Taxation Of Overseas Income For Argentinian Citizens.

[khairyexpat]

Chaya, I`ve got the perfect plan for you:

1. Take up Canadian Citizenship.​

2. Renounce your Australian Citizenship.​

3. Take up legal residency in one of the tax haven countries.​

This works as follows:
As a Non-Resident Canadian, your tax obligation is on Canadian earned income ONLY.
You have ZERO obligation to CRA on your Non-Canadian World Income (in your case, ALL your USA Income ... sky is the limit).
Your tax haven residence country will welcome you with ZERO tax.

NOT A PENNY in taxes ... all perfectly legal !!!
(never mind double and triple taxation)

What`d you say ... eh?

N.B.;
If as a Non-Resident Australian you have ZERO tax obligation on Non-Australian World Income, then skip steps 1 and 2.
Only step 3 applies.

For Tax purposes:
Resident = more than 183 day/year in Canada.
CRA Obligation = World Income.
Deemed Resident = Less than 183 days/year in Canada + Working for the government abroad + have residential ties.
CRA Obligation = World Income.
Deemed Non-Resident = Deemed resident + have no residential ties.
CRA Obligation = ONLY Canadian earned Income.
Non-Resident = Resident in other country more than 183 days/year + have no residential ties.
CRA Obligation = ONLY Canadian earned Income.

 

[TrevorCito]

There is a great deal of speculation on this board. See a tax expert who has knowledge of your situation, preferably someone who knows how things work in Argentina.

Agreed.

What I'm about to share with you is difficult to find, even from a so called tax experts as the majority, 99.9%, only deal with domestic tax issues and not complex international tax treaty issues. A lot of what I'm about to share is in relation to Argentina and Australia so if you're not longer a resident of Australia then the tax treaty points below may not be relevant to you.

The following might help

- Immigration residency is not the same as residency for tax purposes so when the term 'residency' is used it the context of tax, it usually has very little to do with your immigration residency status from the perspective of AFIP, IRS and the ATO.

- The time you spend in Australia (183 days and a long host of other factors) each year determine whether the ATO deems you to be a resident for tax purposes in Australia. From an ATO perspective, your ties to the country also count towards tax residency... do you own a home, do you have children there, are you a member of a club or association, are you an employee and do you have a business. You may actually still be a resident for tax purposes even though you're out of the country.

- The rules (duration in country each year) for tax residency in Argentina are different to Australia. (I read it a few months back on the AFIP website and made a mental note but can't find it now)

- Australia and Argentina have a tax treaty but they do not have a data sharing agreement in place

- Australia and the USA have a tax treaty and have a data sharing agreement in place

- The USA and Argentina do not have a tax treaty in place.


Here are the treaties, for those interested in the treaties between Australia and Argentina.

ATO tax treaty with Argentina - http://www.austlii.e...es/1999/36.html
AFIP tax treat with Australia - http://www.mecon.gov...n Australia.pdf

These two documents will tell you EVERYTHING you need to know about the tax arrangement between Australia and Argentina. These treaties trump local tax law. What this means is that if a local law conflicts with the treaty, the the treaty wins.

If there is no tax treaty, then local laws prevail which means that if you are required to pay tax in the USA and in Argentina then you might be required to pay tax twice.... yes, a definite problem.

I hope this helps.


I strongly advise against getting Argentine citizenship and that you maintain your PM.... what's the upside?

 

[Girino]

- The time you spend in Australia (183 days and a long host of other factors) each year determine whether the ATO deems you to be a resident for tax purposes in Australia. From an ATO perspective, your ties to the country also count towards tax residency... do you own a home, do you have children there, are you a member of a club or association, are you an employee and do you have a business. You may actually still be a resident for tax purposes even though you're out of the country.

Also my country applies this kind of philosophy and actually defined different kind of residency: your fiscal residency and your physical (civil) residency. For example, if you have kids enrolled in school back home, or if you own a property or a business back home, you are still considered a resident of your home country even if you spend most of the year abroad.
Has Australia in place a scheme where their citizen must report where they are physically located?

 

[TrevorCito]

Also my country applies this kind of philosophy and actually defined different kind of residency: your fiscal residency and your physical (civil) residency. For example, if you have kids enrolled in school back home, or if you own a property or a business back home, you are still considered a resident of your home country even if you spend most of the year abroad.
Has Australia in place a scheme where their citizen must report where they are physically located?

No, Australians are not obligated by law to report where they're physically located. Leaving the country creates an immigration event when the traveller fills out an immigration declaration card and answer questions such as 'are you leaving Australia permanently?'. Immigration shares the card with the ATO, electronically, and the ATO may refer to the scanned data evaluate your status.

In Australia, you file your tax return as your 'final' one and this indicates to the ATO that you no longer consider yourself taxable. If you don't do this, the ATO will assume that you have not filed a tax return (obligatory each year for income over certain thresholds) and will begin to investigate why.

If you're overseas, you must update your Australian bank account addresses because that's a key indicator used to 'detect' inconsistencies.

 

[Chaya]

Great information everyone. Thank you all. While being an Australian Citizen I've been out of the country for over 15 years without returning. I'm a permanent resident of the United States. Looks like I shouldn't become an Argentinian Citizen nor should I stay cumulatively more than 6 months in a calendar year. Shame because the local economy is going to miss my spending along with the airlines that would see me coming and going.

Another case of Argentina chasing away people with money.

 

[Pensador]

That's one of the things about Argentina that really burns me. I would pay huge taxes for a terrible infrastructure that I found almost incapable of really supporting my business and work activities consistently. Power outages, bad internet and the list goes on but pay away on you international income.

 

[Chaya]

Just another point. I was going to buy land and build another vacation home in Patagonia. That's not going to happen now. I'll just have to wait till Argentina and the USA have a tax treaty. Otherwise I'll go and buy something in the Caribbean. Again thanks everyone for your comments.

 

[khairyexpat]

If you take Canadian Residency you will not be subject to double taxation in Argentina.
Argentina ALONE, is not a factor by itself.

This is like the other thread "It`s Too Expensive Here" ... explaining why the peso is up.
None of the replies ever mentioned the other side of the equation: ..... the Dollar has been down for a while .... hellooooooo !!!!!!!

Half information is never correct info !!!!!!

If I were in your situation, I would rather be resident of one of the few tax haven countries, NOT A PENNY on World Income.
( Taxation, Double Taxation and Triple Taxation ..... why put up with any of this)
Why not ? .... Perfectly legal.

 

[Somewhereinba]

If you take Canadian Residency you will not be subject to double taxation in Argentina.
Argentina ALONE, is not a factor by itself.

This is like the other thread "It`s Too Expensive Here" ... explaining why the peso is up.
None of the replies ever mentioned the other side of the equation: ..... the Dollar has been down for a while .... hellooooooo !!!!!!!

Half information is never correct info !!!!!!

If I were in your situation, I would rather be resident of one of the few tax haven countries, NOT A PENNY on World Income.
( Taxation, Double Taxation and Triple Taxation ..... why put up with any of this)
Why not ? .... Perfectly legal.

How do you become a resident of a tax haven without living there?

Also would love to get clarification about taxation for those who spend more than 6 months out of the country but still hold Argentina residency card.

 

[khairyexpat]

1st we must agree that Arg. Res. (let alone citizenship), wouldn`t make any sense tax wise for the OP situation.

How do you become a resident of a tax haven without living there?

If I have Perm. Residency in a tax haven country, the world is my oyster for 2 years - 1 day.
Every 2 years - 1 day I show up for 1 day to renew my residency, and off I go again.

Sovereign nations dictate their own laws any way they wish, but very often their respective laws have many common similarities.

Also would love to get clarification about taxation for those who spend more than 6 months out of the country but still hold Argentina residency card.

The 183 rule in Argentina may be similar to its counterpart in Canada.
http://baexpats.org/..._30#entry330227

i.e.
You will be deemed resident ONLY IF you are working for the Arg. Gov. abroad + maintain ties with Argentina.
OTHERWISE
You are deemed non-resident if you maintain no ties with Argentina.

USA non-residents are liable on World Income (ONLY 100K or so is exempt) .
Non-resident Canadians are ONLY obligated on Canadian earned Income. (non-Canadian World Income exempt .... sky is the limit)