Where to start learning about taxes/Pensionado visa?

[USAtoBA]

Hi friends, my first Forum post. I'm looking to retire to Buenos Aires next year. I've already done a little bit of homework on line. I know that the ultimate answer is going to be to talk to an accountant here in Buenos Aires, but I just wanted to start getting my feet wet and I like to do as much research as possible before sitting down with a professional accountant.

I would be moving down here with a USA government pension, as well as still owning property in the USA, and various retirement accounts. I'm trying to figure out the wealth tax and how that all works.

Then as far as the Visa itself, I'm wondering if I can do that before I leave the United States? I also have dual citizenship with Italy, would there be any advantage to moving to Argentina as an Italian citizen instead of a USA citizen? The dive into Italian taxes and talking with accountants there brought me more towards this hemisphere!

Anyway, I probably could have a hundred more questions, but if you made it this far, I really appreciate you reading this and any insight is appreciated.

 

[redlobster]

... I'm looking to retire to Buenos Aires next year. I've already done a little bit of homework on line. I know that the ultimate answer is going to be to talk to an accountant here in Buenos Aires ...

You may want to start with the basics and find out which government office actually grants visas.

 

[steveinbsas]

I also have dual citizenship with Italy, would there be any advantage to moving to Argentina as an Italian citizen instead of a USA citizen?

I just asked Google which is easier and recieved this reply in s few seconds:

"It id significantly easier to enter and reside in Argentina with Italian citizenship because the Italian passport allows for visa-free entry into Argentina, while a U.S. passport generally requires a visa for extended stays or residency purposes. Holding Italian citizenship also grants additional benefits,
such as easier long-term settlement and the possibility of applying for Argentine citizenship by naturalization more quickly.
Advantages of Italian Citizenship
Visa-free Entry and Residence:

As an Italian citizen, you can typically enter Argentina without a visa and stay for an extended period, and even apply for residency more easily compared to a U.S. citizen.

Streamlined Integration:
Argentina has a long historical connection to Italy and a large Italian-Argentine population, making the integration process smoother for Italian citizens.

EU Benefits:
As an EU citizen, your Italian passport grants you the right to live and work in any EU member state, offering additional flexibility and opportunities beyond Argentina.

Challenges for U.S. Citizens

Visa Requirements:
U.S. citizens are generally required to obtain a visa or residency permit to live in Argentina for more than 90 days.
Longer Naturalization Process:

The process for a U.S. citizen to become an Argentine citizen is typically longer and more complex than it is for Italian citizens.
Bureaucratic Hurdles:

U.S. citizens may encounter more paperwork and bureaucratic hurdles when applying for residency or citizenship in Argentina compared to their Italian counterparts.

Conclusion
For entering and residing in Argentina, holding Italian citizenship is much more advantageous due to visa-free entry and a streamlined process for long-term settlement.
For long-term integration and naturalization
, Italian citizenship offers a distinct advantage by leveraging existing ties and the ease of the EU passport system."

 

[Alby]

On tax, wishing to do your homework is wise and commendable:

1) This is what (in effect) the ganancias (income tax) law currently says:

• You will become a tax resident of Argentina once you have completed 12 months as a temporary resident “visa” holder (unless you stayed outside Argentina for 90 days during the 365 days), i.e., once the National Migration Directorate issues you a temporary residency (in the category of "pensionista" in your case) and a national identity document, the clock towards tax residency starts to tick.
• Once a tax resident, you will pay ganancias (income tax) on your income if your income (including your pension and any other investment income you may have) is over the minimum threshold (currently around 2,400,000 pesos per month for a single person, but the government indexes the number upwards to keep pace with inflation and other considerations).
• If you have stayed out of the country for 90 days in each of the three years of your National Migration Directorate-issued temporary pensionista residency and thereby avoided becoming a tax resident, once you become a permanent resident (i.e., from the fourth year), you are now a tax resident regardless of how much time you spend outside the country in any given year. (Mind you, having gained tax residency, you can lose it by subsequently spending less than 90 days in a 365-day period inside the country.)

2) This is what (in effect) the 2019 law on solidaridad social y reactivación productiva en el marco de la emergencia pública says about bienes personales (the wealth tax).

• If you are a tax resident under the ganancias (income tax) law, you are also liable to pay bienes personales (the wealth tax) on your worldwide assets.

The bienes personales (wealth tax) rate is falling toward zero under the current government (and the asset value threshold at which it kicks in is rising). The asset value is a snapshot taken on 31 December of each year. The current rate is 1.25% for 31 December 2024, dropping in each of the next three years to settle at 0.25% for 31 December 2027 (if the current government survives). If the opposition returns, either before or after the 2027 election, the rate may well rise again (and the threshold fall), perhaps even as high as the 2.25% rate during the Fernandez government.

The bottom line:

You can delay becoming a tax resident and thus delay paying income tax on your pension and other income, as well as the wealth tax on your worldwide assets, by staying outside Argentina for at least 90 days in each of the three years of your temporary residency. Or, if you don't stay out of the country for 90 days in the first 365 days, you are a tax resident from day 366 of your stay here. However, even if you play the 90-day game for the first three years, once you hit permanent residency (the fourth year of your Argentina retirement adventure), you unavoidably are a tax resident and thus liable (to the extent your income and assets are over the respective thresholds) to both income tax and the wealth tax.

And yes, you will need the services of a professional tax accountant (I'm not one, but I can read legislation and also paid a professional to get the above advice) to confirm the facts as I have summarized them and that they are still current (the government is talking about a comprehensive tax reform bill, but that may never come given the currently political and economic instability). And to get a feel for the extent to which you could get away with not registering for or paying either tax, and how comfortable you would be with doing so.

 

[USAtoBA]

Great start all, thank you so much!

 

[mageesa]

On tax, wishing to do your homework is wise and commendable:

1) This is what (in effect) the ganancias (income tax) law currently says:

• You will become a tax resident of Argentina once you have completed 12 months as a temporary resident “visa” holder (unless you stayed outside Argentina for 90 days during the 365 days), i.e., once the National Migration Directorate issues you a temporary residency (in the category of "pensionista" in your case) and a national identity document, the clock towards tax residency starts to tick.
• Once a tax resident, you will pay ganancias (income tax) on your income if your income (including your pension and any other investment income you may have) is over the minimum threshold (currently around 2,400,000 pesos per month for a single person, but the government indexes the number upwards to keep pace with inflation and other considerations).
• If you have stayed out of the country for 90 days in each of the three years of your National Migration Directorate-issued temporary pensionista residency and thereby avoided becoming a tax resident, once you become a permanent resident (i.e., from the fourth year), you are now a tax resident regardless of how much time you spend outside the country in any given year. (Mind you, having gained tax residency, you can lose it by subsequently spending less than 90 days in a 365-day period inside the country.)

2) This is what (in effect) the 2019 law on solidaridad social y reactivación productiva en el marco de la emergencia pública says about bienes personales (the wealth tax).

• If you are a tax resident under the ganancias (income tax) law, you are also liable to pay bienes personales (the wealth tax) on your worldwide assets.

The bienes personales (wealth tax) rate is falling toward zero under the current government (and the asset value threshold at which it kicks in is rising). The asset value is a snapshot taken on 31 December of each year. The current rate is 1.25% for 31 December 2024, dropping in each of the next three years to settle at 0.25% for 31 December 2027 (if the current government survives). If the opposition returns, either before or after the 2027 election, the rate may well rise again (and the threshold fall), perhaps even as high as the 2.25% rate during the Fernandez government.

The bottom line:

You can delay becoming a tax resident and thus delay paying income tax on your pension and other income, as well as the wealth tax on your worldwide assets, by staying outside Argentina for at least 90 days in each of the three years of your temporary residency. Or, if you don't stay out of the country for 90 days in the first 365 days, you are a tax resident from day 366 of your stay here. However, even if you play the 90-day game for the first three years, once you hit permanent residency (the fourth year of your Argentina retirement adventure), you unavoidably are a tax resident and thus liable (to the extent your income and assets are over the respective thresholds) to both income tax and the wealth tax.

And yes, you will need the services of a professional tax accountant (I'm not one, but I can read legislation and also paid a professional to get the above advice) to confirm the facts as I have summarized them and that they are still current (the government is talking about a comprehensive tax reform bill, but that may never come given the currently political and economic instability). And to get a feel for the extent to which you could get away with not registering for or paying either tax, and how comfortable you would be with doing so.

Just curious, did you get this from AI or another source? I've found it hard to find a definitive, up to date source on whether it's 6 months or 9 months (though I've heard the latter from an immigration attorney). Send a link!

I'm less trusting of AI generated answers than a lot of people; for instance I don't believe Italians applying for temporary status are treated any differently than those from the USA; nothing on the Argentine Government website indicates that. For example, people from the USA don't need a visa to enter, so that's not a difference (though it seems AI thinks so?).

I can see how AI "hallucinates" (jumbles facts) on the issue, because there's surely a lot of articles in the training data about how millions of people immigrated from Italy to Argentina in the past, how it's easy for Argentines to immigrate to Italy (through family connection), a lot of Argentines have family in Italy, etc.

But you can see why one might want to double-check AI for tax law.
Edit: Sorry Alby! I see now that you always format your answers in this bullet-point style, and seem to know a lot about taxes. Didn't mean to doubt you, but whenever I see 'according to AI..." it puts me in a skeptical mood.

 

[Alby]

I didnt comment on the Italy versus US part of the equation. That was Steve. But even he didn't mention he used AI.

I only commented on the part I know about, which is tax. And I didn't say AI was a source. It wasn't. The information comes from where I said it did: close reading over several years of the relevant laws and confirmation from a paid professional, who also filled in a few details that were not totally clear in the law.

 

[steveinbsas]

I can see how AI "hallucinates" (jumbles facts) on the issue, because there's surely a lot of articles in the training data about how millions of people immigrated from Italy to Argentina in the past, how it's easy for Argentines to immigrate to Italy (through family connection), a lot of Argentines have family in Italy, etc.

Alby is correct. I'm the one who asked Google if it easier to get temporary residency in Argentina as a citizen of the USA or Italy.

I can say it was easy for me to get temporary residency in 2006, as a citizen of the USA who had a stable and interruptable monthly income of about $1000USD, which I began recieveing in 2000.

Speaking OK Spanish might l9calhave been.enough, but I went to migraciones with a beautiful and very personable womam who could speak perfect Argentinian castellano , even though she was from Uruguay. She was able to interpret a couple questions about my income that I might not have otherwise been able to provide a satisfactoy answer.

Based on what she told me after the interview, the woman at migraciones assumed that she was Argentine and that we were a couple. That might have helped a little, but I undoubtedly qualified for vías either way.

 

[Alby]

I've found it hard to find a definitive, up to date source on whether it's 6 months or 9 months (though I've heard the latter from an immigration attorney). Send a link!

If here you are referring to the question of whether a foreigner can keep from falling into tax residency by staying out of the country 90 days during the 365 days of their temporary residency (or the inverse: by staying in the country for less than 9 months), it is precisely here that I had to get the tax lawyer (whose job it is to protect people from falling into tax residency or extract from tax residency those who have inadvertently fallen in) to clarify. It's unlikely there is any link to be found to a generalist source because the wording of the Ley de ganancias is so ambiguous to the lay reader (i.e., someone like me) that it really requires specialist advice.

• ARTÍCULO 116.- 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.

The lawyer said to me that the meaning of the text in bold is (in effect): stay out of the country for 90 days in the 12 months and you won't become a tax resident (at least not while your Migraciones residency is temporary (as opposed to permanent)). It seems your immigration attorney gave you the same interpretation, just presented the reverse way (do not stay in the country for more than 9 months).

(This business of how to manage time inside Argentina is an absolutely crucial threshold question for anyone wanting to live here for several years without getting caught up in tax residency. And it's a shame the law is not as clear as it might be, and we have to rely on specialists to interpret it for us. I'm just reporting what I was told by a specialist whom I paid to answer the question. Nobody else should necessarily rely on the advice I received; everybody needs to consider their own situation and get their own advice. But I'm happy to pass on the information I have.)

 

[Alby]

• ARTÍCULO 116.- 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.

The lawyer said to me that the meaning of the text in bold is (in effect): stay out of the country for 90 days in the 12 months and you won't become a tax resident (at least not while your Migraciones residency is temporary (as opposed to permanent)). It seems your immigration attorney gave you the same interpretation, just presented the reverse way (do not stay in the country for more than 9 months).

Although I didn't have access to AI at the time I received this advice (mid-2024), I do now. So, I just plugged Article 116 into Chat (the paid version) and asked it specifically the following (roughly translated) question: How many days of absence can a foreigner on a temporary residency have from Argentina to not become a tax resident?

Chat pointed out what I already knew: the wording of 116 is ambiguous and doesn't answer the question. It then offered to dig further into ACRA's regulations (to do, in effect, what I paid my adviser to do). I accepted the offer, and, after several minutes of thinking, it came back with the answer: 90 days.

So we have a case of art imitating life: a professional (paid) human opinion is subsequently validated by the machine. Again, though, I reiterate: everyone should get their own advice.