/individual/residence)

Perhaps most importantly, the Argentine income tax law itself says: "Las personas humanas de nacionalidad extranjera que hayan obtenido su residencia permanente en el país o que, sin haberla obtenido, hayan permanecido en el mismo con autorizaciones temporarias otorgadas de acuerdo con las disposiciones vigentes en materia de migraciones, durante un período de DOCE (12) meses." http://servicios.infoleg.gob.ar/infolegInternet/anexos/330000-334999/332890/texact.htm (article 116B).

It is hard to conclude that when the law refers to "temporary authorizations issued in accordance with prevailing migrations regulations", it is not referring to temporary residencies granted to students, rentistas, pensionistas, investors, religiosos etc. Anyone, in fact, other than employees on contracts of up to five years, who, as we have established on this and other threads, seem to be the only ones who escape the broad sweep of the tax law (unless a double tax treaty comes into play and to the rescue). Again, get professional advice about how to operate in this context, but the wording of the law is reasonably clear and would seem to indicate that at the conclusion of the first 12 months of almost any temporary residency issued under any of the categories, one becomes a tax resident here.

Whether "autorizaciones temporarias" is confined only to temporary residencies, or would also include precarias issued by Migraciones that have dragged on for more than 12 months, or even tourists stuck or who have stayed for over 12 months due to COVID (the subject of a separate taxation thread currently running), is a matter for interpretation that I guess a good lawyer would be happy to take up in the event AFIP took a broad view of the case and bothered to try and pursue anyone in these situations.

Great info. Thanks. So practically I wouldn't have to worry about taxes until I became a citizen since I don't plan on staying for 12 months consecutively. I wonder if someone could be in the country 11 months and then leave for a month and come back to get around the 12 month rule.

 

[antipodean]

Great info. Thanks. So practically I wouldn't have to worry about taxes until I became a citizen since I don't plan on staying for 12 months consecutively. I wonder if someone could be in the country 11 months and then leave for a month and come back to get around the 12 month rule.

Note quite - 13th month of presence in the country you’ll be a tax resident, or when you get PR status, whatever comes first.

Argentina - Individual - Residence

Detailed description of individual residence rules in Argentina

taxsummaries.pwc.com

Argentina

Thinking Beyond Borders for Argentina

home.kpmg

 

[Alby]

I wonder if someone could be in the country 11 months and then leave for a month and come back to get around the 12 month rule.

The tax law deals with this tactic. The continuation of the sentence I quoted above is: "...supuesto en el que las ausencias temporarias que se ajusten a los plazos y condiciones que al respecto establezca la reglamentación, no interrumpirán la continuidad de la permanencia."

Try as I might, I cannot interpret with confidence its meaning. We would need a tax advisor (or AFIP itself) for that. But I suspect it means that as long as your absences during the 12 months aren't long enough to disqualify you from maintaining your temporary (migraciones) residence (i.e., your absences don't exceed 183 days), you will still be tax resident from that 13th month after your temporary residence was granted.

(This is all very technical of course. If you are interested in knowing where you technically might sit in regard to tax obligations as a student temporary resident and later as a permanent resident or citizen, this information is useful. But many people on this site will argue that it's all irrelevant because AFIP will not take any interest in you.)

 

[SecretShopper]

Well at this point it's all just information gathering until immigrations decide to start issuing student visas again.

 

[Ronnie Hotdogs]

What if you gain permanent residency through being spouse of an Argentine citizen, but have never stayed more than 183 days in the country?

 

[Alby]

What if you gain permanent residency through being spouse of an Argentine citizen, but have never stayed more than 183 days in the country?

Permanent residency would seem to trigger tax residency, full stop. However, once you have your permanent residency (and hence your tax residency) you can "lose" your tax residency by staying out of the country for 12 months. That's what the law says, at least.

If you then return to Argentina after 12 months you then fall into a grey zone where you may or may not become once again a tax resident, depending on how you divide your time between Argentina and another country, and which country is deemed to be your "center of vital interests" (as per the OECD link in Antipodean's post). It looks from the OECD link that if you are married to an Argentine, and have a house here, it might be difficult to argue that Argentina is not your center of vital interests.

 

[Ronnie Hotdogs]

Will hasten my exit from the country if that’s the case.

 

[Alby]

Only if they catch you...

 

[Churchill]

My hunch is that quite a few expats are paying the tax, after all it is the law, but don't want to come on here and face derision for doing so (something which I would never do I wish to quickly add).

 

[Alby]

Will hasten my exit from the country if that’s the case.

While this is no help to US taxpayers, it is also worth pointing out that Argentina does have double taxation treaties with most major European countries, Canada, and Australia. These are unlikely to help with Argentina's bienes personales tax, but should save people who pay income tax in those countries from having to pay it again in Argentina. The PDF versions in both languages are here: https://www.argentina.gob.ar/economia/ingresospublicos/conveniossuscriptos

What the mechanism here to trigger one's exemption from income tax at tax time, I don't know. Maybe you don't, maybe you lie low and just keep the relevant agreement in your sock ready to pull out in the future if AFIP ever knocks on the door.