Expat Tax Advice - Looking For Accountant

[Delaluz26]

This is basically what my Argentine accountant told me. I have earnings, investments, and real estate abroad. Unless I could divest of most of them it wasn't feasable. The obligations were grim.

Nonetheless I would like to know if anyone works with an accountant who is familiar with both countries...

 

[americas]

Alright, alright, obligations are grim and the outlook is terrible.

Generally speaking, for people here with income from outside argentina, what was the ballpark effective tax rate? In the US alone, effective tax rate for me would be between 20%-30% of annual income -- no house or dependents.

Can taxes be paid with pesos from Western Union, or is the official rate somehow needed when verifying where the money is coming from?

 

[Cordoba]

The rate would be close to 35%. Doesn't take much income to hit that rate. You can pay with WU or Blue Peso so trims the real tax rate paid. Same with the wealth tax. If it is foreign (US sourced) income then you get a credit for taxes already paid in the USA. All the dollar incomes and taxes paid would be valued at the official rates so low in relation to pesos for calculating the tax and credits. You can turn around and pay the tax using CCL or Blue. If the parallel exchange existed indefinitely where it is 60% more then it wouldn't be bad at all for income. When that eventually goes away or the gap shrinks which it historically does then the income in wealth taxes gets more ugly.

 

[americas]

"you get a credit for taxes already paid in the USA."

Does this look right?

Income tax: Argentina taxes up to the Foreign-Earned Income Exclusion (~$110,000) = $38,500 at 35% + US taxes beyond the FOIE limit & no argentina taxes beyond that point due to the credit? Or does it continue to be 35% total tax beyond that point, but some of the 35% goes to the USA and the remainder goes to Argentina?

Wealth tax: 2.25% - eg. $100,000 in wealth would be $2,250 (US income tax gives no credit for this number)

Will talk to an accountant and update this comment with that info

 

[Cordoba]

Please share what you hear.

I don't think it would be correct because the issue would be the earned income part. Investment or Rental income is easy, Those are sourced in the USA, taxable to the USA, and you claim a credit for those foreign taxes paid in Argentina.

Income earned in one country while present in another is going to be complicated. If you are legally responsible for it in Argentina, you could pay the 35% tax to Argentina but get to pay using blue rate pesos so the real rate is like 16%. You get USA credit for those taxes paid at the official rate so it eliminates your USA liability by the foreign tax credit. So no real need for the FOIE.

That would be awesome, especially for a high-income earner. Could save a ton of money if your effective rate is 20%-30%. I think the issue would be does your employer or self-employment then fall into converting currency at the official rate or establishing an Argentine entity. Remitting all that income tax might put you on the radar

If you are on a tourist visa without legal immigration status in Argentina and not physically present in the USA I could see where a case can be made that your USA wages/self-employed are excludable in the USA under the FOIE exclusion physical presence test, and your Argentina wages are excludable due to you being considered a slave for immigration and not subject to income tax.

 

[americas]

Aware of a "top 3" accountant firms in Buenos Aires who I could check in with?

 

[hudbrog]

Hi everybody. Reviving an old topic, I guess, but my question is the same. Can somebody recommend an english-speaking accountant that is avare of expat-specific topics? Specifically, I go a rentista-visa, now I want to:
1) figure out how to show my rentista-income properly
2) how to structure my money flow from external sources overall

 

[jowen71]

I am hesitant to open this can of worms because I dont currently take clients as I work in house, but I am a CPA with a license in Virginia and have lived here for 16 years. Generally speaking I don't give tax advice.

I will, however, say that reading "americas" post on Aug 4, I cannot follow your logic and I believe you are mistaken in understanding how the two tax structures work.

 

[americas]

I still have not spoken to an accountant about this but I have a few introductions scheduled. I'm going to talk to a big firm that has presence in both the USA and Argentina, although I'm not really sure of the tradeoffs between a big firm and a boutique shop. I feel that finding sound advice about this if I were an expat in England would be difficult but straightforward -- of course, I find it difficult to find sound advice when it comes to Argentina because nobody is too sure what's up.

Thanks jowen

hudbrug, send me a PM if you'd like more details. I'm collecting documents for the rentista visa and I have some questions too, so I might send a message tomorrow with some questions.

 

[Cordoba]

I am hesitant to open this can of worms because I dont currently take clients as I work in house, but I am a CPA with a license in Virginia and have lived here for 16 years. Generally speaking I don't give tax advice.

I will, however, say that reading "americas" post on Aug 4, I cannot follow your logic and I believe you are mistaken in understanding how the two tax structures work.

I might have my speculating wrong because the US may never cede the primary right of taxation to Argentina. From an IRS standpoint, I thought unearned income is primary to the country derived but earned primary rights went to where you physically earn it rather than country derived. So even a US w2 is foreign earned income if you are abroad earning for that day. This normally wouldn't matter for anything since there is no foreign tax paid on it to receive credit nor would most be eligible for the exclusion.

The whole thing is sort of moot with Argentina residence because you really can't earn wages abroad without bigger issues. What would be point of getting a tax credit for foreign taxes valued at the official rate if you have to pesofy all earnings at the official. So it would never happen.

For sure plenty of permatourists are using the IRS exclusion for their W2 wages under the physical presence test and disregard AFIP under an immigration law standpoint.

For legal residents with a foreign source wage income I don't see a reality without either ceasing the activity or more likely accepting certain non-compliance. If they deal in the US system no professional subject to Circular 230 would want any part of that knowingly. Probably why no wants to be directly involved in both.