Foreign Income Tax Help

[Steph170]

Hi all,

Can anyone advise on the following?

UK citizen working for a US company with no association with Argentina or the UK, up until now paying tax to the UK as self employed contractor- now will have to declare as non UK resident as married an Argentine.


Where does he pay tax? Still want to be paid into UK bank account from US company.

Thanks.

 

[Girino]

Where does he pay tax?

Where he spends most of his time in a year, i.e. where he resides.

 

[Steph170]

Thanks- OK, so he resides in Argentina but gets paid into a UK account. Still has to pay taxes to Argentina?

 

[Girino]

Most Argentine freelancers I know, they all get paid outside of Argentina for obvious reasons. They all have an account in Uruguay or the US, and then find a way to get the money down here.

The Argentine law, though, says the all of the funds received in foreign currency must be converted in pesos (clearly through an official channel), but nobody I know follows this. I am not sure if they wire in some money to prove something to AFIP, or if they skip this completely. The ones I know have also Argentine clients so they do these works en blanco.

 

[Girino]

I just wanted to add some considerations:

1. I think that the main issue here could be the UK wanting to know why there is undeclared money coming into his account. I don't know the UK specifically, but for some countries you can report you are a citizen living abroad, though you might be still required to file a tax return if you have real estate or other revenues in your home country (e.g. if you invest that money). Other countries, such as the US, have decided their citizens must file a tax return regardless. In any case, where a tax treaty between the two countries exist (e.g. between the US and Italy), you can compensate any tax already paid abroad. Even in this case, you might be still required to pay something to your country. On AFIP site there is a link to the tax treaty between Argentina and the UK.
2. Finally, if your friend is considering returning to the UK at some point of his life, it might be worth considering to keep paying taxes in the UK in order to build up his pension fund for when he will retire.
3. I am no accountant, so your friend should seek for professional help.