Potential Expat Inquiry Update

[Stanexpat]

Really? I was under the impression that if you earn money in Argentina, you are exempt for 80K in taxes in the US.

That assumes you are going to have earned income in another country, i.e have a job or business in another country. I doubt very few people would be moving to Argentina for this purpose. Any other income from investments on which you would use to live in Argentina is still subject to U.S. taxes.

 

[Stanexpat]

One other point on this, income taxes there are much higher than in the U.S. In Argentina incomes over $40k are taxed at 35%, in the U.S. you don't hit this threshold until your income is over $357K plus personal allowances and deductions are much higher in the U.S. Anyone moving to Argentina for lower taxes is going to have a big surprise.

 

[HotYogaTeacher]

What you are all forgetting is that to stay here, in other words to qualify for the

"full time residence abroad for a full calendar year, or live there for 330 days out of any consecutive 12 month period"

part you have to be a resident, or not return home at all during that period, which makes you subject to Argentine taxes. I agree with the poster who stated it is simply likely that people with less money can't really afford to leave right now, only the very wealthy still have the wherewithal to make a big move.

The Obama administration is not actually raising income taxes on anyone. What they are doing is allowing a temporary tax cut to the wealthiest 2% of Americans to expire. Most of these people work and can't pick up and leave the country. They also have earnings that allow them to live very full and rich lives on the money they have left after taxes. While no one wants to pay more than their fair share of taxes, what is fair is debatable. There are few Americans, VERY few, who consider any administration so heinous as to disavow their citizenship and give up on their country.

Unless you plan to leave and stay gone forever, turn in your passport (which doesn't change your citizenship status anyway) and never return, there is no escaping the tax burden on a temporary basis. The exemption in the tax law quoted above is intended to keep citizens living abroad from experiencing the burden of double taxation.

It has been my experience, being from California, that many very wealthy people are liberal democrats. The idea of the Republican party as the party that protects the hard earned wealth of the American people is a lie and a advertising ploy intended to make middle class Americans believe that the Democrats are out to keep them from climbing the ladder. The rich will be rich no matter who is in power. That has always been true, and it always will be.

Good luck trying to figure out what makes people from any country or culture pick up and move themselves thousands of miles from friends, family and all that is familiar. I believe it is a genetic tendency that has increased the health and sustainability of the human race. Without it we would have perished from the Earth years ago due to genetic deficiencies and localized threats. It is no more complicated than that. Who goes may be connected to who feels least connected to society in general at a given time, but that doesn't quite feel right to me. To me it feels as if a person reaches a point that they want to find something they can't find at home.

Truthfully, and I know this from my experience in the personal growth industry, most people don't even know themselves why they do what they do. Fascinating discussion though...

Peace~

 

[steveinbsas]

What you are all forgetting is that to stay here, in other words to qualify for the

"full time residence abroad for a full calendar year, or live there for 330 days out of any consecutive 12 month period"

part you have to be a resident, or not return home at all during that period, which makes you subject to Argentine taxes. I agree with the poster who stated it is simply likely that people with less money can't really afford to leave right now, only the very wealthy still have the wherewithal to make a big move.

Income earned in Argentina is subject to Argentine taxes, but not US taxes if you "reside" outside the US for 330 days a year (according to the information quoted).

The IRS regulations indicate you must "reside" outside the US for the 330 days to claim the exemption, but they do not specifically refer to a US citizen's legal resident status in Argentina (whether it is temporary or permanent). If you do the math, you will discover that you can go home for 35 days/five weeks a year.

It is possible to be a temporary resident in Argentina and not pay taxes in Argentina. Those temporary residents here with the visa rentista are not taxed on their US income in Argentina, but they are, of course, still subject to US taxes on their income. The income threshold for the visa rentista ($2500 pesos per month) is obviously well below the level of taxable income in the US.

Once you become a permanent resident here, however, you are subject to Argentine taxes on worldwide income, and still would be subject to tax on any (worldwide) passive income in the US as well.

 

[soulskier]

Steve, thanks for posting the law.

Stanley, as I have mentioned numerous times before, some of us actually live in Argentina full time and earn dollars here. IMO, that is the best scenario.

Not sure where you heard about the tax structure of over 40K. I am a "montribusta" and pay a very small flat tax plus a small personal wealth tax.

Lastly, along with tango, futbol, mate and standing in line, not paying taxes is the Argentine pastime. Es decir, no one claims all the earnings like in the States.

 

[Stanexpat]

Steve, thanks for posting the law.

Stanley, as I have mentioned numerous times before, some of us actually live in Argentina full time and earn dollars here. IMO, that is the best scenario.

Not sure where you heard about the tax structure of over 40K. I am a "montribusta" and pay a very small flat tax plus a small personal wealth tax.

Lastly, along with tango, futbol, mate and standing in line, not paying taxes is the Argentine pastime. Es decir, no one claims all the earnings like in the States.

I'll be glad to answer your question but first what do you mean by montribusta, there's not such word in any dictionary I have and five native Spanish in my house today and nobody knows what this means and a couple of said it's not Spanish. Perhaps it's Argentine slang, maybe something like ski-bum, let me know.

 

[steveinbsas]

I'll be glad to answer your question but first what do you mean by montribusta, there's not such word in any dictionary I have and five native Spanish in my house today and nobody knows what this means and a couple of said it's not Spanish. Perhaps it's Argentine slang, maybe something like ski-bum, let me know.

It isn't Spanish. It's castellano.

The correct spelling of the word is "monotribustia" and it is a classification for individual taxpayers in Argentina. Even if (using Google) you had entered the word as SS spelled it, you would have instantly found the appropriate link: http://www.afip.gov.ar/monotributo/

 

[Kendra]

Thanks for posting the tax info - it's true about the 80k and the self-employment tax. I got hit hard in 2007 by the U.S. self-employment tax as a freelance consultant at the time. It pays to save some money and prepare for this.

 

[Stanexpat]

Steve, thanks for posting the law.

Stanley, as I have mentioned numerous times before, some of us actually live in Argentina full time and earn dollars here. IMO, that is the best scenario.

Not sure where you heard about the tax structure of over 40K. I am a "montribusta" and pay a very small flat tax plus a small personal wealth tax.

Lastly, along with tango, futbol, mate and standing in line, not paying taxes is the Argentine pastime. Es decir, no one claims all the earnings like in the States.

This is a complicated subject and I may start a new thread to warn other expats of the potential problems they may face.

First of all your monotribustia is for basically what they call social security, its not the income tax nor is the wealth tax.

The income tax is completely separate and has been around since the thirties in Argentina. Basically non-residents have to pay on any income they earn in Argentina. Residents are expected to pay the tax on their world-wide income.

The tax rates for Argentina are significantly higher than the U.S. The top rate is 35% and kicks in at $40k and above income per year. The top rate in the U.S. is also 35% but applies only to income above $357k. On the same income your taxes in Argentina would be much higher than in the U.S.

Since you are not aware of this tax I assume you are not paying it. I would advise you to seek professional advice. Maybe people don't pay what they should in Argentina but if you are paying nothing now you are asking for big trouble.

I read the penalty for non-payment is between 50% and 100% on the taxed owed. If they decide to prosecute someone for income tax evasion in Argentina the penalty is 3 1/2 to 10 years in prison.

This is no laughing matter.

The attached link provides the best summary on taxes in Argentina I've seen.

http://www.pwc.com/us/eng/hr/argentina.pdf

 

[soulskier]

This is a complicated subject and I may start a new thread to warn other expats of the potential problems they may face.

First of all your monotribustia is for basically what they call social security, its not the income tax nor is the wealth tax.

The income tax is completely separate and has been around since the thirties in Argentina. Basically non-residents have to pay on any income they earn in Argentina. Residents are expected to pay the tax on their world-wide income.

The tax rates for Argentina are significantly higher than the U.S. The top rate is 35% and kicks in at $40k and above income per year. The top rate in the U.S. is also 35% but applies only to income above $357k. On the same income your taxes in Argentina would be much higher than in the U.S.

Since you are not aware of this tax I assume you are not paying it. I would advise you to seek professional advice. Maybe people don't pay what they should in Argentina but if you are paying nothing now you are asking for big trouble.

I read the penalty for non-payment is between 50% and 100% on the taxed owed. If they decide to prosecute someone for income tax evasion in Argentina the penalty is 3 1/2 to 10 years in prison.

This is no laughing matter.

The attached link provides the best summary on taxes in Argentina I've seen.

http://www.pwc.com/us/eng/hr/argentina.pdf

Stanley, the monotribusto I pay is my income tax. Since I rent properties as one of my sources of income, it is a flat monthly fee based upon the average amount declared of my rentals. In addition, I pay a small .75% wealth tax on my real estate, truck, etc each year, if they total 300,000 pesos or more.

Thanks for the advice to seek professional help, but it was my accountant that set me up as a monotribuio.

I have some advice for you. Why don't you stop posting about things you actually don't know about? I think it is funny that you can attach a link and are an expert on the topic. My findings come from my 4 years of actual life experiences here in Argentina. You don't even live in the country anymore, but find it necessary to always point things that aren't accurate. Surely you have better things to do with your time?