Renting a house in BA without permanent residency?

[desde_Holanda]

Hi - I just registered for this forum, although I have been reading and enjoying posts on this forum already for years. My long-term girlfriend is a resident from Argentina, I am residing and working in Holland.

My case:
I am considering renting a house full time in Argentina from someone I know very well, paying the rent by transferring money from my Dutch bank account to a bank account in the US. The plan is that my girlfriend will go to live there officially, and she will try to sell her PH in the coming years. I will be joining her a couple of months each year (in the European winter) and then do my work as hired business consultant digitally, as I am doing now from my home in Holland. Officially I will contnue to be a resident and tax payer in the Netherlands, and facturating my bills just like before in the Netherlands (who will know I work in practice for a while in Argentina, apart from my company clients? Nobody). During these months I will want to enjoy the good life in Buenos Aires, and profiting from the good exchange rate of Western Union, by way of transfering each month money from my Dutch bank account to a personal bank account (on my name) in Argentina, exchanging euros to Argentine pesos. So financially I want to keep complete financial separation from my girlfriend, to prevent bells to start ringing for here by the Argentine tax authorities, e.g she having money in Holland.

Of course there are a couple of questions.
1. For a bank account I need a DNI. As I understand, it is possible to get a DNI when staying in Argentina for (only) a few months. Does having a DNI make me taxable in Argentine, even if I only stay there a few months each year?
2. If my girlfriend would officially move to the house I rent and not (of course) pay any rent: does that link her to me and lead to any (financial/tax) consequences?
3. In the past I already have been working a couple of times from her house in Argentina. My experience is that that doesn't ring any bells. As I said in my introduction: who knows? Are there any problems to expect not having a CUI? Or other problems?
4. Anything else I need to think of that I didn't mention?

Note: part of the deal is a possibility to buy the same house in a couple of years, when my retirement plans are more clear and I might change the house in Holland for a much smaller one and using the excess money to buy that property in Argentina. Still not sure if I want to settle as a foreign owner (but not resident) or leaving the Netherlands (for more than 6 months each year I guess) and officially reside in Argentina then, and pay income tax etc there. My impression now is that it would be better to stay taxable in the Netherlands.
5. If I would own a house in Argentina but just stay there a couple of months each year, would my assets in Hollland be considered as foreign, and would I need to start paying tax on those?

As you see loads of questions. I don't expect all of them to be answered (probably will need a tax consultant) but nevertheless: all answers and perspectives are welcome!

 

[antipodean]

Welcome.
1. Having a DNI has nothing to do with tax obligations. Tax residency and liability on your circumstances such as time spent in Argentina.
2. Sounds like a question for an accountant, but can’t think of any reason why it would. Many Argentines live for free in houses they don’t own.
3. You go on vacation to the Maldives or Malta and turn on your computer and fire off a work email like hundereds of thousands of tourists do in practice - does that mean you need to worry about paying tax in the Maldives or Malta? Don’t overthink things.
4. You will almost always need to pay tax on any assets or income derived here. Non-residents don’t Pay tax on offshore income or assets. Once you become a resident for tax purposes in Argentina of course you are liable to global wealth and income tax - so that means your house in Holland too. You should really talk to someone at an international accounting firm like PwC or KPMG to assess your future tax plans as there are really too many details to consider in both countries and possibly tax relief such as DTAs etc - it simply might not be that bad to move here full time and pay taxes here once you retire, but that’s for a paid professional to tell you specific to your situation.

 

[steveinbsas]

As I understand, it is possible to get a DNI when staying in Argentina for (only) a few months.

Does having a DNI make me taxable in Argentine, even if I only stay there a few months each year?

Where did you get this information? Did you read something about the proposed "digiat nomad" visa that inidcated this is posible or was it something else?

DNI's are issiued AFTER temporary residency is granted and you have to stay in Argentina more than six months each year in order to renew it-

That would make your income and worldwide assets taxable in Argentina.

You can be in Argentina on 90 day tourist visa and extend that visa by 90 days EVERY YEAR and NOT be "taxable" in Argentina.

PS: In spite of the "legal liability" that is ever present, I am reasonably "certain" that there have been many expats who have lived in Argentina year round (with temporary residency and a DNI and a bank account) for several years (if not longer) who never registered with AFIP and never paid taxes on their foreign income or foreign asests while living here.

 

[steveinbsas]

During these months I will want to enjoy the good life in Buenos Aires, and profiting from the good exchange rate of Western Union, by way of transfering each month money from my Dutch bank account to a personal bank account (on my name) in Argentina, exchanging euros to Argentine pesos.

You can still use Western Union without an Argentine bank account and pick up the cash in person. It's not as convenient as having an Argentine bank acount with a debit and credit card, but you can transfer as much as you need while here as a tourist without any tax issues.

Given the rapidly changing exchange rate I only transfer (always by Western Union) as much as I need on a monthly basis to pay the previous month's credit card purchases. I am very happy to have an Argentine bank account with both a credit and debit card, yet I never have to use an ATM or set foot in the bank or go to a Western Union pick up location (I get cash at the grocery store and/or at the gas station).

 

[desde_Holanda]

Where did you get this information? Did you read something about the proposed "digiat nomad" visa that inidcated this is posible or was it something else?

DNI's are issiued AFTER temporary residency is granted and you have to stay in Argentina more than six months each year in order to renew it-

Thanks Steve. Ok, the last bit you said I hadn't read before. I just understood that temporary residency would make a DNI possible. And since I plan to stay each year a couple of month....

I didn't know about the 'digital nomad' visa until you wrote about it. Just googled it and read that it seems to be a new development. I need to have a closer look: most important for me is to stay on the safe side, which means that I prefer to be seen as someone who rents a house fulltime but stays there just a couple of months a year as a 'tourist'. Sounds economically inefficient I realize, so that situation alone might raise questions.

 

[desde_Holanda]

Non-residents don’t Pay tax on offshore income or assets. Once you become a resident for tax purposes in Argentina of course you are liable to global wealth and income tax - so that means your house in Holland too.

Thanks. Sounds like all is ok as long as I am staying not more than 6 months so I don't become a resident. This global wealth and income tax situation, that's what i want to avoid.

 

[Cosme]

Hi, You can easily fly under the internal revenue service (AFIP) radar provided that you (basically) don`t spend too much money that comes from traceable sources like local credit cards, bank accounts, etc. This means that you have to use mainly cash.
.... BUT these guys are narrowing the circle in order to prevent people from doing so: for this reason, you have to declare your ID number even when you make a purchase exceeding XXXX (may be 100 U$) at the supermarket.
Historically rentals were private businesses between two parties (tenant and renter), but since March 2021, these contracts must be declared to AFIP .... and what you pay for your rent must be somehow reasonably correlated to your incomes.
Without a taxpayer number, called CUIT you will not be able to register the rental contract at AFIP.

So IMHO, the best option for your case (in submarine terms) is "surfacing" : an accountant can inscribe you in AFIP in a type of simplified tax called Monotributo. This tax is for self employed people. According to your declared incomes you will be in any of the categories from A to F, being the latter the highest. If you declare incomes to put you in a D or E zone you will pay taxes for about 5000$ .... which is less than 40 U$ a month: not too bad for receiving a CUIT number that will get you into a gray zone! (not completely white nor completely black)

 

[steveinbsas]

As desde Holanda already noted, he can't get a bank account without a DNI, so he won't raise any red flags by using a local credit card he won't have.

I don't think he can register with AFIP in any category in order to register the long term rental contract without having at least a precaria for temporary residency. I think fhat would allow him to get a CUIT.

If I understand correctly, someone with a tourist visa can only (legally) be a party to a short term rental contract and anyone here on a tourist visa should not appear on AFIP's radar, even if they are working with foreign clients while they are in Argentina.

It makes sense (at least toe) for the Argentinr woman who is actually going to tbe living in the apartment to be named on the lease and I don't believe she would have any tax liability if her boyfriend is paying the rent from Holland.

In my opinion, the owner of the apartment is the only one with obvious tax obligations I'm Argentina, at least on the amount declared on the lease, even if he received the funds in the US. He may also have tax liability there unless his US income is very low.

It looks to me that the owner of the apartment is taking all of the risk here if the woman who is going to live in the apartment doesn't provide a guarantee. If all he needs is desde Holland's promise to pay the rent, then that's as close to a guarantee he will get.

 

[antipodean]

If someone doesn’t qualify for a DNI + CUIL/T then any foreigner can get a tax ID number called a CDI. For example non-resident foreigners purchasing a vacation home or shares in a local company in Argentina would use this number, so imagine it’s the same for a foreigner renting a holiday home here.
If one is not a resident here then it honestly doesn’t matter if you’re on AFIPs “radar” or not - your liabilities don’t change.

 

[steveinbsas]

I got a CDI during the first six months I was in Argentina. I was buying an appointment while I still had a tourist visa (actually a 90 day extension of the original vida/entry permit). I don't believe even now it is necessary to have a CDI to sign a short term rental, but that doesn't appear to be what desde Holland's wants to do and I wonder if having a CDI is sufficient to register a long term (now three year?) rental contract.

I don't know if current law requires permanent residency to register a long term rental contract as the title of this thread implies. I don't know if permanent residency is now required to open a bank account, but a CUIT/CUIL is, and I believe that means having at the least a precaria for temporary residency.

I've never heard of anyone with a tourist visa registering with ÀFIP as a Monotributo, with or without a CDI. As long a desde Holanda stays in Argentina less than 180 days of any 365 day period, he will have no tax liability here. That's the one goal of three he can most easily achieve.