Do I need to pay taxes with a Rentista Visa

[twoshoes]

Hey there, sorry if this question has been asked before, I couldn't find it if it was.

Do I need to pay any taxes (especially some kind of wealth tax on international assets) if I receive a Rentista Visa?

My family has been in BsAs for a week now and we plan on applying for a Rentista Visa soon. We want to be in South America for the next 12 to 18 months and as of now we hoped that most of that would be in Argentina. We talked with the consulate in the months leading up to the move and have all our documents with us and apostilled. While doing some research last night I came across something that said I may have to pay a wealth tax on worldwide assets or something. If that's true, I would much rather take my chances getting turned away on a boarder run than hire somebody to do my taxes and have Argentina take a cut out of the property I own in the United States. I have no problem spending the rest of our time in Chile or Uruguay.

Am I misunderstanding a lawyer's website who is trying to scare me into signing up for his services or are there tax consequences with temporary residency?

I don't plan to do any work down here, and if I were to get a job, I have no problem paying income tax. I just don't want to go back to the US after this 18 month adventure and then find out I got hit with a huge tax bill.

Thanks for the help!

 

[MilHojas]

¿Qué es el Impuesto sobre los Bienes Personales? - Bienes personales - Ganancias y bienes personales | AFIP

Información general sobre qué es el impuesto.

www.afip.gob.ar

 

[Quilombo]

As always, let me preface this by saying I'm not a lawyer, nor an accountant.

Income taxes, including the infamous Bienes Personales tax is based on fiscal residency.

According to this article, you would obtain fiscal residency in Argentina upon gaining precarious,
temporary, or permanent residency as per the National Directorate of Migration (i.e. not being a tourist)
AND having spent 12 months physically present in Argentina (with temporary absences of less than 90 days).

For example, if you petition migraciones tomorrow and they grant you precaria residency, and you stay in
Argentina until October 4th 2023, you will then become a fiscal resident of Argentina. Now, there is some debate
amongst members here whether it is 12 months AFTER you get a temporary or permanent DNI, OR if the clock
starts the second you get the precaria certificate that lets you legally stay here as a non-tourist.

Now, all this being said, let's for the sake of argument say you 100% meet the fiscal residency requirement and
are required to make the DDJJ for the Bienes Personales but chose not to. What will happen? Most members will
say "Nothing! Don't sweat it, AFIP can't even get politicians to pay their taxes!" and while they're not wrong per se,
I believe in setting the facts out and letting people decide what decisions/risks to make for themselves, not promising
something will or won't happen. Other members don't appreciate this approach, but I believe it is prudent to be aware
of what can happen, keeping in mind that it doesn't necessarily mean it will.

So, brass tacks: in the above mentioned scenario it would technically be tax evasion, but I personally wouldn't stress
about it. You'd be violating the letter, but not the spirit of the law, since it's meant to capture Argentine citizens who have
mainly purchased properties and other assets abroad to hide their wealth from AFIP (and, for legitimate reasons such as
to hedge against another corralito/local economic incompetence) while living here full time, enjoying the benefits of the
state while not contributing to its upkeep.

Also, you don't have Argentine citizenship, so banks and other financial institutions wouldn't be automatically sharing any
info about you with AFIP should Argentina and the US strike an agreement similar to the OECD one. And finally, there's the
extremely limited resources AFIP has. They'd first need to prove your fiscal residency, then prove that you knowingly breached
the law (granted, ignorance of the law is not an excuse, but still) then they'd have to have a forensic accountant determine
your net worth, which would require international cooperation between I assume AFIP/the PFA and the FBI/IRS to
locate property deeds, stock certificates, cash savings, etc. in the US and assign a value, etc.

As you've likely figured out already, the odds of this happening are, in my layman's opinion, beyond very low. AFIP can't even get
people here to pay VAT 100% of the time, so the odds they're going to go on some sort of international fishing expedition to get an
American woman and her family that have basically been long term tourists (who plan to leave 6 months after gaining fiscal residency
anyways) to pay a few thousand dollars in taxes (or nothing, depending on your net worth) has less of a chance of happening than
Alberto Fernandez winning the Nobel Prize in Economics.

So, the choice is yours as to what to do, but I know what mine would be if I were in your shoes. Enjoy Argentina and welcome to the forum!

 

[Alby]

The other point to make is this. Your rentista residency is unlikely to be straightforward or quick. It may not happen at all. This solves any tax potential wealth tax problem completely. Even in the worst-case scenario (the clock for eligibility start for the wealth tax starts 12 months from day 1 of the precaria), it will be well into 2023 before you get the precaria. The 12 months will therefore be up sometime in 2024. The wealth tax is a snapshot of your assets on the 31 of December each year. In your case, under that scenario, 31 December 2024. By then, you are long gone.

Your problem is not going to be tax. It is going to be getting this rentista residency. And not having your stay here marred by regular interactions with the immigration authority (Migraciones) in your attempts to get it.

It is highly improbable that you will have all the documentation they require first time, in the form they require it. And you need to have a minimum critical mass of it before they will issue the precaria.

If by some slice of luck or good management, you provide the documentation that the first level of assessment requires (that is, that the person lowest in the chain deems, on that day, depending on their mood, to be sufficient), then you will be reasonably well placed. They will issue the precaria. They may then take the full 12 months of your stay to assess the application, which works to your advantage to some extent because you are completely legal for as long it takes them to get around to making a decision. It is also true, unfortunately, under that scenario, that when staff higher in the chain are reviewing the documentation they may well query it and ask for more information (with a deadline). This will generally involve obtaining more documentation from home, having it apostilled and translated and so on. At that point you may wonder why you went down the rentista path. That scenario is quite likely, which is what I mean about this having the potential to severely impact your enjoyment of your time here.

If your luck is out, and you don't even have enough documentation to get to first base (i.e., convince the individual at the first level of assessment to issue the precaria), you will most likely find yourself needing getting on a plane in the next few weeks to go home to find (or create) and apostille the documentation Migraciones seek.

 

[Greg S]

I say pay up!

 

[steveinbsas]

Do I need to pay any taxes (especially some kind of wealth tax on international assets) if I receive a Rentista Visa?

As you already know, the visa rentista is good for one year, and based on my own experience, having a DNI asap is desirable, especially if you plan on staying a year or more witht the exception of possibly creating a "bienes personales" tax liability on the foreign assets which produce the income that you would be demonstrating to migraciones to obtain the visa.

You may also know that you become a fiscal resident after you have had the temporary residency for one full year.

I am not sure if you woud owe taxes for that year if you leave the country before your rentisa visa expires and you do not renew it.

I seriously doubt that woud be the case, but I could be wrong.

Based on what you have written, renewing the visa rentista for a second year does not appear to be your intention.

My family has been in BsAs for a week now and we plan on applying for a Rentista Visa soon. We want to be in South America for the next 12 to 18 months and as of now we hoped that most of that would be in Argentina. We talked with the consulate in the months leading up to the move and have all our documents with us and apostilled. While doing some research last night I came across something that said I may have to pay a wealth tax on worldwide assets or something. If that's true, I would much rather take my chances getting turned away on a boarder run than hire somebody to do my taxes and have Argentina take a cut out of the property I own in the United States. I have no problem spending the rest of our time in Chile or Uruguay.

Am I misunderstanding a lawyer's website who is trying to scare me into signing up for his services or are there tax consequences with temporary residency?

I don't plan to do any work down here, and if I were to get a job, I have no problem paying income tax. I just don't want to go back to the US after this 18 month adventure and then find out I got hit with a huge tax bill.

In my opinion (based on personal experience in Argentina), many (but not all) lawyers and accountants will BS you until the cows come home to get you to pay them fees. You shouldn't have to use a lawyer to deal with tax issues with AFIP. Argentine accountants are the ones to deal with those issues and file declarations (if you can't or are afraid do so on your own).

I (seem to) recall posts that indicated that temporary residents are not subject to the bienes personales on assets outside Argentina, but that is a good question to ask an Argentine accountant. This never applied to me, so I have no experience paying the tax on foreign assests.
Bottom line, if you leave the country before your one year temporary residency expìres, I don't think you have anything to worry about.

You should have no bienes personales tax liabliity in Agrentina during the first year, and, unless you get a job that pays en blanco, you won't need to register wtith or make any declarations to AFIP

If you want to return to Argentina after your visa rentista expires, you would have to reenter as a tourist, but this should not be considered a "visa run" by the border agents and I seriously doubt that they would give you any trouble. Whether or not you could go to migraciones and get a 90 day extension of the new tourist permit is another question, but at that point you could either overstay the new 90 day visa until you wanted to leave or go to Uruguay or Chile befor it expires and stay there until you decide to return home.

One think to keep in mind is that there is (or at least used to be) a 30 day grace period to renew the visa rentista afer it expires. Even though you will have no intention of doing so, that might be something you can tell a border agent when you reenter, if questioned. You could explain that your are aware of the fact that your residency has expired, but you are planning to start the renewal process during the grace period.

Also, though perhaps not very important. if you return to Argentina after your temporary residency expires, you will still have your DNI card which you would probably will be able to use as an acceptable ID at many businesses while you remain in Argentina. If not, your passport will suffice, but your "right to work" (at least en blanco) will no longer exist.

I am not suggesting that you do anything "illegal" (including tax evasion). I have never encouraged (or even hinted that) anyone should evade paying any income, asset, or property taxes that they owe in Argentina (or ever make a "visa run" which is actually NOT legal). I have pointed out that is is better to overstay a tourist pemit and pay the fine when leaving the country on multiple occasions than making a visa run, but I never put myself in a position to do either.

For obvious reasons I believe that it is preferable to legally avoid paying taxes whenever possible and the only way I know of doing that is by not becoming liable to pay them in the first place. So, if what I have written is correct, you should be able to avoid the bienes personales tax liablitiy completely by leaving the counry before your via expires and never renewing it, even if you return to Argentina after it expires.

PS: If anyone can poke holes in what I have written in this post, I wholeheartedly encourage them do do so.

PS2: Another question to ask is if you would be liable to pay any taxes in Argentina on the income from the assets that produce the passive income you will declare to migrciones to qualify for the rentista visa. Leaving the country before your one year temporary residency expires and never renewing it might make a difference. So would the amount of the monthy income. If my info is correct (base what I found on the AFIP website) and it is below $200.000 pesos per month, you may already be in the clear.

 

[Alby]

In my opinion (based on personal experience in Argentina), many (but not all) lawyers and accountants will BS you until the cows come home to get you to pay them fees.

PS2: Another question to ask is if you would be liable to pay any taxes in Argentina on the income from the assets that produce the passive income you will declare to migrciones to qualify for the rentista visa.

If Twoshoes is still following this thread, if you really intend to persist down this particular path it would be highly advisable to engage an immigration lawyer as an intermediary with Migraciones. Someone who will do the work for you. Don't be lulled into a false sense of security by any positive dealings you may have had with the consulate at home. Migraciones is another agency of government, another sub-world altogether, especially on the rentista residency. Adjectives like harrowing, and humiliating come to mind to describe the experience of dealing with this entity. If you want a test of character at this stage in your life, then try and go it alone. But otherwise, get a lawyer, or find another pathway.

I think we have established that Twoshoes is at no risk of even becoming liable for the wealth tax. Nonetheless, it's worth saying that of course those liable have to pay tax twice on their asset: on its value and on the income it generates. This is one of the criticisms of the tax. For rentistas caught out (not Twoshoes case, fortunately), the work for AFIP would presumably be a snap. The rentista has freely declared both their asset and its income. Presumably AFIP would just send the evasive taxpayer its own procedures for valuing the asset each year and demand he or she to follow them and pay up. No need for any forensic and costly work by AFIP.

 

[twoshoes]

Thanks guys, very good and detailed explanations. I appreciate how much time you put into your answers.

Since I think I have all or most of my documents anyway, I think I'll give it a try. My FBI background check is still valid for another month and if I miss that target, oh well. We have extra paperwork back home fingerprinted and signed. Just have to have the family send it to DC to get processes again.

So just so I get the vocabulary correct, the 'precaria certificate' is not a VISA. It is something I receive when they start the process and this allows me to come and go until I actually get granted or denied the VISA. Correct? If so, then it truly is in my best interests (for my particular situation) to get the process started, and then hope bureaucracy takes so long that I don't have a follow up meeting until I plan on leaving for good a year or so later. Correct?

Also, as SteveninBsAs says, that DNI looks like it would be very nice to have. Although I am already starting to learn to live without it and life seems doable without. Would I receive the DNI when I am approved for the VISA, or does that come along as soon as Migraciones starts the process with me.

Again, you folks are a wealth of knowledge. Thanks for your insight.

 

[lunar]

So just so I get the vocabulary correct, the 'precaria certificate' is not a VISA

It is a paper letter stating that your application is in progress.

Would I receive the DNI when I am approved for the VISA

You will need to apply for it. Visa issues are handled by the Immigrations, DNI is issued by the Ministerio del Interior. Different Agencies.

Tramitar el DNI

El Documento Nacional de Identidad (DNI) es el documento único de identificación con el que contamos los argentinos (en el país o en el exterior) y los extranjeros con domicilio en nuestro país.

www.argentina.gob.ar

 

[Alby]

Thanks guys, very good and detailed explanations. I appreciate how much time you put into your answers.

Since I think I have all or most of my documents anyway, I think I'll give it a try. My FBI background check is still valid for another month and if I miss that target, oh well. We have extra paperwork back home fingerprinted and signed. Just have to have the family send it to DC to get processes again.

So just so I get the vocabulary correct, the 'precaria certificate' is not a VISA. It is something I receive when they start the process and this allows me to come and go until I actually get granted or denied the VISA. Correct? If so, then it truly is in my best interests (for my particular situation) to get the process started, and then hope bureaucracy takes so long that I don't have a follow up meeting until I plan on leaving for good a year or so later. Correct?

Also, as SteveninBsAs says, that DNI looks like it would be very nice to have. Although I am already starting to learn to live without it and life seems doable without. Would I receive the DNI when I am approved for the VISA, or does that come along as soon as Migraciones starts the process with me.

Again, you folks are a wealth of knowledge. Thanks for your insight.

As you've guessed, it's question of language and terminology. The word "visa" doesn't really seem to mean anything here. You don't get a visa. You submit to the process. If you get to first base (successfully submit a minimum critical mass of documents), a delegate in Migraciones signs a piece of paper that is your authority to live here for 90 days under the category (rentista, in your case) you applied for. You get a copy of this document. It's your precaria. You will have to keep renewing your precaria every 90 days while they either (i) sit on your application doing nothing, (ii) request more information, or (iii) approve it. As long as you renew your precaria every 90 days, you are legally entitled to stay here. Should you ever get to the end of the process (i.e., they approve it), another delegate signs another piece of paper that is your authority to live here for 365 days from the date of this piece of paper. You get a copy of this piece of paper, which is proof of your residencia, which commences as of that date. At this point, via a slightly separate process and different part of the government bureacracy, they issue a plastic identity document (DNI), which will arrive at your home address a few weeks later.

In your case, the best thing that could happen would be that you DO currently have all the documents they will require at the first screening stage for them to issue the precaria. In that case, you are set. As you say, they can take their sweet time to process, and all you have to do it is seek a renewal every 90 days (and, respond to any requests for additional information that might come along). But if you don't have all the documents now that they require, you will remain a tourist, with your 90 days counting down from the day your arrived.