Income tax: should I work under or over 6 months?

#1
Hello everyone,

I'm new here but have some questions I haven't been able to find the answers to anywhere.

I am a US expat with a 1 year temporary work visa and have been working in BA for 5.5 months now, and love it here. However, family situation requires me to leave the country and go back to the US. I am arranging my departure (flexible date, but ASAP would be better) but upon reading the laws on income tax, understand that I would be taxed much more if I quit my job before 6 months. I am wondering whether I should wait until I've passed the 6 months and 1 day of work (since the start of my work contract) to stop working.

quote from here: https://home.kpmg.com/xx/en/home/insights/2011/12/income-tax_2014-12-26-10-48-12.html#01
"Foreign beneficiaries working temporarily in Argentina for no more than six months during the year, who earn income through either the visual or performing arts or other profession, are subject to income tax on these earnings at the rate of 24.5% (35% on assumed profit of 70% of gross income) to be withheld by the local payer. Other tax rates could apply depending on the type of income to be paid."

Is this correct? If I quite before the 6 months 1 day, do I risk having to pay more tax? At the moment my pay slips indicate I am being taxed 17% on my salary.

Also:
- Do I need to file tax declarations in Argentina? If so, do I need to do this before my departure or can it be done via post / online?
- would I have to declare this Argentine income to the IRS once I arrive in the US?

Does someone have experience with these types of situations?

Thank you in advance for the help!
 
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#3
Hi Julian,

Thanks for the info and reply. I'm not actually looking to hire anyone to file taxes for me, as my case is not so complicated. I am just looking for a confirmation of whether or not I understood the laws correctly, and if it is advisable to work just over the 6 month threshold or not to pay lower taxes.
 
#5
Hello everyone,

I'm new here but have some questions I haven't been able to find the answers to anywhere.

I am a US expat with a 1 year temporary work visa and have been working in BA for 5.5 months now, and love it here. However, family situation requires me to leave the country and go back to the US. I am arranging my departure (flexible date, but ASAP would be better) but upon reading the laws on income tax, understand that I would be taxed much more if I quit my job before 6 months. I am wondering whether I should wait until I've passed the 6 months and 1 day of work (since the start of my work contract) to stop working.

quote from here: https://home.kpmg.com/xx/en/home/insights/2011/12/income-tax_2014-12-26-10-48-12.html#01
"Foreign beneficiaries working temporarily in Argentina for no more than six months during the year, who earn income through either the visual or performing arts or other profession, are subject to income tax on these earnings at the rate of 24.5% (35% on assumed profit of 70% of gross income) to be withheld by the local payer. Other tax rates could apply depending on the type of income to be paid."

Is this correct? If I quite before the 6 months 1 day, do I risk having to pay more tax? At the moment my pay slips indicate I am being taxed 17% on my salary.

Also:
- Do I need to file tax declarations in Argentina? If so, do I need to do this before my departure or can it be done via post / online?
- would I have to declare this Argentine income to the IRS once I arrive in the US?

Does someone have experience with these types of situations?

Thank you in advance for the help!
IANAn Accountant.

First, that's KPMG and the people you ought to be reading are AFIP.
Second that statement you quoted doesn't use the word employer or employee but does use the words payment and profit so I interpret it as applying to people who work in Argentina temporarily on a fee basis. Rick Wakeman. Mick Jagger. That bloke Musicman wants us to see. The fee-paying organisation (Luna Park? Musicman?) should withhold that portion of the claimed fee.
Third, my son has worked as an employee all over the world and in all cases paying income tax is paying income tax. End of.
 
#6
Thanks a lot for your response! So essentially you're saying that whether I stopping working before 6 months, or wait until over 6 months, I'll be taxed the same?
 
#7
Thanks a lot for your response! So essentially you're saying that whether I stopping working before 6 months, or wait until over 6 months, I'll be taxed the same?
I'm saying that if you are working legally and your employer is deducting income tax correctly then you are meeting all your obligations to Argentina and can leave whenever you choose without hindrance by the state. By the way, I'm still not an accountant.

I'm sorry about your family circumstances: I hope everything works out for the best.
 
#8
This really helps a lot, much clearer now. Do I still need to file declarations for informative purposes before June 30 or is that not necessary? I don't want to leave the country and find out I still have paperwork to do months from now...

Thanks!
 
#9
At the moment my pay slips indicate I am being taxed 17% on my salary.
It looks like you believe you can get back your taxes paid in Argentina by declaring yourself a non-resident. This is a bit of a stretch, but let's assume it is possible.

The catch is that by declaring yourself a non-resident here, you automatically become ineligible to foreign income exclusion in the USA. So, you will have to pay taxes from this amount in the USA.

I still need to file declarations for informative purposes before June 30 ...
Whom do you want to inform? AFIP knows how much taxes you have paid.
 
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#10
This really helps a lot, much clearer now. Do I still need to file declarations for informative purposes before June 30 or is that not necessary? I don't want to leave the country and find out I still have paperwork to do months from now...

Thanks!
I am totally out of my depth here so maybe somebody who actually knows what they are talking about will chip in.

My gut feeling is that if you leave before your six months are up, that's it - although at some time in a more peaceful future you might want to check whether you could be due a refund but don't hold your breath. If your stay turns out to be more than six months then I suspect you will have been a resident for tax purposes and ought to file something somewhere. But I don't know what or where and expect you will be able to find out what you need to know from the USA. Call back in here if you think we can help.

And I'm still not an accountant.