I don't get why people are doing the blanqueo

[pixer12]

What am I missing? What benefits do they get for participating? Favorable tax treatment on the assets, which presumably they wouldn't have paid if they hadn't regularized the assets in the first place?

I thought people here didn't trust local banks, ergo why they kept USD in the colchón in the first place.

 

[redlobster]

What am I missing? What benefits do they get for participating?

Have you watched Breaking Bad? Do you know why Mr. White and Skyler had a car wash business?

I thought people here didn't trust local banks, ergo why they kept USD in the colchón in the first place.

If you earned the money in the old-fashioned way, paid taxes on it, and have paystubs, you can just bring them to the bank without needing the 'blanqueo' program.

 

[antipodean]

What am I missing? What benefits do they get for participating? Favorable tax treatment on the assets, which presumably they wouldn't have paid if they hadn't regularized the assets in the first place?

I thought people here didn't trust local banks, ergo why they kept USD in the colchón in the first place.

The ability to actually spend their money- buy (and thus eventually be able to sell...) a house, a car, invest in their business or do something serious with it in Argentina.

There is no requirement to keep the money in local banks after it has been declared (only if you want to avoid paying a 5% tax for assets over the first US$100.000, or if the source of the money being declared corresponds to goods or services exported from Argentina - such as for Argentine tax residents working online jobs for foreign clients...). There is also no requirement to bring the money/ asset to Argentina if it is abroad - in this regard it is unlike previous blanqueos where cash held in accounts abroad also had to be repatriated.

The other big benefit for some is that by doing so, they are eligible to pre-pay and cap their bienes personales tax for the next 5 years at 0.05% (regardless where the wealth it is located) and have it capped at a very low rate until 2038 - potentially meaning big tax savings if their personal wealth happens to grow over this time or any of the next governments hike bienes-personales tax rates.

Not to mention the ability to sleep soundly at night and avoid any potential criminal charges (or even civil lawsuits) relating to any tax liabilities (and beyond taxes, other liabilities such as compliance with capital controls etc) from prior to the blanqueo.
Some probably have the fear that after the blanqueo, the government of the day will step up crackdowns on tax evasion and get better at detecting undeclared assets here or abroad.

 

[redlobster]

... cap their bienes personales tax for the next 5 years at 0.05% (regardless where the wealth it is located) and have it capped at a very low rate until 2038

Well, nothing stops them from introducing other taxes once your assets’ worth is established.

Basically, it is a bet on the benevolence of the government - the same government that tear gases retired people protesting over low pensions.

Next time this or some future president says, '¡No hay plata!,' they won’t immediately think about the money you’re keeping abroad, so you can sleep soundly at night.

 

[LuckyLuke]

Well, nothing stops them from introducing other taxes once your assets’ worth is established.

Basically, it is a bet on the benevolence of the government - the same government that tear gases retired people protesting over low pensions.

Next time this or some future president says, '¡No hay plata!,' they won’t immediately think about the money you’re keeping abroad, so you can sleep soundly at night.

What happens when Mr. Expat needs to buy a property? Now your options are explaining to AFIP whether the money you wired in was earned prior to your tax residency (and why you never declared or paid bienes taxes on it) or that it was earned during your tax residency and never declared or paid income tax on it. Or are we still talking about driving around town with a suitcase full of your life savings handcuffed to your wrist?

 

[antipodean]

Well, nothing stops them from introducing other taxes once your assets’ worth is established.

Basically, it is a bet on the benevolence of the government - the same government that tear gases retired people protesting over low pensions.

Next time this or some future president says, '¡No hay plata!,' they won’t immediately think about the money you’re keeping abroad, so you can sleep soundly at night.

And they could increase VAT to 100% on the food you buy, they could impose an exit tax, they could automatically tax your WU transfers, they could even tax the air you breathe the next time the government of the day say's "no hay plata"... so if these kind of "ifs" are keeping you awake at night, I suggest Argentina is really not the country for you.

Anyway as far as bienes-personales go, the discounted rate you and this government enter in to, becomes a personal right that is legally protected by the constitution (so not that easy for any subsequent government to change without inventing something else to replace it entirely... and if it looks like the next government of the day is hungry for repatriation of dollars abroad and is mulling some kind of new tax or capital control to get their hands on them, then it is pretty easy to "spend" those dollars abroad in order to have nothing to repatriate).