tax for foreigners

[jeff1234]

yes montevideo is another city I can consider but need two hours ferry to argentina and the rental price is around usd 600,700 per month for an one bedroom apartment which is acceptable too . Of course i can come here by aeroplane .

Perhaps you should ask for advice on what cities might be worth exploring during your time outside Argentina given your interests and finances and schedule.

 

[Alby]

yes 183 days may become a tax resident in argentina . Actually i am from Asia Hong Kong and sold my apartment recently which is around USD 700000. Regardless of the tax here in argentina ,it is a good place to live .cheap price ,beautiful environment and weather ,very decent private health care service . But it's wealth tax will be levied once assets over ARS 2 million ,ARS is depreciating at the same time that means you need to pay a lot . So i am afraid I can only live here for 6 months a year . Now I am contacting uruguay property agent ,their rental price in colonia isn't expensive only usd 400,500 a month for an two bedrooms apartment .So I plan to reside in uruguay first then very year come to argentina as a tourist .Unless they change the tax policy .

It seems like a fairly precarious and somewhat complicated way to live long term. People do it, of course. Note, for example, that without any form of residency I don't think you would be able to take out local health insurance to access the private health system. You would have to pay the full amount every time. Or go to Uruguay and access whatever system is available there. You wouldn't be able to open a bank account as a tourist either.

Many people on this board would tell you to come as a Rentista and simply not declare your overseas assets at tax time. Some argue that the tax authorities (particularly under the present government) are only interested in wealthy Argentines who have moved assets offshore. Others argue that they have little administrative capacity to investigate foreigners. If these arguments are true, nobody has ever provided any real evidence. But they may be true. Or just wishful thinking.

Be aware, too, that the Rentista visa is almost impossible to obtain, but it can take the migration authority several years to process the application. In that time, you can take out health insurance and live freely, i.e., without any of the tax obligations, other than the wealth tax on any local property you buy.

 

[steveinbsas]

It seems like a fairly precarious and somewhat complicated way to live long term. People do it, of course. Note, for example, that without any form of residency I don't think you would be able to take out local health insurance to access the private health system. You would have to pay the full amount every time. Or go to Uruguay and access whatever system is available there. You wouldn't be able to open a bank account as a tourist either..

I enrolled in "the private health system" (Omint) with a tourist visa shortly after my arrival in Argentina. I used my passport number as I had no DNI. That was years ago but I haven't heard about any changes requiring temporary or permanent residency since then. If you pay the monthly premiums year round the covergae will not lapse and you should not have to pay more than the premiums for medical treatment in Argentina. If you are living in Uruguay, unless you have an emergecy which must be treated there, you should be able to return to Argentina for medical treatment if and when it's necesssary.

PS: If you only want to pay premiums for private coverge while you are actually living in Argentina (and have doubts about returning), you could pay for six months at a time, cancel the poilcy and re-enroll if and when you return. The major downside is that you would have to repeat the "waiting period" to get full coverage in caase of pre-existing conditions.

 

[Sequoia1321]

Are there any caveats to the 183 day rule in Argentina? This video below seems to say that the 183 day rules around the world sometimes have other ways that they might get triggered:

 

[Alby]

Are there any caveats to the 183 day rule in Argentina? This video below seems to say that the 183 day rules around the world sometimes have other ways that they might get triggered:

I haven't watched the video, but best to just keep it simple. Other than for a wealth tax on any property a foreigner in Argentina might own (a tax that probably amounts to less than the fee the accountant charges to prepare the declaration--it does in my case at least), nobody has a problem until he or she has completed 12 months as a temporary (migration) resident . At that point, most individuals (other than those on a 5-year employment contract, or those protected by a double tax treaty) become tax resident and liable for certain taxes (different taxes depending on the individual's circumstances). Nothing to do with 183 days. Once the individual has become a tax resident (i.e., once he or she has completed the 12 months (migration) residency), he or she can lose tax residency (i.e., no longer be liable for those taxes) only by leaving the country and staying away 12 months (which entails, as well, losing the migration temporary residency). Again, nothing to do with 183 days.

If a foreigner has achieved permanent residency, he or she can leave Argentina for 12 months, lose the tax residency, but still maintain the permanent residency (providing he or she doesn't stay away 24 months). Coming back between the twelve and 24th months would make that permanent resident once again liable for tax if AFIP deemed the individual's center of affairs to be Argentina, rather than the country the foreigner escaped to in order to avoid remaining a tax resident. There are a range of conditions (e.g., extent of personal relationships in Argentina, property ownership in Argentina, financial affairs in Argentina, time each year spent in Argentina) that factor into the determination of which country is one's center of affairs. Again 183 days doesn't really enter into it, because time spent in Argentina each year is only one of various conditions that AFIP would take into account if they ever got around to chasing it up.

All the foregoing is not an expert opinion but based on a reasonably close laypersons reading of what the taxation legislation says for someone who wanted to be compliant with the regime here as it currently stands.

I'm just trying to keep it simple because people seem to become worried about tax well in advance of when they need to and because the rules aren't actually that complicated. It's not a problem until we have achieved our first 12 temporary residency and then successfully extended that for a second 12 months. Like anywhere else, however, once we are a tax resident, it's impossible to extricate ourself from that status and still make Argentina home in any meaningful sense. At that one point, if we want to live here, we either non-comply (with the risks that entails) or organize our affairs to minimize the hit.

 

[Sequoia1321]

What if you get a home in Argentina and stay less than 183 days each year? Is there still a way one might be liable for income tax, for example, based under the “center of affairs” or some other rule? That’s basically what that video I posted was saying, that just staying in some countries less than 183 days might not necessarily mean that one won’t be liable for income tax.

 

[on the brink]

My accountant friend says the government doesn't keep track of the six-month limitation. So far.

 

[Alby]

What if you get a home in Argentina and stay less than 183 days each year? Is there still a way one might be liable for income tax, for example, based under the “center of affairs” or some other rule? That’s basically what that video I posted was saying, that just staying in some countries less than 183 days might not necessarily mean that one won’t be liable for income tax.

If you buy a property in Argentina, but do not obtain temporary (migrations) residency (i.e., you come in and out as a tourist throughout the year for whatever number of days you can get away with) you pay a small amount of wealth tax on the value of your property each year (everyone who owns property here has to do that, even tourists). But you will pay no other tax. You can continue to live like that indefinitely and not ever (under current legislation) become a tax resident. But it's nothing to do with the center of affairs rule. You simply never become a tax resident, because you never obtain and complete 12 months of (migrations) permanent residency, which is the trigger for tax residency.

[If at any future point you take out a 12 month temporary (migration) residency but then stay fewer than 183 days (for example, you live nomadically between Argentina and your home country) you will lose your temporary (migration) residency for not having met the 183 days migration rule--the 183 day rule is a migration status issue, not a tax status issue). You remain liable always for the small wealth tax on your property here but you have never become eligible for any other tax (because you don't complete the trigger for tax residency, which is 12 months of temporary (migrations) residency).

If you do complete 12 months temporary (migrations) residency and successfully convert that into a second 12 month (migration) residency (which you can do by staying more than 183 days during the first 12 months), you then become liable for other taxes (i.e., you become a tax resident). From that point onwards, you can only cease to be eligible for the other taxes by leaving the country and staying out 12 months--this means losing your temporary (migration) residence if you are still in the second or third year of your journey to permanent (migration) residence and having to start again (if permanent residence is your ultimate goal).

As I see it, the "center of affairs" rule only comes into play if someone is at permanent residency stage and has lost tax residency by having stayed away the 12 months and now wishes to return. As I read the legislation, such an individual could not hope to trigger the center of interests rule in his or her favor simply by counting days and making sure to not exceed 183. He or she would have to combine that tactic with a range of other tactics, for example, not establishing close personal relationships in Argentina, not maintaining a home in the other country, not owning any Argentine property (which in our example, we do in fact own), not having any Argentine business affairs, or bank accounts or other investments. If the matter ever came up for dispute with AFIP, the individual would have to show that the balance of their personal and financial affairs are conducted in the home country, not Argentina. Within that overall framework, the actual number of days spent in each country is just one element.]

 

[Sequoia1321]

If you buy a property in Argentina, but do not obtain temporary (migrations) residency (i.e., you come in and out as a tourist throughout the year for whatever number of days you can get away with) you pay a small amount of wealth tax on the value of your property each year (everyone who owns property here has to do that, even tourists). But you will pay no other tax. You can continue to live like that indefinitely and not ever (under current legislation) become a tax resident. But it's nothing to do with the center of affairs rule. You simply never become a tax resident, because you never obtain and complete 12 months of (migrations) permanent residency, which is the trigger for tax residency.

[If at any future point you take out a 12 month temporary (migration) residency but then stay fewer than 183 days (for example, you live nomadically between Argentina and your home country) you will lose your temporary (migration) residency for not having met the 183 days migration rule--the 183 day rule is a migration status issue, not a tax status issue). You remain liable always for the small wealth tax on your property here but you have never become eligible for any other tax (because you don't complete the trigger for tax residency, which is 12 months of temporary (migrations) residency).

If you do complete 12 months temporary (migrations) residency and successfully convert that into a second 12 month (migration) residency (which you can do by staying more than 183 days during the first 12 months), you then become liable for other taxes (i.e., you become a tax resident). From that point onwards, you can only cease to be eligible for the other taxes by leaving the country and staying out 12 months--this means losing your temporary (migration) residence if you are still in the second or third year of your journey to permanent (migration) residence and having to start again (if permanent residence is your ultimate goal).

As I see it, the "center of affairs" rule only comes into play if someone is at permanent residency stage and has lost tax residency by having stayed away the 12 months and now wishes to return. As I read the legislation, such an individual could not hope to trigger the center of interests rule in his or her favor simply by counting days and making sure to not exceed 183. He or she would have to combine that tactic with a range of other tactics, for example, not establishing close personal relationships in Argentina, not maintaining a home in the other country, not owning any Argentine property (which in our example, we do in fact own), not having any Argentine business affairs, or bank accounts or other investments. If the matter ever came up for dispute with AFIP, the individual would have to show that the balance of their personal and financial affairs are conducted in the home country, not Argentina. Within that overall framework, the actual number of days spent in each country is just one element.]

Thanks Alby. Very detailed post.

 

[Alby]

Note that I don't see anything in the income tax law (upon which the wealth tax also depends) specifically about "183 days". I believe it's all here:

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(Articles 119 to 125 are the most relevant.)

Article 125 in particular deals with tax residents for whom the country that is the "center of vital interests" (i.e., the combination of personal and financial relationships) cannot easily be determined. It seems to use as a tie-breaker the question of in which country the individual maintains a permanent home and (in the event the individual maintains a permanent home in both countries) talks vaguely about in which country the individual spends "most time". The law itself doesn't appear to specify how, in those complex center of vital interest cases, "most time" is calculated or over what period. We can deduce that involves counting days over a certain period, and that may well be 183 days, but if so the regulations must specify it because the law itself doesn't.

Note that the metric "center of vital interests" appears to mirror a tie-breaker in some of Argentina's double tax treaties (for those of us lucky to be covered by one), which determines one's tax residency (for those with a permanent home in both countries) on the basis of in which country the individual has the "closest personal and economic relations".

Again, none of this substitutes for professional advice. There may be much more to it than meets the eye. But until it actually becomes an issue for anyone (i.e., after 12 months of seeking, then obtaining and then maintaining temporary residency) there is no need to spend too much time working out how to one day game a system that is, in any case, continually changing.