Argentina's New Tax On Residents Global Wealth

[Fiscal]

How is Argentina going to know what assets you have outside the country?

 

[Sequoia1321]

How is Argentina going to know what assets you have outside the country?

I don't know, but I'd be scared of possibly getting in trouble with the law, or maybe it might be the wrong thing to do morally (could also cause trouble I think).

 

[gracielle]

How is Argentina going to know what assets you have outside the country?

Hypothesis....a foreign national, from a country without a tax treaty with ARG, is granted permanent residency on the basis of rental income derived from a property owned abroad?

 

[jeff1234]

How is Argentina going to know what assets you have outside the country?

Here's my understanding. I'm sure I'll be corrected if I miss something.
There is a protocol for sharing information the assets of inviduals. Its called 'The Common Reporting Stantdard' Theoretically Argentina would search the CRS files for assets owned by people domiciled in Argentina. However neither the US nor the EU are partcipants.

The Common Reporting Standard (CRS) and the Automatic Exchange of Information

The Common Reporting Standard has been created to help authorities work with financial institutions to eliminate tax evasion and affects most non-residents. It's vital you understand your requirements to avoid fines.

www.expertsforexpats.com

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The US participates in the The Foreign Account Tax Compliance Act (FATCA) which is another information sharing mechanism but from what I can see it's geared toward reporting overseas assets of Americans. https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

 

[Sequoia1321]

Here's my understanding. I'm sure I'll be corrected if I miss something.
There is a protocol for sharing information the assets of inviduals. Its called 'The Common Reporting Stantdard' Theoretically Argentina would search the CRS files for assets owned by people domiciled in Argentina. However neither the US nor the EU are partcipants.

The Common Reporting Standard (CRS) and the Automatic Exchange of Information

The Common Reporting Standard has been created to help authorities work with financial institutions to eliminate tax evasion and affects most non-residents. It's vital you understand your requirements to avoid fines.

www.expertsforexpats.com

.

The US participates in the The Foreign Account Tax Compliance Act (FATCA) which is another information sharing mechanism but from what I can see it's geared toward reporting overseas assets of Americans. https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

Who knows how these laws will change in the future. Then one would be in the hole for more taxes and penalties? Even if you leave the country can they try to come after you? And in the future I'd wonder if they'd have AI doing much of investigations that presently would not be as easy to do, not sure if that matters in this case but just a thought. You'd have to be a real expert to try to mess around with these things, and even experts are often wrong. Big companies with major accountants and lawyers are still getting into various legal and tax issues, I think Google was one if I recall.

 

[antipodean]

How is Argentina going to know what assets you have outside the country?

Most commonly bank transactions and contracts pertaining to your spending here and/ or if you get pulled from the hat for an AFIP audit. More often than not it would be triggered by the bank reporting transactions.

If you are spending more money than you are declaring they will want to know where it comes from. If at any point you have remitted or spent money that can only be linked to a foreign asset it could be exposed.

If they investigate you then there are tax information sharing agreements in place with the US where they could get access to what taxes you are paying there, which again could expose an asset.

 

[Alby]

Hypothesis....a foreign national, from a country without a tax treaty with ARG, is granted permanent residency on the basis of rental income derived from a property owned abroad?

Correct, to a point. Those people (Rentistas) are at the greatest risk. But it is worse still. Even people people on temporary residencies are liable for the tax. Indeed, even people waiting on a Precaria for 12 months become liable from the 13th month. And a double tax treaty only protects if it explicity mentions a wealth tax, which it only does if both countries have wealth taxes. And even in that case, it only protects you up to the wealth tax amount you pay at home; since Argentina's wealth tax is so high, AFIP will levy the balance between it's wealth tax amount and the wealth tax amount you pay at home. Rentista precaria holders and temporary residents (and permanent residents who got there based on the Rentista category) need to be alert to this risk.

 

[antipodean]

Correct, to a point. Those people (Rentistas) are at the greatest risk. But it is worse still. Even people people on temporary residencies are liable for the tax. Indeed, even people waiting on a Precaria for 12 months become liable from the 13th month. And a double tax treaty only protects if it explicity mentions a wealth tax, which it only does if both countries have wealth taxes. And even in that case, it only protects you up to the wealth tax amount you pay at home; since Argentina's wealth tax is so high, AFIP will levy the balance between it's wealth tax amount and the wealth tax amount you pay at home. Rentista precaria holders and temporary residents (and permanent residents who got there based on the Rentista category) need to be alert to this risk.

Just to add that the only ones who are exempt from taxes on foreign income are those who are on temporary residence visas as an employee of a company here for a period not exceeding 5 years.
This group are usually not obliged to file a tax return or declaration as I understand which seems to contradict/ complicate compliance with the wealth tax requirement keeping with true Argentine efficiency.

 

[Alby]

Just to add that the only ones who are exempt from taxes on foreign income are those who are on temporary residence visas as an employee of a company here for a period not exceeding 5 years.
This group are usually not obliged to file a tax return or declaration as I understand which seems to contradict/ complicate compliance with the wealth tax requirement keeping with true Argentine efficiency.

Correct. The change to the wealth tax rules introduced in late December aligns liability for the wealth tax with liability for income tax (previously, the treatment was different). So, if you are here on an employment contract of less than five years you are free from income tax, and, thus, also free from the wealth tax. Everyone else, even precaria holders who are still waiting after 12 months, is, technically, liable for the wealth tax. And the most exposed to detection: those whose presence here derives from rent obtained from overseas assets declared to Migraciones as part of the Rentista migration category.

 

[EL_TIGRE_de_Tigre]

Correct. The change to the wealth tax rules introduced in late December aligns liability for the wealth tax with liability for income tax (previously, the treatment was different). So, if you are here on an employment contract of less than five years you are free from income tax, and, thus, also free from the wealth tax. Everyone else, even precaria holders who are still waiting after 12 months, is, technically, liable for the wealth tax. And the most exposed to detection: those whose presence here derives from rent obtained from overseas assets declared to Migraciones as part of the Rentista migration category.

Given the exposure, a person would have to have their head examined for going the Rentista visa route. It would be far better to share time between two or three countries 90 days at a time rather than volunteer a good view of your taxable assets to The Argentine Government.