Monotributista Invoicing for US-Based Work – Payment & Tax Questions!

[liponlegs23]

Hi, just wondering if there's anyone tax registered as a monotributista here and has invoiced for work in the US recently? I'm applying for a contract/freelance role with a US-based company, but the company wants to know how complicated it would be regarding payment/taxes. I've lived here for 18 years and I'm a monotributista, have a USD bank account and I believe I need to write a Factura E to export services, but just want to know if it's as easy as it seems or if there are other considerations I should be aware of.

Has anyone gone through this process recently? Were there any challenges with receiving payments? Also, is it better to receive USD via Western Union to my bank rather than directly into my USD account? I do have a UK PayPal and UK bank account, but as I'm a permanent resident here and not tax registered in the UK, neither of those is an option.

Any insights or advice would be greatly appreciated!

 

[liponlegs23]

P.S. The company is also looking into the tax implications of contracting someone based in Argentina (it would be a first for then) due to the fact Argentina doesn't have a tax treaty with the US. Does anyone know If you provide services and invoice a US company, if this falls under foreign source income and is exempt? They said that they would need to withhold a 30% tax otherwise. If so, do I just need to fill in a Form W-8BEN to confirm that the work is being done outside the U.S. and meets the criteria for foreign-source income?

 

[Quilombo]

Hi,

This question gets asked frequently and the answer is always the same: if you do things legit you will lose hundreds of dollars each month due to fees upon fees. The overwhelming majority of Argentines working abroad work in gris, they pay taxes, but they don't follow the regulations, which include:

- Registering as a Monotributista
- Issuing Factura E invoices within 5 days of payment (IIRC)
- Completing your bank's forms/DDJJs before initiating the transfer, otherwise it gets blocked/rejected
- Sending a SWIFT transfer from your account abroad (about $50) to your account here ($50 minimum, plus upwards of 1.5% of total amount sent over $1,000 USD)
- Account maintenance fees in both the US and here
- The first 36K USD IIRC can enter as dollars, the rest must be settled via MULC
- The legal way to get pesos from the first 36K is by selling your dollars on the MEP exchange, more fees + 1 day parking
- After the 36K limit you get the pesos at the BCRA compra rate direct deposited in to your checking account here
- If you operate in the MEP market you're excluded from various reduced fee services like water/gas/electricity

 

[liponlegs23]

Hi,

This question gets asked frequently and the answer is always the same: if you do things legit you will lose hundreds of dollars each month due to fees upon fees. The overwhelming majority of Argentines working abroad work in gris, they pay taxes, but they don't follow the regulations, which include:

- Registering as a Monotributista
- Issuing Factura E invoices within 5 days of payment (IIRC)
- Completing your bank's forms/DDJJs before initiating the transfer, otherwise it gets blocked/rejected
- Sending a SWIFT transfer from your account abroad (about $50) to your account here ($50 minimum, plus upwards of 1.5% of total amount sent over $1,000 USD)
- Account maintenance fees in both the US and here
- The first 36K USD IIRC can enter as dollars, the rest must be settled via MULC
- The legal way to get pesos from the first 36K is by selling your dollars on the MEP exchange, more fees + 1 day parking
- After the 36K limit you get the pesos at the BCRA compra rate direct deposited in to your checking account here
- If you operate in the MEP market you're excluded from various reduced fee services like water/gas/electricity

Thank you for your reply. Yes, after I posted I found a few threads on a similar line but didn't quite answer my question..The most important thing I want to find out about isthe tax implications for the US company who may possibly hire my services. I don't have a problem with the fees/taxes/paperwork here. I don't have a US bank account I've been resident here, paying monotributo and earning pesos for the past 18 years. However , it would be a first for me to work freelance with a US based company and they want to know about tax implications before taking things further. So I'm now trying to find out if the income is considered foreign-source income and therefore tax exempt so the company doesn't have to withhold 30% tax. Would you have any idea?

 

[Quilombo]

Thank you for your reply. Yes, after I posted I found a few threads on a similar line but didn't quite answer my question..The most important thing I want to find out about isthe tax implications for the US company who may possibly hire my services. I don't have a problem with the fees/taxes/paperwork here. I don't have a US bank account I've been resident here, paying monotributo and earning pesos for the past 18 years. However , it would be a first for me to work freelance with a US based company and they want to know about tax implications before taking things further. So I'm now trying to find out if the income is considered foreign-source income and therefore tax exempt so the company doesn't have to withhold 30% tax. Would you have any idea?

I'm not a lawyer/accountant here nor in the US, but I'm guessing they're hiring you as a contractor, even if you lived in the US, right? If so, then there will be no implications for them, though if you're a US citizen you'll have to figure out the tax/SS implications for yourself

 

[liponlegs23]

I'm not a lawyer/accountant here nor in the US, but I'm guessing they're hiring you as a contractor, even if you lived in the US, right? If so, then there will be no implications for them, though if you're a US citizen you'll have to figure out the tax/SS implications for yourself

Hi again, thanks for your insights in this. I'm British and have been an Argentine permanent resident for 18 years. Yes, the US based company (which is very small) would be hiring me as a contractor and I would invoice for hours worked in the month, being paid an hourly rate.

 

[Che1990]

Hi again, thanks for your insights in this. I'm British and have been an Argentine permanent resident for 18 years. Yes, the US based company (which is very small) would be hiring me as a contractor and I would invoice for hours worked in the month, being paid an hourly rate.

As far as I understand it, there's no implications for them. It's as if there were paying someone off of Upwork. Fiverr etc - they just pay your invoice like any other.

 

[lunar]

They said that they would need to withhold a 30% tax otherwise. If so, do I just need to fill in a Form W-8BEN to confirm that the work is being done outside the U.S. ...

Yes, unless you properly declare that you are not a U.S. taxpayer, they will have to withhold 30% of your earnings as taxes to stay on the safe side. Usually, you declare this by submitting Form W-8BEN to them.

Instead of explaining your situation in detail, you could simply say, 'I am not a U.S. taxpayer, so I am not subject to withholding,' and see what they suggest.

 

[liponlegs23]

Yes, unless you properly declare that you are not a U.S. taxpayer, they will have to withhold 30% of your earnings as taxes to stay on the safe side. Usually, you declare this by submitting Form W-8BEN to them.

Instead of explaining your situation in detail, you could simply say, 'I am not a U.S. taxpayer, so I am not subject to withholding,' and see what they suggest.

Thank you for your reply and advice. I'll look into the form and what the process is. Thanks again!

 

[LuckyLuke]

P.S. The company is also looking into the tax implications of contracting someone based in Argentina (it would be a first for then) due to the fact Argentina doesn't have a tax treaty with the US. Does anyone know If you provide services and invoice a US company, if this falls under foreign source income and is exempt? They said that they would need to withhold a 30% tax otherwise. If so, do I just need to fill in a Form W-8BEN to confirm that the work is being done outside the U.S. and meets the criteria for foreign-source income?

This sounds a little complicated to me. You have the following:

1) You are a UK citizen, with a UK bank account, but not registered as a UK Tax Payer
2) You have a US Bank Account and want to work for a US Company
3) You are residing in Argentina and are a permanent resident

Questions:

2) Is this the bank account you are trying to receive funds to? Are you aware of the tax implications of banking your US earnings in a US based account?

3) If you want to avoid # 2, does the payroll department of the US Company offer alternative payment options? Payments to apps? Payments to foreign accounts?