Taxes for USA Expats

[steveinbsas]

What do you mean by the question: How is the legal way you are paying less taxes?

Was curious what specifically he does to pay less taxes.

Reading between the lines, I suspect the answer is lead a simple life and not accumulate more assets than necessary. That is probably the best way to pay less tax.

I have no assets in my name in the USA and I live comfortably on my foreign "pension" income which is just below the minimum amout to pay income tax in Argentina. According to the accountant I asked in Punta Alta as well as the agent at AFIP, foreign pensions are subject to income tax in Argentina and that in Argentina the word "pension" includes funds paid to a retired individual by a government.

The only problem is that Argentine tax law changes (sometimes in a dramatic way), which can mean that the decision we take to come here based on one set of rules (that seem to favor us), can, in hindsight (after a dramatic change), appear to have been the wrong choice.

Since my arrival in May of 2006 there have been NO changes in the Argentine tax laws which have NOT worked in my favor.

I only had to pay the bienes personales on my apartment in Recoleta for three years 2006-2008 and after that the minimum amount subject to the tax was increased to a level which exceeded my assets in Argentina (and still does). There is now a huge exemption for the bienes personales if your domicile is the same as the property you own and the property which I bought in 2010 has always been appraised by ARBA for tax purposes far below its market value.

PS: When I was selling my apartment in Recoleta in 2009, I asked the accountant that was working with the escibano if what he was doing (paying the bienes personales on my behalf) was OK with AFIP, his answer was, "I am AFIP."

 

[¡Sencillamente yo!]

I have no assets in my name in the USA and I live comfortably on my foreign "pension" income which is just below the minimum amout to pay income tax in Argentina. According to the accountant I asked in Punta Alta as well as the agent at AFIP, foreign pensions are subject to income tax in Argentina and that in Argentina the word "pension" includes funds paid to a retired individual by a government.

Steven,

What is the trigger point in terms of an income amount for pensions / social security / etc ... that requires taxes be paid to the Argentine government? And, I am assuming that one pays tax on the amount ABOVE the trigger point, not on the whole amount from the bottom on up?

Please elaborate if you would,

Thanks.

 

[steveinbsas]

What is the trigger point in terms of an income amount for pensions / social security / etc ... that requires taxes be paid to the Argentine government?

I bleieve it is presently about $72.000 pesos per month, though there is a current proposal to double that amount. It had already doubled in the past couple years.

am assuming that one pays tax on the amount ABOVE the trigger point, not on the whole amount from the bottom on up?

That is my understanding (based on what I was told by my accountant and at the office of AFIP).

 

[¡Sencillamente yo!]

Thanks for the timely replies!

 

[steveinbsas]

Thanks for the timely replies!

You are most welcome!

 

[Edu R]

Hello all, I'm a lawyer but not specifically a tax lawyer so obviously consult with someone else if you're worried.

Just wanted to say that the concept of residency, at least for AFIP, is extremely broad and does not break down neatly in "X months a year". AFIP can and will apply residency if it considers your "center of life" is in Argentina, regardless of if you spend 8 months or 12 months in the country. What a "center of life" entails is up to the judge that hears your case, AFIP applies the concept extremely broadly.

AFIP is of course an extremely inefficient and obscure entity so they might ignore you for years or forever, but if they do turn their eye on on your please be aware that there's no "one weird trick" to avoiding tax residency.