Post Number: 1
|Posted on Monday, October 30, 2006 - 6:26 pm: |
I'm from the US looking to relocate to Argentina. The one thing that concerns me is the tax situation.
Argentina taxes worldwide income now. Their corporate taxes are fairly high as well.
They also tax bank deposits and withdrawls as well as assets WORLDWIDE.
There is also a VAT.
All this just makes it seem like the tax burden there is really too high to be appealing.
Any thoughts on this?
Post Number: 259
|Posted on Monday, October 30, 2006 - 8:10 pm: |
Hello Luke, welcome to the group,
I am not sure that Argentina taxes worldwide income. Even if they might, I have no worldwide income outside Argentina (man covers mouth and coughs, it sounds strangely like "bull s---")
Any income I don't make is in a US bank. I don't get it out of an ATM machine(yeah, go ahead and read between the lines). With the *possible exception of import tarriffs I would not bet the farm on the tax man in Argentina being all that efficient in collecting taxes.
VAT sounds strangely like bat. Who knows, I had to say something about it.
In four years of visiting Argentina I have never heard an Argentine complain about taxes.
One thing I learned a long time ago, if you pay a lot of taxes, you must be making a lot of money.
I would not worry about taxes in Argentina. Remember that Jesus said give to Ceasar what is Ceasars.
*emphasis on possible
Post Number: 10
|Posted on Monday, October 30, 2006 - 10:01 pm: |
Here is another warm welcome from me also, Luke!
We have discussed the worldwide asset (not income) tax here but this is the first I heard of any worldwide income tax. Do you mind telling us why you think Argentina taxes worldwide income?
The information I have from a Buenos Aires accountant in whom I have confidence is that Argentina does not tax income generated outside the country. Arial
Post Number: 2
|Posted on Monday, October 30, 2006 - 10:58 pm: |
The information I received came straight from the consulate themselves.
According to their websites: " Resident individuals in Argentina are liable for income tax at progressive rates on their worldwide income. Rates range from 9 to 35 percent.""
I also recently contacted the people at argentinaresidency.com because they seem to be well respected when it comes to residency issues and their website said the opposite as well (worldwide income is NOT taxed).
Upon contacting them they responded that their tax information had not been updated recently and they corrected that worldwide income is taxed.
I also came across a tax haven site while searching for the phrase "argentina taxes" and they say Argentina has been removed from their list as now worldwide income is taxed.
I also understand there is an asset tax if one buys a house or an apartment that would then apply to assets worldwide.
I also see that the banks collect taxes on deposits and withdrawls as well as a VAT.
Seems like a hefty tax burden to me.
I'm not sure what the exact tax brackets are but remember that the top bracket could be 100,000 pesos and that is only like $33,000 US. Quite a hefty tax on that amount of money if that is the case.
I don't make much, but I want to hold on to what I do.
I'm very interested in moving to Argentina and possibly buying a house or apartment after I'm sure it's right me and my family.
I wish I could get some clarification on all the conflicting information I've heard on taxes.
Post Number: 11
|Posted on Tuesday, October 31, 2006 - 7:11 am: |
I am pretty sure that all countries respect the concept of no double taxation. I know that for US taxes if you have to pay foreign taxes on income that is deductible from the US taxes you owe. I wonder if that is true of Argentina. If we receive income in the US and file and pay US taxes you are exempt from Argentine taxes to the extent of the US taxes. Of course all this begs the question if your income is entirely generated in the US how would the Argentine government know your worldwide income? As I recall to get a retirement visa you must have a monthly income of at least 1000 pesos a month transfered to an Argentine bank. I would be willing to do that monthly and pay taxes on that income. But as for the rest...how will they know what I take out of an ATM?
Post Number: 11
|Posted on Tuesday, October 31, 2006 - 9:08 am: |
Re Bill Howard's post
It is much lower than that, more like $650 or $750 a month and you do not have to have it sent to an Argentina bank. You have to produce a letter from the US bank certifying that you have that amount deposited in the bank every month or you may be able to just produce several of your bank statements showing that it is being deposited monthly.
In anything I post here it might be good to remember that this is Argentina and things can change at any time. Arial
Post Number: 260
|Posted on Tuesday, October 31, 2006 - 10:12 am: |
As you all know residency is controlled by immigration.
Taxes are controlled by the tax authority.
They are not necessarily on speaking terms.
In the US and I would assume Argentinda some of the earnings of residents or citizens of the US made overseas is taxed and some is not. There are rules. One is that you must be out of the country continuously for a certain number of months. If you are working for the US government there is no exemption.
Money brought into Argentina by an Argentine resident or citizen could be taxed. The Argentine government appears to be reasonable to me. I do not believe they would expect anyone to pay taxes on a home owned in Miami. It does not make sense.
Retirement income may be different. Who knows, on any given day a lot of people will tell you anything you want to hear just to get you to go away.
I want to keep what I have also but I want to drive on a paved road, see a fire truck coming down the street when my house is on fire and a cop to show up when someone has a gun in my back. Just a few of the things we all take for granted.
Taxes are necessary. Without them we would be living in caves.
Post Number: 3
|Posted on Tuesday, October 31, 2006 - 6:34 pm: |
Ok, let me stir things up a bit more as I have researched more.
Argentina and the US do NOT have a dual taxation agreement. That means that you WILL be taxed by both countries.
What the US does is give you an 80,000 exemption if you live outside the US for 330 days a year or more. Argentina considers you a tax resident if you live there more than 6 months a year.
If you pay taxes in one country, you can then use that as a credit towards that other country. For example if you pay 25% tax to the US but your tax bracket in Argentina is 35% then you will pay that additional 10% to Argentina.
In other words, you will always pay the highest bracket.
This is important because of the exchange rate, once can very easily fall into a high argentina tax bracket.
Argentina does apparently tax worldwide income. If you are just renting a place there and aren't in the country for a long period of time then perhaps you can just work outside the system and not worry about it.
However, if you are planning a long stay or planning to buy property then it would be wise to be aware of it as penalties are much worse than in the US.
Once you pay into the asset tax (for example, if you buy a house or apartment or even open a bank account) then you are required to report your assets worldwide (that's why it's called the asset tax). This would include homes and bank accounts out of the country.
From my research it seems that Argentina has been lax in tax collection before, but this has all changed recently.
Just one story here tells how they are now checking license plates and monitoring stores to ensure taxes are paid: http://news.bbc.co.uk/2/hi/americas/4523646.stm
Also of interest is that tax board demanded the names of all Argentineans who had booked flights to the World Cup. The idea being that those were people who had considerable assets who had not declared them. Remember, Argentina is not the US and there are few privacy laws or rights in that area. The government has full access to bank accounts and all wire transfers have to be declared and signed off on. (even the US doesn't do this)
I must admit, all of this dampers Argentina's prospects for me as a place to live long term.
I would also read this entry if you are concerned about banking privacy: http://expat-argentina.blogspot.com/2006/06/privac y-in-argentina.html
Well, that's all the info I have for now on this.
I am not a tax evader or anti-taxes. I realize they have their place. However, it would seem more than foolish to move to a place with a heavier tax burden than one already has. This is why I research these things...
Post Number: 261
|Posted on Tuesday, October 31, 2006 - 8:17 pm: |
I have tremendous confidence in the ability of the Argentine government to collect taxes just like I have tremendous confidence in the Argentine Federal police's ability to find the 40 55 gallon drums of bee honey that was stolen from the store just across the street from the police station over two years ago.
Post Number: 112
|Posted on Tuesday, October 31, 2006 - 8:32 pm: |
Just like the fact that, literally, just around the corner from the AFIP (local IRS)here in Mendoza, there operates the biggest illegal money exchange in the province, all in broad daylight.
Post Number: 6
|Posted on Monday, November 13, 2006 - 8:32 am: |
I came to the same conclusions as you did a couple of months back when I was looking for tax information on Argentina. I think that Argentine taxes would quickly add up to a lot. Of course as some others have pointed out, there is the possibility of not declaring foreign income or assets but that is a dangerous game to play especially if there's the possibility that you'll stay for a long time (bitter ex-girlfriends may let your secret slip), or if running a successful business within the country.
My home country (not USA) also doesn't have a double tax treaty with Argentina, and we have no capital gains tax on most investments. It would be a very unpleasant experience to move from 0% to 35% tax on sales of assets in my home country!
One possible option - though I've had a hard time finding reliable information on it - would be to make your residence in Uruguay where it seems that worldwide income isn't taxed. So long as you spend less than 6 months per year in Argentina you might escape tax residence there.
Does anyone have any information on Uruguayan taxes and Uruguayan residency requirements?
Post Number: 846
|Posted on Monday, November 13, 2006 - 11:04 am: |
Wizo, you may find this interesing...