New capital gains tax on property in Argentina

Whats the other solution? Continue to accumulate more debt on the citizens behalf and ignore it until it goes away? This country has been run like a shit show for decades and now things are being implemented that are required to try and establish some form of stability. It will be very painful in the beginning but long term it is required if the country is to ever develop and move forward sustainably. I feel for all Argentines who have to deal with this but they should look at the previous Goverments who have mismanaged the economy for too long.
Why do the common people have to pay for the greed of the political classes ? Its counterproductive as hell as to grow a economy you need the working and middle classes to spend money but the anti human policies of the imf cause just misery and destruction .
Why do the common people have to pay for the greed of the political classes ? Its counterproductive as hell as to grow a economy you need the working and middle classes to spend money but the anti human policies of the imf cause just misery and destruction .
Capital gains tax is pretty common in all developed countries. The issue with Argentina is most people avoid taxes because they don't see the benefit - the old chicken and the egg. This country has way bigger problems than this tax - its income taxes, business taxes, labour laws, mass corruption, overinflated government, lack of output etc. Eventually you take enough peoples money without paying it back and there are consequences - the people should be angry at the previous governments who allowed such theft. Macri stepped into a complete shit show - he has not been perfect at all - in fact should have done things very differently but at least his vision on what needs to happen is in the right direction. Argentina was very close to becoming Venezuala 2.0 with the previous Goverments policies.
You can’t fix 12 years of socialist policies without pain - the problem is that nobody is willing to take the pain necessary to get the country on a stable economic path. As a result Argentina will continue to have these terrible economic cycles. There is no quick and easy solution. Austerity isn’t pleasant - but if they stick to it, it should break the cycle. Otherwise you’ll continue to burden your children and grandchildren with unsustainable government spending.
first example that comes to my mind is landlords who insist on cash transactions for paying rent
But then the government just charges the equivalent tax on fair market rent. It assumes if the apartment had electricity service and was not the primary home of the owner, then it was being rented. It already does this in the case when a foreigner sells a property they did not occupy.
Can you please enlighten us, enumerating some of the methods used by them, which makes them the best in the business.
SO many to list and mention but I'll just list the biggest ones:

- Many employers and companies pay employees under the table as to avoid paying taxes and benefits. I'm not sure what % of the economy is in "black" but it's substantial. Much higher than other countries.

- Many companies that should be charging IVA (21%) including even lawyers, realtors, accountants, escribanos, etc. will allow you to avoid paying this IVA tax if they don't have to provide an official receipt as it benefits them as well so they don't have to declare the income and pay taxes

- Many wealthy locals have tons of assets abroad that are undeclared. Argentina has a wealth tax on WORLDWIDE assets.

- Many individuals that own their own companies don't declare any of the income. They just work for cash and don't declare any income or simply set up as Monotributu status and declare a fraction of actual earnings.

- People when selling or buying real estate use FAKE prices as to avoid both the stamp tax, property tax and then it causes them to pay less property taxes forever (or until they sell the property).

- Many locals that rent out their properties don't declare any income on their properties and therefore don't pay any income taxes on it.

- Many locals don't pay any property taxes on their properties. And there really isn't any penalties for not paying. The only people forced to pay annual property taxes are non-resident foreigners as they have to apply for a permit to sell when they sell their properties so they will pay their property taxes one way or another. Not so for locals. (In first world countries you get a property tax bill in the mail each year and failure to pay property tax results in severe penalties or possibly losing your property to the government).

Ceviche, I just meant that a very large percentage of the economy is in the "black" in Argentina. Are you trying to imply this isn't the case?? If so, it would be the first time I've actually heard of someone trying to argue that tax evasion or the "black economy" one way or another isn't a problem in Argentina because it certainly is.

Locals don't really put large amounts of money in their bank accounts as to not attract attention (plus they don't trust the banks). But much of the economy is in cash so the government can't track spending even if they wanted to. In most first world countries, it's becoming almost a cashless society with people mostly using debit and credit cards vs. having cash. I'm even starting to see restaurants that don't even accept cash which is interesting).

I'm not saying I blame locals. I'm just calling it as I see them. In the USA and most first world countries it's almost impossible to evade taxes like they do in Argentina. Plus the penalties are jail time. So no joke. In Argentina many people evade taxes because they can and there is no severe penalties. Not so in most first world countries around the world.

In first world countries, it's possible to legally lower or at least defer some taxes but it's very very difficult to evade taxes like you see in Argentina. That's my main point.

Taxes are tough and NO ONE likes paying taxes. As others mentioned, most locals don't like paying taxes because they assume it will just end up in the pockets of corrupt politicians (which is often the case - just like at CFK). But that kind of mentality is really horrible because you can't ever get any stability with that type of thinking. And you get institutionalized tax evasion which is what you see in Argentina today.

In the USA, I pay a fortune in taxes and I do hate it. But at least everything works here. Police, fire fighters, streets, parks, highways are mostly all really fantastic. Our system and society works because of this. People can argue all they want about all the problems that the USA has. But for the most part, things work really really well here due to most people paying their fair share of taxes (or at least what the law calls for).
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all well said.

the basic structure of paying taxes (and penalties for not paying) has to be functioning first. if this isn't in place then the govt and population will continue to just point fingers at each other with blame. once that exists (like in the US), then you will figure out real fast when money is disappearing into politicians' pockets.

my girlfriend's company offers her a benefit where they will pay for a monthly membership to either a gym, sport club, etc. she takes tennis lessons at two different courts here and went to the owners to ask if they could provide a receipt so she could receive the benefit from her company. one couldn't do it (they only work in cash), and the other could only give a B receipt (or something like that, don't recall exactly) because they didn't have a bank account to give the other type they initially asked for. what business doesn't have a bank account? that would be impossible in the USA.

This law is extremely unfair as clearly expressed in this excellent article . For example if you brought a property in January 2018 when the peso was 18 pesos per dollar for US$ 100,000 the deed price in pesos was 1,800,000 . Now if you sell it at the same price US$ 100,000 the deed price will be 3,650,000 pesos meaning that you have a tax liability of 15% of a gain that you did not earn . This law does not contemplate that real estate is in dollars and utilizes pesos as its model which is grossly unfair as this is a currency with huge fluctuations .

Read the article above for a clear definition of this punitive law
The class of people that own houses are generally the most politically powerful class. They now have a very strong incentive to reign in inflation. Hopefully that will create more stability for argentina.