USA Govt to disclose Argentinian US bank account holders

[Rich One]

Announced on C5N that tomorrow noon Ambassador Stanley will sign an agreement with the Argentinian government agreeing to disclose the names of Argentinian citizens /companies that hold US bank accounts..!

 

[Agribotics]

Financial fracking is the only way Argentina is going to keep from running completely out of other people's money.

 

[dsp27]

Announced on C5N that tomorrow noon Ambassador Stanley will sign an agreement with the Argentinian government agreeing to disclose the names of Argentinian citizens /companies that hold US bank accounts..!

This is based on the FATCA Model 1 reciprocity agreement.
Not sure if it would have a major impact as my understanding is that the US IRS would automatically provide/dump all the data shared by US banks on the individuals self-identified as Argentine at account opening. HOWEVER, how about duel citizens of say US and ARG or even Argentines with say an Italian passport opening their account in the US as Italians? And how about accounts opened prior to 2013 before FATCA came into force?
FATCA was meant to be a one way street --- toward the US IRS. As such the information shared with the AFIP would be of poor quality. Major savvy evaders would still be able to hide their funds/
To me this whole thing is a PR and an effort yo scare people to "blanquear".

 

[Alby]

Announced on C5N that tomorrow noon Ambassador Stanley will sign an agreement with the Argentinian government agreeing to disclose the names of Argentinian citizens /companies that hold US bank accounts..!

Is it Argentine citizens, or Argentine tax residents?

 

[Stantucker]

Is it Argentine citizens, or Argentine tax residents?

I read somewhere residents. In newspaper articles they don't talk about tax residents, but they did say residents, not just Argentines.

 

[jantango]

Does that include those with dual citizenship?

 

[Quilombo]

Is it Argentine citizens, or Argentine tax residents?

I read somewhere residents. In newspaper articles they don't talk about tax residents, but they did say residents, not just Argentines.

Does that include those with dual citizenship?

Again, as always, I'm not a lawyer nor an accountant in either Argentina or the United States; all of this is from personal research:

I would model your guys' expectations on @dsp27 's comments; this sort of agreement is boilerplate tax authority info sharing between 2 states, and doesn't generally include the nuances of 3rd nation citizenship/multiple citizenships/etc.

The scope is simple: Argentine citizens who have accounts at US financial institutions that were opened with an Argentine passport and what transactions are made/assets held/etc. The IRS will look to share some or all of that info with AFIP, and that's where the IRS' responsibility generally ends, not ensuring that Argentine citizens (or residents who are US citizens) are in compliance with Argentine tax laws.

Now, even if AFIP got every single transaction every single Argentine who had an account in the US made, it is so bad at finding tax evasion with the tools it already has, that it would simply drown in this extra info, and I wouldn't be surprised if this barely changes anything beyond trying to scare people to blanquear as dsp27 said. (I will state at the end what my laymen's guess of what AFIP will be looking to do with this info)

As a reminder, it is NOT illegal to have a bank account in the United States, or any other country as an Argentine citizen or resident, but rather the illegal activity is the act of tax evasion, i.e. not declaring your assets that are subject to the Impuesto de Bienes Personales, and more specifically (and importantly for legal reasons) paying the alícuotas associated when exceeding the franchise permitted for each fiscal year.

So what does this mean?

For FY2022, according to Ámbito, the franchises are as follows:

Non taxable minimum for most assets*: $9,126,699 ARS, BCRA exchange rate, EOD on December 31st, 2022. (if today were December 31st it would be $54,668.40 USD)

Non taxable minimum for primary residence*: $45,633,495 ARS, BCRA exchange rate, EOD on December 31st, 2022. (if today were December 31st it would be $273,249.03 USD)

What assets are impacted?

According to La Nación, the following common assets are subject to the tax

Among the assets affected by the Personal Assets Tax are real estate, vehicles (they are taxed for up to 5 years after their entry into the patrimony), savings that are kept in cash (in pesos or in foreign currency), registered personal property, checking account balances, titles (deeds I believe is the more accurate translation), shares, quotas or social participations (co-operative shares if you own part of a co-op I believe), the assets of companies when operating as a sole proprietorships, credits, and assets and deposits abroad.

On the other hand, fixed-term deposits, savings account balances, individual retirement insurance accounts, cooperative membership fees, rural real estate, titles and bonds issued by the State (municipal/provincial/federal) are exempt from tax, along with negotiable obligations and shares of mutual funds that meet certain conditions established by regulations.

Does this mean my savings account in the US/UK/EU/etc. or 401K is exempt?

No, this is covered under "assets and deposits abroad", and there is a specific benefit regime in place with AFIP that exempts people who repatriate these assets to Argentina to receive a reduced, or zero alícuota for doing so.

Is my US/UK/EU/etc. house included in the $45 Million ARS franchise?

I don't believe so, but I could be wrong. As real estate is listed as an asset, and it is abroad, to me it would be covered under "assets and deposits abroad". Also, it would be hard to make the argument that it's your primary residence if you're a tax resident of Argentina.

Who do I think AFIP targeting?

The most likely targets, in my humble opinion are people in these categories. AFIP doesn't have the technology or manpower to investigate everyone who has an account abroad, so my money is on them prioritizing the following people who are most likely either evading paying their taxes at such a level it is worth investigating them, or checking that people are not committing crimes/investigating potential criminals who may hide their money in the US:

Person 1:

- Normal Argentine citizen who opened account(s) with an Argentine passport that report to AFIP that they are tax residents of Argentina and...
- Completed IRS Form 8300 (Cash transactions exceeding $10,000 USD)

Person 2:

- Normal Argentine citizen who opened account(s) with an Argentine passport that report to AFIP that they are tax residents of Argentina and...
- Has a mortgage/reverse mortgage in the US

Person 3:

- Normal Argentine citizen who opened account(s) with an Argentine passport that report to AFIP that they are tax residents of Argentina and...
- Has a stock portfolio, bank account balance, or other liquid assets reported to the IRS with a value exceeding 55K USD+ (not everyone, I'm assuming they'd start with assets at 1 Million+ first then work their way down to the limit)

Person 4:

- Normal Argentine citizen who opened account(s) with an Argentine passport that report to AFIP that they are tax residents of Argentina and...
- Says they are unemployed/declares no income yet is not a recipient of any social planes and has accounts in the US

Person 5:

- Normal Argentine citizen who opened account(s) with an Argentine passport that report to AFIP that they are tax residents of Argentina and...
- Receives any social planes or subsidy from the state and has accounts in the US

Person 6:

- Normal Argentine citizen who opened account(s) with an Argentine passport that report to AFIP that they are tax residents of Argentina and...
- Are in the top 10% of income earners in Argentina, including the famous, locally wealthy/generationally wealthy Argentines, etc. who likely have cash hidden abroad

Person 7:

- Normal Argentine citizen who opened account(s) with an Argentine passport that report to AFIP that they are tax residents of Argentina and...
- Are assumed to be a member of a criminal enterprise such as drug/human traffickers, are politically exposed people such as intelligence service employees or consular officials, and the employees of AFIP/Aduana/airline pilots/flight attendants/port authority workers (i.e. people that could facilitate illegal activities and are being paid off in the US)

Conclusion

Nothing legally has changed compared to FY2021; if you exceeded the non-taxable thresholds in FY2021 but didn't worry because Argentina didn't have an IRS/AFIP treaty, I would look to meet with an accountant to see what your options are, especially if you're an Argentine who used their Argentine documents to open account.

For Americans/others with accounts in the US, or Argentines who used an Italian or Spanish passport to open account there, again, legally your requirements have not changed, but you're possibly not even on AFIP's radar/won't be included in the reporting. Again, this doesn't mean you're home free if you've got over 55K in cash/stocks/gold/etc. in the US or any other country, it just means it's likely still not worth the effort to build a case against you for tax evasion.

My recommendation, as always, is to speak with a local Argentina accountant who has been licensed and accredited according to the province in which they operate (in CABA, this is mainly Consejo) and a lawyer who can guide you through the different schemes that exist to legally whitewash your assets if you are concerned about your creative accounting (or lack thereof).

 

[antipodean]

Why would Argentina focus on citizens when it has many citizens domiciled abroad?
Argentina’s taxation is based on residency, not citizenship (unlike the US…) and most US IRS forms I have encountered (as a non-US person) for non-resident tax payers ask what country you are a tax resident (in addition to what passports, plural, you hold) so reporting based on residency would be just as easy in terms of access to that information….

 

[D.B. Cooper]

Does that include those with dual citizenship?

I think this only applies to Argentine citizens who have bank accounts in the US.
If you're an American with a bank account in the US, Argentina can't touch it.
Even if you have dual citizenship.

 

[Alby]

I think this only applies to Argentine citizens who have bank accounts in the US.
If you're an American with a bank account in the US, Argentina can't touch it.
Even if you have dual citizenship.

That seems to be the nub of the issue: does this agreement only reveal information about Argentine citizens, or about Argentine tax residents? If the latter, then if you're an American who is tax resident in Argentina, surely they can use (if they choose to) any information they receive as a result of this agreement to demand any tax that information shows you owe.