Visa Rentista and the need for pesification

[gringoexpress]

Hi Bajo,

I have been following your posts regarding similar comments of yours regarding legal residence not being required for citizenship. I’ve also read through your entire website and while I can certainly see there is a legal way of navigating citizenship this route by retaining a lawyer such as yourself, I find myself in a situation where I want to stack the odds in my favor of the fastest/most guaranteed path to citizenship.

That said, I will still be needing to retain a lawyer as my Spanish is not good and I have some specific situations with my scenario. I have ample liquid funds however no true passive income. I have been reading a strategy would be to create an irrevocable trust and funding it with 30k USD to more than cover the passive income requirement. That said, others have mentioned migraciones want to ideally see passive income from property or other non liquid investment.

Bottom line is I have an intention to renounce my US citizenship after acquiring Argentinian citizenship and St. Kitts citizenship. Time is of the essence for me as I have a unique situation with a company selling in the next few years which I do not want to be a US citizen for obvious reasons when that investment matures and distributions are made to me.

Please correct me if I am wrong…. My thoughts to stack the likliehood of swiftest and most probable chance of citizenship being granted in the fastest time with the information I provided, going for a rentista residency would be a prudent course of action. If my application is denied for whatever reason, does this severely or ultimately destroy my chances of obtaining citizenship?

Once again, I would like to retain a lawyer regardless and have made contact with your office but my hope is you stumble across this message and provide any input at all that could help steer me in the best direction with the goal of successfully acquiring citizenship without uncertainties.

I was actually in damn near the exact same situation. After getting my St.Kitts passport, I was a bit reluctant to renounce US citizenship in case I actually had to go live in St. Kitts (the place ain't very big.) I ended up getting citizenship somewhere else entirely a few months ago thanks to a surprise change in their citizenship by descent legislation, but before that happened I was living in Argentina and on track to get Argentinian citizenship. I'm back in Argentina now because I don't want to actually live in the other country, but I would suggest that you may want to realize this gain after renouncing US citizenship but before actually getting Argentinian citizenship, because Argentina will tax you too if you have citizenship and are living here. They do not, however, tax tourists or people living here who do not have residence or citizenship as I understand.

The ideal time to realize your gain would be after getting the Kitts passport and renouncing US citizenship, but before actually getting Argentinian citizenship. You can be living in Argentina and in the process of *applying for* citizenship, which, as I understand, gives you the right to not get denied entry at the border and also means you can't be deported. Talk to bajo_cero about this. Once your Argentina citizenship comes through you become a tax resident, which will probably hurt more than being a US citizen. If you get permanent residency in Argentina, that also makes you a tax resident, which is what you're trying to avoid. If you realize the gain before you are an Argentina tax resident, you don't owe Argentina taxes. If you have permanent residence or citizenship, you get to pay taxes on the gain to Argentina and may end up making things worse for yourself.

If you haven't done the kitts thing yet, they either recently doubled the price or are going to very soon. The US consulate in Porto Alegre has renunciation appointments wide open if you cant get one here. Good luck.

 

[expatagonia]

Hi Bajo,

I have been following your posts regarding similar comments of yours regarding legal residence not being required for citizenship. I’ve also read through your entire website and while I can certainly see there is a legal way of navigating citizenship this route by retaining a lawyer such as yourself, I find myself in a situation where I want to stack the odds in my favor of the fastest/most guaranteed path to citizenship.

That said, I will still be needing to retain a lawyer as my Spanish is not good and I have some specific situations with my scenario. I have ample liquid funds however no true passive income. I have been reading a strategy would be to create an irrevocable trust and funding it with 30k USD to more than cover the passive income requirement. That said, others have mentioned migraciones want to ideally see passive income from property or other non liquid investment.

Bottom line is I have an intention to renounce my US citizenship after acquiring Argentinian citizenship and St. Kitts citizenship. Time is of the essence for me as I have a unique situation with a company selling in the next few years which I do not want to be a US citizen for obvious reasons when that investment matures and distributions are made to me.

Please correct me if I am wrong…. My thoughts to stack the likliehood of swiftest and most probable chance of citizenship being granted in the fastest time with the information I provided, going for a rentista residency would be a prudent course of action. If my application is denied for whatever reason, does this severely or ultimately destroy my chances of obtaining citizenship?

Once again, I would like to retain a lawyer regardless and have made contact with your office but my hope is you stumble across this message and provide any input at all that could help steer me in the best direction with the goal of successfully acquiring citizenship without uncertainties.

It seems that staying a temporary resident in Argentina would be the best option taxwise. According to the attorney interviewed in the video below (Gabriel Celano), if a temporary resident stays less than 9 mo/yr, they won't become a tax resident (while citizens and permanent residents would need to stay less than 90 days/yr to avoid tax residency):

Will probably speak with that attorney as well as a couple others to confirm this info, as it doesn't seem to be very common knowledge. I've found other places online that say that one wouldn't become a tax resident unless present in Argentina for "12 consecutive months", and that absences/trips out of the country during those months would be considered days of "presence" in Argentina if the total of those absences were 90 days or less. Absences adding up to more than 90 days would apparently not be treated as presence in Argentina, breaking the continuous streak of time in the country. So perhaps that's where they get the "less than 9 months" guidance (12 months minus 90+ days, to ensure that you break the consecutive-month streak every year).

 

[steveinbsas]

It seems that staying a temporary resident in Argentina would be the best option taxwise. According to the attorney interviewed in the video below (Gabriel Celano), if a temporary resident stays less than 9 mo/yr, they won't become a tax resident (while citizens and permanent residents would need to stay less than 90 days/yr to avoid tax residency):

A friend of mine wanted to continue to renew his temporary residency indefinitely to avoid becomming a permanent resident, so he did not ask for the cambio de categoria on the third rernewal of his temporary residency (the first time possible for those with the visa rentista or pensionada).

On the fourth renewal, migraciones told him that his days as a temporary resident were over and that he must become a permanent resident.

The results might have been different if he had used a lawyer, but he did not.

 

[Alby]

It seems that staying a temporary resident in Argentina would be the best option taxwise. According to the attorney interviewed in the video below (Gabriel Celano), if a temporary resident stays less than 9 mo/yr, they won't become a tax resident (while citizens and permanent residents would need to stay less than 90 days/yr to avoid tax residency):

Will probably speak with that attorney as well as a couple others to confirm this info, as it doesn't seem to be very common knowledge. I've found other places online that say that one wouldn't become a tax resident unless present in Argentina for "12 consecutive months", and that absences/trips out of the country during those months would be considered days of "presence" in Argentina if the total of those absences were 90 days or less. Absences adding up to more than 90 days would apparently not be treated as presence in Argentina, breaking the continuous streak of time in the country. So perhaps that's where they get the "less than 9 months" guidance (12 months minus 90+ days, to ensure that you break the consecutive-month streak every year).

The relevant part of the law is 119B of the Ganancias Tax Law, which says.

b) Las personas humanas de nacionalidad extranjera que hayan obtenido su residencia permanente en el país o que, sin haberla obtenido, hayan permanecido en el mismo con autorizaciones temporarias otorgadas de acuerdo con las disposiciones vigentes en materia de migraciones, durante un período de DOCE (12) meses, supuesto en el que las ausencias temporarias que se ajusten a los plazos y condiciones que al respecto establezca la reglamentación, no interrumpirán la continuidad de la permanencia. (Expresión “de existencia visible” sustituida por “humanas”, por art. 79 de la Ley N° 27.430 B.O. 29/12/2017. Vigencia: el día siguiente al de su publicación en el Boletín Oficial y surtirán efecto de conformidad con lo previsto en cada uno de los Títulos que la componen. Ver art. 86 de la Ley de referencia)

You need to find a tax accountant who knows how to interpret this. Its meaning is not clear to the lay reader. (It may be so ambiguous, that in fact, as occurs in other countries, individuals have to get AFIP itself to provide a personal tax ruling, rather than leave it up to accountants to guess the intention).

Note also the next paragraph in the law, which appears to provide a mechanism for permanent residents to apply to be considered tax-exempt. Nobody has ever mentioned this provision on this board. It would be interesting to know how it would work and in what circumstances it would apply.

No obstante lo dispuesto en el párrafo precedente, las personas que no hubieran obtenido la residencia permanente en el país y cuya estadía en el mismo obedezca a causas que no impliquen una intención de permanencia habitual, podrán acreditar las razones que la motivaron en el plazo forma y condiciones que establezca la reglamentación.

Remember also that some countries have double tax treaties with Argentina, which can help people pay tax in just one jurisdiction.

Finally, if Milei has his way, there is going to be a major shake-up of the tax arrangements in Argentina.​

 

[Bajo_cero2]

The relevant part of the law is 119B of the Ganancias Tax Law, which says.

b) Las personas humanas de nacionalidad extranjera que hayan obtenido su residencia permanente en el país o que, sin haberla obtenido, hayan permanecido en el mismo con autorizaciones temporarias otorgadas de acuerdo con las disposiciones vigentes en materia de migraciones, durante un período de DOCE (12) meses, supuesto en el que las ausencias temporarias que se ajusten a los plazos y condiciones que al respecto establezca la reglamentación, no interrumpirán la continuidad de la permanencia. (Expresión “de existencia visible” sustituida por “humanas”, por art. 79 de la Ley N° 27.430 B.O. 29/12/2017. Vigencia: el día siguiente al de su publicación en el Boletín Oficial y surtirán efecto de conformidad con lo previsto en cada uno de los Títulos que la componen. Ver art. 86 de la Ley de referencia)

You need to find a tax accountant who knows how to interpret this. Its meaning is not clear to the lay reader. (It may be so ambiguous, that in fact, as occurs in other countries, individuals have to get AFIP itself to provide a personal tax ruling, rather than leave it up to accountants to guess the intention).

Note also the next paragraph in the law, which appears to provide a mechanism for permanent residents to apply to be considered tax-exempt. Nobody has ever mentioned this provision on this board. It would be interesting to know how it would work and in what circumstances it would apply.

No obstante lo dispuesto en el párrafo precedente, las personas que no hubieran obtenido la residencia permanente en el país y cuya estadía en el mismo obedezca a causas que no impliquen una intención de permanencia habitual, podrán acreditar las razones que la motivaron en el plazo forma y condiciones que establezca la reglamentación.

Remember also that some countries have double tax treaties with Argentina, which can help people pay tax in just one jurisdiction.

Finally, if Milei has his way, there is going to be a major shake-up of the tax arrangements in Argentina.​

Art. 11 b you quote does not exist at Income Tax Law. Quote properly the law.
However, you do not need an accountant, instead, a lawyer. It close the debate with uninterrupted residency used to avoid tax being 6 months minus 1 day abroad and alike, it clarifies in favor of the continuous residency stated at art. 20 of the NC that says you are considered to be here by a law fiction even if you traveled.

This tax has nothing to do with citizenship, instead where you live (law 27.430):

As I asserted many times, the law is focus on income produced in Argentina:

 

[Manuel]

All money transfers coming from abroad and impacting into a national bank account will be "pesified", beyond the fact you have (or not) a USD bank account in Argentina opened with your AR$ bank account. Its a Central Bank regulation. Maybe, new government will change that.

 

[Alby]

Argentina.gob.ar

Portal oficial del Estado argentino. Conocé cómo hacer trámites en organismos públicos, tramitalos en línea y recibí servicios digitales y beneficios.

www.argentina.gob.ar

Art. 119 - A efectos de lo dispuesto en el segundo párrafo del artículo 1º, se consideran residentes en el país:
b) Las personas humanas de nacionalidad extranjera que hayan obtenido su residencia permanente en el país o que, sin...

 

[expatagonia]

Thanks very much for that link to the law (LEY DE IMPUESTO A LAS GANANCIAS). It looks like the “less than 9 months” guidance shared in the video above is correct. Article 119 (excerpt included below) seems to confirm that a temporary resident only becomes a tax resident after spending 12 months in Argentina, with absences that do not interrupt the continuity of that time period:

Art. 119 (Residentes)
b) Las personas humanas de nacionalidad extranjera que hayan obtenido su residencia permanente en el país o que, sin haberla obtenido, hayan permanecido en el mismo con autorizaciones temporarias otorgadas de acuerdo con las disposiciones vigentes en materia de migraciones, durante un período de DOCE (12) meses, supuesto en el que las ausencias temporarias que se ajusten a los plazos y condiciones que al respecto establezca la reglamentación, no interrumpirán la continuidad de la permanencia.

Translation:
b) Human persons of foreign nationality who have obtained permanent residence in the country or who, without having obtained it, have remained there with temporary authorizations granted in accordance with the current provisions on migration, for a period of TWELVE (12) months, a case in which temporary absences that comply with the terms and conditions established in the regulations in this regard will not interrupt the continuity of the permanence.


So the question is, what type of absence would interrupt the continuity of that 12-month period and prevent one from becoming a tax resident? I think the answer is found at the link below, which seems to confirm that absences not exceeding 90 days do not interrupt the 12-month period. This would imply that absences totaling more than 90 days would interrupt it and make you a non-tax resident for that period:

Consultas y respuestas frecuentes sobre normativa, aplicativos y sistemas de AFIP.

Preguntas frecuentes de AFIP

servicioscf.afip.gob.ar

Translation:
b) Human persons of foreign nationality who have obtained permanent residence in the country or who, without having obtained it, have remained there with temporary authorizations granted in accordance with the current provisions on migration, for a period of TWELVE (12) months.

For this purpose, it is considered that temporary absences that do not exceed 90 days, consecutive or not, within each 12-month period, do not interrupt the permanence in the country.

 

[Alby]

Good. Now go to Chapter 5, Article 30 of the 2019 Ley de solidaridad social and reactivación productiva en el marco de la emergencia publica:
http://servicios.infoleg.gob.ar/infolegInternet/anexos/330000-334999/333564/texact.htm:

Artículo 30.- Modifícase el Título VI de la ley 23.966 y sus modificatorias, del Impuesto sobre los Bienes Personales, con relación a la condición de los contribuyentes, con efectos para los períodos fiscales 2019 y siguientes, de la siguiente manera:

El sujeto del impuesto se regirá por el criterio de residencia en los términos y condiciones establecidos en los artículos 119 y siguientes de la Ley de Impuesto a las Ganancias, texto ordenado en 2019, quedando sin efecto el criterio de "domicilio".

This seems to tie tax liability for bienes personales (the assets tax) to liability to pay ganancias. If you a liable for the latter, you are then liable for the former.

(I'm not a lawyer or an accountant. These are just some of the pieces of information I've uncovered along the journey. Get professional advice.)

 

[expatagonia]

Good. Now go to Chapter 5, Article 30 of the 2019 Ley de solidaridad social and reactivación productiva en el marco de la emergencia publica:
http://servicios.infoleg.gob.ar/infolegInternet/anexos/330000-334999/333564/texact.htm:

Artículo 30.- Modifícase el Título VI de la ley 23.966 y sus modificatorias, del Impuesto sobre los Bienes Personales, con relación a la condición de los contribuyentes, con efectos para los períodos fiscales 2019 y siguientes, de la siguiente manera:

El sujeto del impuesto se regirá por el criterio de residencia en los términos y condiciones establecidos en los artículos 119 y siguientes de la Ley de Impuesto a las Ganancias, texto ordenado en 2019, quedando sin efecto el criterio de "domicilio".

This seems to tie tax liability for bienes personales (the assets tax) to liability to pay ganancias. If you a liable for the latter, you are then liable for the former.

(I'm not a lawyer or an accountant. These are just some of the pieces of information I've uncovered along the journey. Get professional advice.)

Thanks, I'll definitely consult a lawyer on all this. If my understanding is correct, someone not considered a tax resident will only pay bienes personales on assets within Argentina (for example, if they own a home there). Is that your understanding as well?