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Roberto
Board Administrator
Username: Admin

Post Number: 707
Registered: 12-2004
Posted on Monday, September 18, 2006 - 8:54 am:   Edit PostPrint Post

Thank you, Riyad. You are right... it's own topic now.
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julie benson
New member
Username: Julie

Post Number: 2
Registered: 5-2006
Posted on Saturday, September 16, 2006 - 7:11 pm:   Edit PostPrint Post

We are Americans purchasing a lot in Argentina through the "native friend" option. The seller wants to declare the selling price as considerably less than what we are paying or it to save on the 2.5% tax. We hear this is common practice. What implications does this have for us when we decide to sell the property?? Any other advantages/disadvantages we should be considering??
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Apartmentsba.com
Member
Username: Saint

Post Number: 97
Registered: 5-2005


Posted on Saturday, September 16, 2006 - 7:45 pm:   Edit PostPrint Post

Julie,

First of all, I hope that this friend of yours is someone you totally trust with your life. I think the Argentina government is being ignorant with these laws in Bariloche and other places that make it difficult for foreign investors to purchase property under their own name. I have flown down to Bariloche many times, vacation there and have even thought about buying a house there (I actually placed an offer and backed out) but I didn't end up purchasing because I refuse to purchase real estate when I can't get the title free and clear in my name.

Just make sure that you trust this person completely. I've talked to some Americans that did what you are talking about only later to have a falling out with their "native friend" and it has caused a lot of problems. The native will always have the upper hand in a dispute so keep that in mind.

The practice of the seller wanting to list a false, artificial and more importantly Illegal lower price is technically illegal. Keep in mind that it's very common and most of the people I buy property from request it. I always try to purchase completely in the white (legal). Many sellers will not sell unless you record a much lower price. I've walked away from many deals because of this issue.

There are many corporations that purchased land/buildings/apartments and they face a 35% capital gains tax so they always try to get you to record a false lower price. Basically your lawyer and your realtor are taking the real risk because they are stating this transaction occured for the stated price.

From your standpoint, there is no really big benefit from recording the lower price. In most areas the property/asset tax is very minimal. In Buenos Aires it's 0.75% per year. (Example -- you buy an apartment for u$s 100,000. The annual property/asset tax is aprx. u$s 750/year. If you record $50,000 on the title deed you will save a whopping $375/year..big deal...) The seller is getting most of the benefit so if you are going to do this favor for the seller try to get the price lowered or get some benefit. The risks to you are that you never know if the government will pass some law in the future that establishes a capital gains tax. If they do and it's 25% or whatever % then you clearly will be disadvantaged.

Example. You buy the land for $100,000 yet the seller wants to list it for $50,000. 5 year later you decide to sell it and the piece of land has doubled in value. You sell it for $200,000 yet you recorded a false lower price of $50,000. Your capital gain is really only $100,000 yet on paper it will be $150,000 so you would get stuck paying more taxes under this scenario. You will most likely ask the same thing...to illegally list a lower price. This is a vicious circle here in Argentina that keeps going on and on.

The small advantage you might have is that you would pay less property taxes each year but probably not too much. The disadvantage is that it's illegal to do this. There is a lot of "white" and "black" here and it's almost impossible to stay totally "white". That is the truth.

Keep in mind that AFIP (Argentina IRS) is getting smarter and smarter. Now on sales here in Buenos Aires they are asking for 2 appraisals from more established realtors. They want to start controlling this illegal activity. So don't assume when you go to sell you can get the next buyer to record a much lower price.

Things aren't so cut and dry here and things can get complicated so know what you are getting into. Most foreigners get caught up in seemingly cheap real estate and rush to close deals, put property in other people's names (sometimes complete strangers or people they barely know).

I stand by my usual advice....if you wouldn't do it in your own country....why would you do it in another country?? Would you buy real estate with 100% cash in the USA and put someone else's name on the title deed??

Good luck.
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 83
Registered: 12-2005
Posted on Saturday, September 16, 2006 - 8:11 pm:   Edit PostPrint Post

I want to take this opportunity to pitch in something that no one has touched upon yet. The main advantage I see in illegally declaring a lower false amount on a sale is paying less tax on personal assets.
And here is my question: Does anyone pay this?
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Apartmentsba.com
Member
Username: Saint

Post Number: 98
Registered: 5-2005


Posted on Saturday, September 16, 2006 - 9:21 pm:   Edit PostPrint Post

Umm...I did mention it above. And yes, there are some of us that pay taxes on personal assets including property. In fact, I pay this tax on all the real estate I purchase for myself and my clients. The sad truth is the majority of foreigners purchasing here don't even know about this tax. They face a rude awakening when they go to sell their property. If you don't pay your asset tax, AFIP will know about it and they will not only collect the back taxes but there is a penalty of about 2% per month that you were delinquent.

Like I said....know the laws before you buy including taxes. I get emails almost on a daily basis from foreigners that complain that "no one told me that I had to pay a tax bill each year". Most realtors and lawyers don't tell you anything about this. You have an asset tax each year due in April. Make sure you pay it or you won't be allowed to sell your property.

Many locals never pay this tax but then again..they don't need any permit or permission to sell their properties and foreigners do.
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 165
Registered: 6-2006


Posted on Sunday, September 17, 2006 - 11:08 am:   Edit PostPrint Post

Any US citizen who has ever owned porperty in the US knows he has to pay property taxes every year. Why should it be any different in Argentina. It should be no surprise.

Some states have income taxes as does the US government. Florida does not have income tax. It has sales taxes on certain purchases other than food not purchased in a restaurant. There are various other use taxes. Purchasing a license for autos is a tax.

What types of personal property is taxed. In the US land is normally called real property while clothing, furniture etc. is called personal property.
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 84
Registered: 12-2005
Posted on Sunday, September 17, 2006 - 6:46 pm:   Edit PostPrint Post

That proves my point!
I am not talking about property tax. Not the bill that comes in the mail. I am talking about the additional "hidden" tax that obviously not many knows about that is your total assets (Car and Real estate) that adds to higher than 100,000 pesos.
Above 100K pesos you have to pay the additional tax.
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Apartmentsba.com
Member
Username: Saint

Post Number: 99
Registered: 5-2005


Posted on Sunday, September 17, 2006 - 8:06 pm:   Edit PostPrint Post

Here in Argentina you don't get any "property tax bill". You pay taxes on any assets including property (real estate). There is no bill that comes in the mail like in the USA...that's why many foreigners don't pay it. Most foreigners don't even know about it. It's your responsibility to file it. In fact, you need to get an accountant to prepare it and then file it. Another little known fact is that AFIP requires foreigners that own here to have a local representative (either an individual or a local corporation) to be in charge of tax issues. Still, AFIP doesn't really enforce this....YET.
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 85
Registered: 12-2005
Posted on Sunday, September 17, 2006 - 8:50 pm:   Edit PostPrint Post

What za heck?
Roberto, this topic merits its own section.
I get a property tax bill every year. What r u talking about my friend?
And I dont need an accountant to pay my property tax bill.
What I am talking about is the hidden "Impuesto de los bienes"
If you go over 103000 pesos you are obliged to pay tax over that amount. And for that you need an accountant.
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Apartmentsba.com
Member
Username: Saint

Post Number: 100
Registered: 5-2005


Posted on Sunday, September 17, 2006 - 9:04 pm:   Edit PostPrint Post

I would advise everyone to talk to their accountants and not take really important information solely from message boards. Sure they help but the best is to consult a trained professional when you are talking about taxes.

Riyad - I'm not sure what bill you are getting in the mail. You would be the first that I know of that gets a "property tax" bill in the mail, but I guess anything is possible here in Argentina. I can tell you that I've purchased hundreds of properties here in Buenos Aires and I don't get any bill in the mail for this "property"(asset tax).

The only bill regarding properties that I get in the mail is the ABL bill which is not a property tax bill. Again, anything is possible here in Argentina but this would be the first that I heard. What does the bill say across the top that you are paying that you are claiming is the property tax bill?
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 168
Registered: 6-2006


Posted on Sunday, September 17, 2006 - 10:30 pm:   Edit PostPrint Post

I think a good plan would be to ask the seller of the property to give you a copy of his property tax bill. At least that will let you know who to pay the tax to.

My Argentine Accountant is like Super Man but instead of working at the Daily Planet, he drives a taxi.

I am still trying to figure out this personal property(anyting that is not land) tax and real propterty(land and anything attached thereto) tax thing. Indulge me por favor. In the US we get a property tax bill in the mail from the county each year.
Federal income tax forms come in the mail. We get a bill in the mail from the county tax collector for the auto license renewal, a tax by any other name. We pay sales tax at the point of purchase. That is a state and county tax. It varies by county at least in Florida that is.

So, does anyone know what the difference, if there is any, between personal propterty tax and real property tax.

Do you have to pay taxes on jockey shorts? just kidding.

One observation. IF the taxing authority does not send out notices, why not? It is a pretty simple idea if you want to collect money from someone to send them a bill.

And the property tax, is it a provincial taxing authority or local or Argentine federal?
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 170
Registered: 6-2006


Posted on Sunday, September 17, 2006 - 10:35 pm:   Edit PostPrint Post

My pc is messing up
Roberto, if you could delete one of the posts I would appreciate.
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 86
Registered: 12-2005
Posted on Monday, September 18, 2006 - 9:16 am:   Edit PostPrint Post

Saint:
If you dont get a yearly real estate property tax bill then you dont own any property here. Simple.
Does'nt any one else own properties here?
The other tax you have to pay is when your total assets(Car and Real estate) go over 103000 pesos. For that you need an accountant to prepare it for you. There are sites that describe this tax for you.
Here is one:
http://www.clarin.com/suplementos/economico/2006/0 3/05/n-00501.htm
It is in Spanish..
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 101
Registered: 5-2005


Posted on Monday, September 18, 2006 - 12:10 pm:   Edit PostPrint Post

Riyad,

My advice to you is to talk to your accountant. That bill you are getting in the mail is your "ABL bill". It isn't the asset tax I'm talking about. It is a small form of a tax on property but very very very little. It's VERY cheap. Something like a few hundred pesos per year. The confusion might be in what we are labeling these taxes. What I'm talking about is the "asset tax" as you mentioned. And be careful...the laws aren't the same for foreigners as it is for locals when it comes to exemptions. I let my accountant handle all of that.

Good luck all.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 105
Registered: 5-2005


Posted on Saturday, October 21, 2006 - 1:01 pm:   Edit PostPrint Post

Hopefully Riyad talked to his accountant as I suggested. MOST foreigners don't know ANYTHING about the asset tax that they must pay on their property each year. They mistakenly think the ABL bill that they get for a few hundred pesos is their "property tax". It is a tax on the property but not the asset tax. As I mentioned, many times throughout this and other forums. You MUST pay asset taxes each year on your property that you own in Argentina including houses or apartments. It's aproximately 0.75% of the title deed price on your title deed.

Realtors and Escribanos don't mention this to you as they don't want to "rock the boat" or say or do anything that would dissuade you from purchasing. Remember that it's your responsibility to pay this each year. Also, remember that failure to pay this on time each year results in penalties, and interest charges. Also, as a foreigner, you can NOT sell your property without a special permit from AFIP (local IRS) and they will not grant your permit if you are not current on ALL taxes including your asset taxes. In fact, it's one of the first things they look for.

Riyad - I hope you talked to your accountant...Good luck all.
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 243
Registered: 6-2006


Posted on Saturday, October 21, 2006 - 3:49 pm:   Edit PostPrint Post

So if a piece of property sells for $1,000,000 US the tax is
3/4 of one percent or .75% = $7500. Who is the taxing authroity for this tax?

The asset tax is .75%. How much is the property tax?

It appears there is double taxation on land/real property.

In the US if your land or real property as it is called in the law is taxed by the county and if you live in a city it is taxed by the city with some of the tax collected by the city going to the county. A building of any type is considered part of the real property. It is the same in Argentina?

The state and the federal government do not impose yearly taxes on real property.
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 98
Registered: 12-2005
Posted on Saturday, October 21, 2006 - 10:57 pm:   Edit PostPrint Post

Yeah Saint I am working on it..
Couple of points: One has to pay that asset tax when one's assets go over 102.300 pesos. But you pay the difference exceeding that amount. So if your assets say are 200,000 pesos, you pay a .5% tax over the difference between 200k and 102.3K. Also if one's total assets go above 200,000, you pay a .75% tax over the difference.. And that is an anual tax, due on April 17th each year. Not really much of anything I'd say

Also most Argentinians, I think, dont know of this tax, since they assume if it doesn't come in the mail, it doesn't exist.
Can you tell me what does "ABL" stand for?
Cheers
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Roberto
Board Administrator
Username: Admin

Post Number: 802
Registered: 12-2004
Posted on Sunday, October 22, 2006 - 4:53 pm:   Edit PostPrint Post

ABL > Alumbrado, barrido y limpieza.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 109
Registered: 5-2005


Posted on Monday, October 23, 2006 - 4:14 pm:   Edit PostPrint Post

Riyad,

Be careful. There are different sets of laws applicable for local residents and foreigners. Certain exemptions that locals have, foreigner do NOT have so best to consult with your accountant. I believe for non-residents, the limits don't apply. The biggest mistakes I have seen foreigners make is they assume that things apply to them when they do not. That's why it's so important you not only deal with an accountant but one that specializes with foreigners taxes.


You are right when you said that many locals (residents) don't pay this tax. I know several locals that either didn't know they should be paying it or do but simply don't pay it. Keep in mind again, that when they go to sell they do NOT have to get a permit from AFIP to sell so there really isn't anything forcing them to pay this tax. However, as a foreigner (non- resident) you must get the permit from AFIP to sell and one of the first things they check is to see if you are up to date on your asset taxes so beware.

ABL is “un impuesto municipal” …each municipality (depending on the government of each city) has this tax. Certain areas might have a different name for it. It is a TAX that you always pay when you have a property. As Roberto mentioned, “alumbrado, barrido y limpieza” it means “ public lighting in the streets and the cleaning in the streets”.

I hope this helps. The reason why I take so much time posting is to help people that really have been given wrong information or really had no clue about these things. I get emails and phone calls on almost a daily basis of foreigners that purchased here and never were told about this tax. They only have problems when they go to sell their property.

Good luck.
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 99
Registered: 12-2005
Posted on Monday, October 23, 2006 - 5:25 pm:   Edit PostPrint Post

Saint
To tell you the truth I havent done anything yet, since I have not as yet met 2 or more accountants that coincided on their accounting knowledge.
One told me I didnt have to do anything till I got my residence permit (which I have applied for 5 yrs ago)
Another said that after 6 months here, even on a tourist visa I would have to start paying those personal assets tax.
Another says that I have to pay this personal assets tax on my assets here and anywhere in the world.
So not only the locals, but also the accountants, that have no clue of how to go about this.
I think the government has to start educating/informing their folks. Also I think that locals are obliged to pay this tax just as do the foreigners.
I hope some accountant that knows his/her stuff can one day help us out here in this forum!
Cheers
Riyad
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 110
Registered: 5-2005


Posted on Monday, October 23, 2006 - 5:45 pm:   Edit PostPrint Post

Hi Riyad,

DEFINITELY you are right. The most frustrating thing about doing business in Argentina is that there is a real lack of knowledge or different opinions. I deal with all these issues on a daily basis as we purchase about 2-3 properties per week.

Here in Argentina you can consult 5 different accountants and get 5 different answers. That's not exaggerating. It's the truth. Trust me as I've done it before. I have two accounting agencies on retainer that work with us on a daily basis and last year I had to hire an in-house accountant.

You definitely have to pay the asset tax here on your property. Whichever accountant told you that you didn't is wrong.

I totally agree with you that it's a really complicated issue here with taxes. Good luck.
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Arial
New member
Username: Arial

Post Number: 2
Registered: 10-2006
Posted on Tuesday, October 24, 2006 - 7:02 am:   Edit PostPrint Post

Riyad, do I understand correctly that you applied for residency five years ago? Is the implication that you have not achieved legal residency yet after 5 years?

A supposedly high-powered accountant in BsAs told me that after six months in the country I would have to pay the asset tax on all my assets worldwide. Yes it apparently includes car, bank accounts, real estate and probably your jockey shorts!

The rate of .75 is correct. That means for every $100k of assets, you will owe $750.00 in taxes. If I arrange to live outside the country just over 6 months each year I am not subject to the tax, he said. It seems to me that this would keep many persons of means outside the country if only they are informed! Not very smart I think. But please feel free to correct me if I am looking at this incorrectly.

I have met North Americans who have bought or are building huge, valuable properties who knew nothing of this tax when I asked them. One N. American restaurant owner even has an Argentina wife and he was incredulous. He has been there 3 years and just could not get through his head that there is such a tax in Argentina.

I hope that as others become more informed on the tax issue that you will keep us all informed. This is an important issue for me and I appreciate this thread. Arial
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Riyad Anabtawi
Member
Username: Riyada

Post Number: 100
Registered: 12-2005
Posted on Tuesday, October 24, 2006 - 7:31 am:   Edit PostPrint Post

Arial
Yes I have been waiting 5+ yrs on my residence permit. Stagnant bureacrats!
That is a new one, even bank accounts!
Another accountant told me this personal assets tax that you have overseas only applies to nationals, which makes more sense than applying it to expats.
Here is my feed : As far as I know it is a .5% on the difference between the max 103k and what you have over that .. So if you have 200k, then you pay .5% (which is by the way .005, not as you mentioned simply .5, a big difference) over 200k-103k=97k x .005= 485 annually.
And if you go over 200k, then it is .75% tax bracket, over the difference
Please correct if I am wrong..
Riyad
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 111
Registered: 5-2005


Posted on Tuesday, October 24, 2006 - 9:34 am:   Edit PostPrint Post

Arial,

I think you originally had $7,500 then property corrected it to $750 per year. That's actually not too much. In the USA I was paying whopping property taxes!! I disagree with your accountant saying you don't have to pay the asset tax on your property if you are living outside off Argentina for over 6 months per year. Trust me on this. I buy and sell a lot of real estate here.

I'm not sure why no one is listening to what I'm saying. I'll mention it again. When you go to sell your property as a non-resident, you MUST get a permit to sell your property. The first thing that they will do is see if you are up to date on your asset taxes (mainly on your property). Most foreigners don't hold bank accounts or other assets here. They will make sure you are up to date on this tax. If not, not only do you have to pay all the back taxes but penalties and interest charges as well.

I have a feeling I'm buying and selling and paying more taxes than these accountants that are giving you advice. 0.75% is NOT a lot to complain about.....

People blame a lot of people for not knowning about this. In the end, it's YOUR responsibility to know what the laws are. I do think realtors and Escribanos need to do a better job about telling you about this tax but they aren't the ones that are gonig to pay the penalties and interest charges for you not paying it. Stay up to date on this tax...

PS - Regarding applying for residency. I've never seen more red tape involved in any country than Argentina. I first applied several years ago with a company recommended by my original realtor. These people were horrible (AFN Visas). They made tons of mistakes, never responded to emails. I waited over 1 year and they never got my visa. And I was investing millions of dollars in Argentina!!! It seemed impossible to me not to get it ASAP. I had many reference letters from the USA including the USA Federal Reserve Bank (who I did business with for almost a decade). I finally fired them and to my surprise, they refused to give me back all my original paperwork (like original birth certificates, etc) unless I paid them their full fee of u$s 1,800.

I got stuck in paying them and then hired ARCA. They were more expensive but sometimes you get what you pay for. EVERYONE there was professional and they knew what they were doing. They got my residency within 1.5 months. Email lorena@argentinaresidency.com Lorena is great! They are the only company that guarantees your visa. If they don't get it, they give you your money back.

Don't waste your time with other immigration attorneys or try doing it yourself. The system has so much red tape here. It's incredible...
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 247
Registered: 6-2006


Posted on Tuesday, October 24, 2006 - 9:59 am:   Edit PostPrint Post

Yes Riyad

5% is different than .5%.
5% of a hundred pesos is 5 pesos.
.5% of a hundred pesos is 50 centavos.

The asset tax thing is really confusing because it seems no two accountants tells you the same thing. You would think there would be a tax code that spells it out for you but I have seen no references to one.

In the US it is Federal taxes http://www.irs.gov/
In Florida it is http://myflorida.com/agency/44/
In Orange County Florida it is http://www.octaxcol.com/

By doing simple searches I was able to come up with all the taxing authorities for my home in the US. And instead of calling an accountant you can also call the taxing authority and they will give you answers to your tax questions.

Making things simple for the common man is a good thing. If Argentina does not have the same than the people should ask the government to do something about it.
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 248
Registered: 6-2006


Posted on Tuesday, October 24, 2006 - 11:02 am:   Edit PostPrint Post

The minimum time to become a resident of the US if you meet all the qualifications is 7.5 years. So five years is not so long to wait if we are talking about the same thing.
I am talking about being a citizen of the US. Are you talking about becoming a citizen of Argentina?
In my talks with Argentine Immigration there is more than one way to live for extended periods up to the day you kick the bucket in Argentina legally. There is permanent residency which from what I understand is not the same as being a citizen.

The taxing of assets by Argentina for property outside the country of foreign nationals is absurd in my humble opinion. I am skeptical about this. Even if there is one I do not see how it is enforceable. If it is true my official position is "I own nothing outside Argentina," not even a pair of boxer shorts. I take all my clothes off the minute I leave Argentina. :-)
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Riyad Anabtawi
Intermediate Member
Username: Riyada

Post Number: 102
Registered: 12-2005
Posted on Tuesday, October 24, 2006 - 11:26 am:   Edit PostPrint Post

Saint :
You said "I think you originally had $7,500 then property corrected it to $750 per year. "
You wouldn't have to pay anything if you had only $7,500. I reiterate you would have to reach the first maximum of 103,000 pesos to start paying the .5% tax on the difference of what's above that..
I hope that is clear.. if not please correct me. I agree, this is nothing. Nothing to complain about.
What bugs me most though is the fact that on top of that, you have pay personal assets you own outside of Arg.. Even bank accts..
This is rediculous! It should apply to nationals only, especially the corrupt politicians who squander away the nations money and put them in accts overseas.
By the way I dont get in Mendoza the "ABL" tax. We get "Impuesto Inmobiliario" and that comes in the mail, just like in the US, where you get it as "Property Tax Bill"
Cheers
Riyad
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 112
Registered: 5-2005


Posted on Tuesday, October 24, 2006 - 11:36 am:   Edit PostPrint Post

No, I meant the first time I read Arial's post it mistakenly had $7,500 in taxes due instead of $750 due. Then it was edited so nevermind.

Really, there is no way Argentina will know what assets you have outside of Argentina. The ones they will focus on are going to be assets that are easy to see with your CDI number such as bank accounts INSIDE of Argentina and also property that is purchased with your CDI (tax ID number). You don't have to worry so much about bank accounts or property that are outside of ARgentina as they will have no way to really know and won't take the time to find out.

At the minimum they want you paying the asset taxes on real estate you own here in Argentina.

Also, as I mentioned before, I don't believe the minimum amounts apply to foreigners. I've been told that by numerous accountants.

Tom - You can't compare things to how they are done in the USA. You will go crazy if you try to compare. Argentina is a third world country and many things are third world when it comes to how they do things. It's a beautiful country but never try to compare the system to first world countries like the USA. You will drive yourself crazy if you do.

Really, I think the locals have this system so it's all very confusing so they don't really pay taxes. The system when it comes to banking, taxes, etc. is chaos here. The politicians really prefer it that way. I've purchased real estate from some high ranking politicians (as they all own real estate here in BA). On those deals, they wanted to do some pretty shady things.......Obviously we wouldn't allow it....

Cheers all.
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Tom Woodson
Intermediate Member
Username: Diverdown48

Post Number: 249
Registered: 6-2006


Posted on Tuesday, October 24, 2006 - 11:57 am:   Edit PostPrint Post

Yes, I remember the first trips I made to Argentina. There were two phrases that I heard over and over again...

"Tom, This is Argentina" and "it's OK." It took a while but I finally figured it out. Everything is OK in Argentina.
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Riyad Anabtawi
Intermediate Member
Username: Riyada

Post Number: 103
Registered: 12-2005
Posted on Tuesday, October 24, 2006 - 12:23 pm:   Edit PostPrint Post

Yes Tom..
I say that everyday and with a laugh.
Todo bien.
One more to make things clear for everyone that drops by, again, Saint, the assets that you have to pay that personal tax on is not only Real estate, it is also Cars.
Riyad
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 113
Registered: 5-2005


Posted on Tuesday, October 24, 2006 - 1:12 pm:   Edit PostPrint Post

Yes...I know it's all assets including cars. The fact of the matter is that most non-residents don't own cars here in Argentina. But yes...it's all assets in Argentina including cars.
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Orlando Martinez
New member
Username: Bracsim

Post Number: 8
Registered: 9-2006
Posted on Tuesday, October 24, 2006 - 4:14 pm:   Edit PostPrint Post

Saint: Can I get the ARCA website? What about Lorena, does she speak English, spanish or both? Thanks.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 114
Registered: 5-2005


Posted on Tuesday, October 24, 2006 - 5:05 pm:   Edit PostPrint Post

Sure. It's -- www.argentinaresidency.com

Lorena speaks both English and Spanish fluently and I can't see enough good things about her. She is very capable and very ethical. I highly recommend them.

Tell her Michael says hello. Good luck.
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Arial
New member
Username: Arial

Post Number: 3
Registered: 10-2006
Posted on Wednesday, October 25, 2006 - 5:34 am:   Edit PostPrint Post

I apologize for the edit. I am new and didn't realize my post goes directly to mailboxes. I realized the mistake immediately and thought I fixed it in time or I would have indicated it as an edit.

I think I was not clear. The accountant said that I do not have to pay taxes to Argentina on WORLDWIDE assets if I stay less than six months in the country in a given year. If I stay full time then I become liable for the asset tax on worldwide assets.

I would, of course, have to pay taxes to Argentina on income or property situated in Argentina no matter where I am physically. I was speaking only of the worldwide asset tax as I understand it, not property and other taxes in Argentina. I see that as a separate issue.

US citizens must pay tax to the US on income worldwide, for the rest of their lives, even if they never set foot back in the US. And must file annually if they have an aggregate of over $10,000 in any foreign bank(s). Which means they must file US tax forms which show bank accounts and income both inside and outside of Argentina, if they have any. I asked the accountant if there was any chance of Argentina comparing those tax forms and he said he didn't think so but it could happen.

Before anyone jumps to conclusions about the US tax, the US allows exemptions on income earned (such as salary) outside the US. Unearned income, capital gains and so on are a different category. It gets very complicated. If you are from other countries than the US, you don't have that concern as I understand it. But the US applies that law even to people who have obtained residency in the US, not just citizens. (And people criticize Argentina!)

I hope this is helpful and not muddying the waters. It is hard-earned and dearly paid for information and still I am not sure it is exactly correct.
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MIchael Calero
New member
Username: Michael795

Post Number: 1
Registered: 4-2007
Posted on Monday, April 23, 2007 - 2:33 am:   Edit PostPrint Post

Saint,

Just read what you had to say and thanks for the education on the asset tax.

Michael
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 165
Registered: 5-2005


Posted on Monday, April 23, 2007 - 9:15 am:   Edit PostPrint Post

No problem. Also, Riyad is wrong when he says that foreigners have an exemption on the first 103,000 pesos of assets. That only applies to locals. I just saw that a foreigner that we are helping sell his property is having problems selling it because his accountant screwed up his taxes and took the exemption. The exemption is ONLY for locals. Many accountants that are preparing them are preparing them incorrectly so make sure your accountant specializes with foreigners. Cheers all.
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Riyada
Intermediate Member
Username: Riyada

Post Number: 167
Registered: 12-2005
Posted on Monday, April 23, 2007 - 11:54 am:   Edit PostPrint Post

Saint.
This is confusing me even more!
Questions:
1. As a foreigner then, no exemption? In that how much does a foreigner needs to pay?
2. What if the foreigner is a permanent resident?
3. And what if that foreigner has a DNI? Do he/she fall into that exemption?
4. I have a property tax infront of me. It says "Impuesto Inmobiliario 2007". Then it specifies the Square Meters that the property has. I have none of ABL > Alumbrado, barrido y limpieza. This ABL looks like it Obra Sanitaria or something, and I get a bill for that.
Let's get this all squared up once and for all.
No accountant here knows their stuff.
Cheers
Riyad
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 166
Registered: 5-2005


Posted on Monday, April 23, 2007 - 12:22 pm:   Edit PostPrint Post

Hi Riyada,

First of all, I'm not an accountant and I think everyone needs to address their own accountant as to their exact situation. You can go to 10 different accountants here and get 10 different answers.

1. I'm told by AFIP (which is who I would go by as that ultimately is the one that matters) is that foreigners that do NOT have residency here can't take the exemption that locals can.

2. Permanent residents would not be considered "foreigner".

3. If you have a DNI I don't believe it's enough if you aren't living here a certain # of months per year. Permanent resident is a different category which I believe is covered for the exemption.

I agree with you that most accountants here don't have any experience with foreigners and they are making a lot of mistakes. The one I deal with has experience with foreigners and specializes with them.

It's VERY important that you get things done properly. This foreigner that is trying to sell his property has faced a LOT of problems because he ignored advice I gave him 2 years ago. Mainly to use an accountant that knows what he/she is doing and also to pay rental taxes if you are renting out the property. Cheers
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Robbie
New member
Username: Ganavan

Post Number: 17
Registered: 8-2006
Posted on Thursday, April 26, 2007 - 3:25 pm:   Edit PostPrint Post

I spoke to my accountant a while ago as I am sorting this tax out too. He mentioned that the”bienes personales” was introduced as an emergency measure ten years ago (as all is in Argentine taxation only to remain for ever). The greatest unfairness of it is for foreigners and therefore there is not much incentive to change. Basically if one buys a property for well over the liability threshold ($103 k) and this is on the deed, then one could be in for a hefty bill. However, if a life long (or long enough) resident has a property of the same value or even more, but the deed’s valuation with all the indexation and updating does not go over the threshold, then the new buyer will pay and the old established resident will not. As simple as that! Therein lies the prejudice against foreigners buying in Argentina. However, as you will surely understand this does not end there! Speaking to my accountant, he says that the local AFIP “understands” the financial situation of those that feed them and hence “allows” the taxpayers to declare the fiscal value that invariably is low. As you can see there are no hard and fast rules in Argentina. What you have is a collection of laws and rules made by different people at different times with no interest in the previous rules and laws that were in place. As a consequence as any judge in Argentina can tell you they can “pick and choose and mix” those rules or laws that are most convenient to the situation…
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 167
Registered: 5-2005


Posted on Thursday, April 26, 2007 - 3:51 pm:   Edit PostPrint Post

Robbie,

Accountants may have different opinions (that's obvious) but I would recommend you go by what AFIP wants and not want an accountant advises. The two are VERY different.

When doing your asset tax every year your accountant should calculate it based on the price used on your title deed when you purchased the property and NOT some false or older price. Trust me on this..... it will come back to haunt you if your accountant isn't doing it the proper way which includes using the price that is on your title deed.

No one likes paying taxes but it's better to pay it properly the first time then to pay back taxes, penalties and interest. There are a LOT of accountants that don't know what they are doing in Argentina (as with the rest of the world). Good luck.
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Arial
Member
Username: Arial

Post Number: 91
Registered: 10-2006


Posted on Thursday, May 24, 2007 - 6:06 pm:   Edit PostPrint Post

In the process of negotiating for real estate . . . old building on its own lot . . . and the real estate salesman insists that:

1. In the Capital Federal there is ONLY the ABL tax and the wealth tax and no others(as an assessment on property value--or municipal tax). He says that any confusion on the issue is because outside of the capital there are different or multiple municipal taxes.

2. The taxes on this property are currently 70 pesos every two months. He insists that the tax valuation rates will not reset if the property sells for a higher amount than it sold for in 1987.

Does anyone know if all this is true? I have heard different things. Like for example that there are multiple municipal taxes to be paid and that it is difficult to find all the assessments. Arial
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Simon Fawkes
Junior Member
Username: Expatba

Post Number: 33
Registered: 1-2007


Posted on Friday, May 25, 2007 - 11:38 am:   Edit PostPrint Post

Hi Ariel

You are correct that if you are buying residential property in the Capital Federal the only property taxes you pay are the ABL and the Annual Asset Tax (also called the wealth tax). In other provinces local taxes may apply.

If the property sells for a higher amount this should not in iteself affect the ABL rating. However the ABL ratings are very dated these days and there is talk of updating them generally. Whether anything will actually happen on this is anybody's guess.

I hope this helps

Simon Fawkes
Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 1430303980, http://www.amazon.com/exec/obidos/ASIN/1430303980
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Arial
Member
Username: Arial

Post Number: 94
Registered: 10-2006


Posted on Friday, May 25, 2007 - 12:14 pm:   Edit PostPrint Post

It does help, Simon. Thank you, and also to others including the person that wrote me off-forum. Really sincerely appreciate your responses. Arial.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 168
Registered: 5-2005


Posted on Friday, May 25, 2007 - 4:24 pm:   Edit PostPrint Post

Hi Arial,

Simon is correct. Trust me as I own many properties here in the Capital. Just make sure to be aware if you are buying things outside of the Capital the laws and taxes can differ. Each area has their own set of laws.

Also, MAKE SURE to pay file your annual wealth tax each year. As a foreigner you WILL have problems if you don't file this. Also, make sure your accountant files your tax properly. The laws are different for exemptions for foreigners vs. residents. I recently saw one foreigner that had his permit to sell his property delayed by over 6 months partly because his accountant filed his tax WRONG. She filed it as if he was a resident and not a foreigner. Also, I recommend if you are buying a rental property you are paying rental taxes on it as AFIP will check that as well.

I've sold several properties and didn't have problems as long as I paid the wealth tax on it each year, the ABL tax was paid and up to date and the rental taxes were paid.

AFIP is very very slow in granting these permits to sell which I think is a big mistake for them. Just make sure you are up to date on all your taxes and you will be ok.

Good luck.
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Mobi D
New member
Username: Mobi

Post Number: 1
Registered: 9-2007
Posted on Wednesday, September 26, 2007 - 10:12 pm:   Edit PostPrint Post

Hi all,

Really interesting forum! Has been very enlightening. Wish I had found this ages ago.

I have a question that I can't get a straight answer to and would really appreciate some help here. I have searched both online sources as well as asked various escribanos and other "professionals" and I get totally conflicting information.

My question is the following:

What Capital Gains tax is an individual (not a company) responsible for when selling? I have heard/read everything from zero - 35%.

Please help.

thanks in advance, and I will look forward to reading future posts here!
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 201
Registered: 5-2005


Posted on Wednesday, September 26, 2007 - 11:10 pm:   Edit PostPrint Post

Mobi,

You will find that many lawyers and accountants in Buenos Aires give out WRONG information to foreigners. Most simply don't have experience with foreigners and give out wrong information. I've sold many properties for my clients (who are almost all foreigners/non-residents).

The capital gains tax as an individual is 0%. Keep in mind that is NOT the case if you bought as a corporation. Only as an individual. Anyone that tries telling you there is a capital gains tax for a foreigner is wrong. I've sold lots of properties for individual foreigners and the capital gains tax was 0%.

Keep in mind though that this 0% is contingent on the fact that you have been observing the laws and properly paying your annual asset tax on the property. The annual asset tax is around 0.75% per year based on the title price on your Escritura (title deed). It needs to be paid for each year you owned the property. The tax is typically due by the end of April of each year.

Also, if you owned the property and were renting it out, you should have paid AFIP (the local taxing authority) on that rental income. AFIP is very good about checking to make sure. You can't say you were simply using it and didn't rent it if you were as they require to see every page of your passport so they can see when you were in the country. Also, if it sat empty they will know as they many times want to see electricity bills, gas bills and telephone bills so they can easily see if you are lying.

The confusion comes as many foreigners never paid their asset tax and there are huge penalties and interest if you didn't pay. As long as you have been paying you will be fine.

As a foreigner, you must get an AFIP permit to sell where AFIP will make sure that you are up to date on all your taxes. An accountant must prepare the permit. Almost NO accountants specialize with foreigners. The ones I work with do and have not had problems getting the permit as long as the owners are up to date on the taxes. Several foreigners that hired the one I worked with were not up to date on the taxes and they had to get current then they got them. It can take anywhere from 30 days if everything is in order to several months if things are not in order.

There is a 1.5% "transfer tax" that foreigners must pay when selling based on the sales price recorded on the title deed. Again, the reason you have a lot of misinformation is simply that most accountants, lawyers and Escribanos simply don't know the law or don't have much experience with foreigners.

For those property owners that own real estate in Argentina, one way you can make things easier and protect yourself more is by applying for residency and getting your DNI which makes things much easier when you go to sell your property.

Also, as a foreigner, it is VERY easy to get your money OUT of Argentina. If you recall, getting the money in when you purchased was VERY difficult with lots of paperwork and paying up to 2.5% in taxes and fees and exchange rate spreads, etc. When you go to sell it's very easy as a good Escribano (lawyer) can structure the closing where the buyer wires to your account abroad (USA, Europe, wherever your bank account is). It is perfectly legal and I've done it several times for myself and my clients. Or you can have the buyer pay you in cash here in Argentina and there are several firms that will handle wiring the funds to you abroad for little to no fee at all (small wire transfer fees).

So, the main thing is to make sure you are up to date on your taxes. If so, the only tax you should be paying is the 1.5% transfer tax. This doesn't count whatever capital gains taxes you may have in your own country. I'm only talking about Argentina.

I hope this helps.
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Mobi D
New member
Username: Mobi

Post Number: 3
Registered: 9-2007
Posted on Thursday, September 27, 2007 - 9:56 pm:   Edit PostPrint Post

Hi Saint,


Thank you so much for your quick and clear reply. I really appreciate your helping to clarify this subject for me. It has literally been months of getting completely contradictory answers to this question from so many different sources I was starting to wonder if there was any way to get a definitive and credible answer. Thanks again!
I am now going to read through all the above posts about asset taxes and property taxes to get my head clearly around those items.
Lucky for me there are people like you out there!
cheers and keep up the great work!
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 202
Registered: 5-2005


Posted on Thursday, September 27, 2007 - 10:32 pm:   Edit PostPrint Post

You are welcome Mobi D. Also, keep in mind there is a "stamp tax" (impuesto de sellos) for a buyer when they buy. The stamp tax is waived for a first time buyer ONLY up to 360,000 pesos (this could change in the future and the limit has changed each year for the past 2 years - formally there was no limit then went to 600,000 pesos last year and this year it went to 360,000 pesos). After that there is a 2.5% stamp tax when you buy.

Make sure if you don't want to split this tax as a SELLER when you go to sell that it's specifically mentioned on the offer (reserva) that you do NOT want to split this tax. If you don't mention it on the offer then legally it is split 50% / 50% (or 1.25% each between the buyer and the seller).

So keep that in mind. That is another tax but many sellers refuse to share this with the buyer and make the buyer pay for the entire thing. Keep this potential tax in mind as well.

You will find that MANY people in the real estate, legal (lawyers AND Escribanos) and accountants simply do not know the laws here in Argentina and when you ask and they don't know, they will tell you something that is not true or speculation.

I spent 2 years researching the laws here BEFORE I moved to Argentina, spent tens of thousands of dollars preparing comprehensive surveys and studies and paying foreigners to ask what mistakes they made or how they got cheated over the years. This paid off. I first moved to Argentina in 2004 and ever since then (almost 4 years) I've been involved on literally hundreds of transactions (both buy and sell side) and never had problems because I base what I do on what the law is. This is on purchases of land, houses, apartments, entire buildings, and even vineyards.

You will find that a good lawyer or accountant can't argue with the law. So when someone tells you there is a 35% capital gains tax as an individual do question them on it and ask them where exactly they are coming up with this tax. Ask them to detail on a spreadsheet exactly what is making up that 35%. Odds are they won't be able to give you a clear answer. Ask for the specific tax code # where it spells 35%. You know what? They won't be able to give you one as it doesn't exist.

Many foreigners over the years have gotten cheated here or paid false taxes that don't exist. In many of those cases that I've seen and heard, that money went into the pocket of someone else NOT AFIP.

I remember after I first moved here I met with an American. He told me how he paid a 2.5% stamp tax and how his realtor and his lawyer told him he had to (Back then there was an exemption on your first property in the City of Buenos Aires). I kept telling him they were wrong. He told me they were right. Finally later he admitted I was right AFTER he paid thousands of dollars in unnecessary taxes. Who knows where this 2.5% tax went to.

Another time after I moved here I helped a lady get back over $10,000 from an Escribano that cheated her. She hired me to renovate the property. She already had purchased it. I remember meeting her and she was complaining about the high closing costs and we went through each one. At the time there was no stamp taxes for your first property. I had heard of the Escribano (lawyer) that she used. I called him with her right there in my office. I got him on the phone and I said in Spanish.

"Dr. X Good afternoon. I am representing Jane Doe and I would like to make arrangements to get the u$s 10,000 that she overpaid for the stamp tax you charged her."

His response, "I think there is some mistake. I paid that 2.5% stamp tax to AFIP".

My response: "Ok, can you please provide a copy of the receipt payment to AFIP as you didn't provide her with a copy of it and really it's waived as you should know as a first property purchase".

His response, "Listen, I don't have the receipt and I have been in practice for 20 years and I've always charged foreigners this tax. They have all paid it and I'm not refunding anything".

My response, "Dr. X. Ok... thank you for establishing the fact you have been cheating foreigners for 20 years now. Now, I'm curious to know how many of those 20 years you have been paying AFIP for those taxes you have been charging. I wonder if you have pocketed that money or declared it and paid it to AFIP? I have a friend that works at AFIP and I purchase tens of millions of dollars in real estate here in Buenos Aires and I wonder when we can make arrangements to get this u$s 10,000 over payment in false taxes you charged my client".

His response, "Please send someone tomorrow to my office and I'll refund this money".

You know what? He did refund this $10,000. I doubt he was paying this unnecessary tax that he was charging and my suspicions were spot on. Other times I've seen Escribanos that did charge it and they did pay it to AFIP and provided receipts to the clients. But you know what? AFIP is NOT going to give money back after you already paid it. Even if your lawyer made a mistake.

Unfortunately, these kind of things happen to foreigners. Why? Because an authority figure (real estate agent, lawyer, accountant, Escribano) tells you that this is the law and you must pay it. Most foreigners don't know the laws in their home country so how are they going to know the laws in a foreign country? This is one example of many I can give.

This lady was so overjoyed to be getting back u$s 10,000 that she never knew she was overcharged....

Moral of the story? Know the laws and it will always benefit you. I don't claim to be some expert on the law but I have taken several years to research the laws in detail. I've studied the real estate laws here in Argentina almost 6 years now. I've been through more property transactions than probably any single individual in the world here in Argentina. And i'm not talking about simply giving someone advice. I'm talking about actually making the purchase myself or for a client with a legal power of attorney so the cash was on the table for each property purchase and I made it myself.

I haven't written any books on real estate in Argentina but I probably could. There are a lot of so called "experts" out there and new "real estate consultants" sprouting up overnight. But you ask them how many transactions they have gone through. How many properties they themselves own or how many they have actually purchased for a client and you'd be surprised some of them have gone through only 1 or 2 transactions themselves. Some are operating without setting up a formal corporation and yet others I've seen or heard about aren't even a legal resident of Argentina and working here illegally. I'm not saying this to belittle any person or company. My point has always been to know and understand the laws here.

You will find that on various message boards those that have never even been through a transaction in Argentina try to give others advice, scare them, tell some stories how you can't get your money out of Argentina or some other lie. It's ironic they are trying to give others advice when they have never done business or purchased property here. I equate it to someone writing a book about being a worldclass lover yet they have never even made love before.

Knowledge is power. I don't post all of this to try to get business. In fact, I will stop providing consulting at the end of 2007 as I'm getting out of consulting to focus on other ventures including a hotel I'm building as well as a few buildings I am building. I've always posted to help people an empower people to understand the laws.

Best of luck to all.
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DAN
New member
Username: Crazygaucho

Post Number: 19
Registered: 7-2006
Posted on Friday, September 28, 2007 - 6:34 am:   Edit PostPrint Post

Good job Saint! I'd pay anything to see the face of this "doctor"......... but don't think this kind of things happens only to foreigners, it happens to everyone everywhere .
I grew up around argentina and uruguay up to my twenties and I know a lot of locals that got scam anyway, like selling the same bussines to diferent people etc ........ one personal hint:to begin with I try to deal with "inmobiliarias" that have a last name as a bussines name , it they have a bussiness name such as a city a place etc I research twice as much. a local saying here is something like this "even when they tell you good morning , go outside and check to see if it is day or night"
on my humble knoledge I know in the States the thre basics rules of real estate "location -location-location" here we have thre more "research - research - research"
peace y'all
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 204
Registered: 5-2005


Posted on Friday, September 28, 2007 - 7:58 am:   Edit PostPrint Post

Dan,

Yes, you are EXACTLY right! It doesn't just happen to foreigners but many locals as well. Just the other day I read in the paper about a VERY complex multi-millionare dollar scam that involved Escribanos, lawyers, real estate agents, and even civil servants from the city and engineers. Apparently these people were all working together in a large scale operation and finding properties (houses and apartments) of dead people with no next of kin or just making up paperwork. Then they were making fake title deeds and selling them to unsuspecting LOCALS. (See - http://www.servicios.clarin.com/notas/jsp/clarin/v8/notas/imprimir.jsp?pagid=1488840)

These people are all going to jail for a long time but think about the poor people that bought the properties. They now are stuck as those properties don't belong to them. The properties will get tied up in probate court. Things here in Argentina take FOREVER when you sue someone. That is why there aren't so many lawsuits. Look in the paper many times and you will read something like "Girl stuck by city car in 1998 gets $25,000 settlement". It's sad that you always read that it's been tied up in court for 6-10 years.

So imagine buying a tainted property that isn't "clean" or has a lien, mortgage or encumbrance on the property.

Certainly many locals are being cheated as well. Like I said, most people don't know the laws in their own country let alone in a foreign country. The ONLY way to protect yourself is using VERY trustworthy people that have an established reputation of providing hundreds of transactions over a period of time. Remember there are simply NO ROOM for mistakes on a 100% cash transaction with dollars exchanged over the table....

Stay safe all.
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Mobi D
New member
Username: Mobi

Post Number: 4
Registered: 9-2007
Posted on Friday, September 28, 2007 - 10:20 am:   Edit PostPrint Post

Hey Saint,

Thanks loads! I did already know about the stamp tax, but as you say knowledge is power. I agree completely. I appreciate any/all help, and would also like to thank you for all the excellent info on your web page (very readable and rings sincere and knowledgeable - and not just some sales pitch).

Read in one of these forums where you referred someone to a link on your site to answer to their posted question and they came back asking you to sum it up in 25 words or less...I was stunned!!

Honestly, that someone takes the time to share so much useful info (and free to boot)...I could only laugh at his response to you. Cheeky.

Even if it were to get clients, you definitely put in the sweat with how much you are out there and the time you take to explain everything to people in this forum.

If I go the route of consulting I will definitely retain your services.

Thanks again for being out there for those of us that appreciate your help and for enduring all sorts of pettiness :o)

Cheers,

Mobi D.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 205
Registered: 5-2005


Posted on Friday, September 28, 2007 - 10:50 am:   Edit PostPrint Post

Hi Mobi,

Yes, it's a bit comical sometimes. I literally get HUNDREDS of emails per day. These days I can't answer individual questions for those that don't retain me or at least do an initial consultation where I answer all their questions in detail and the process. The main process is on my website FREE for all to read the process. It's accurate. Some people get mad or say it's too long. There are about 25 pages of information. It's strange people are about ready to spend 100% cash on a property purchase yet they don't want to take a few hours to go through and read in detail about the process and what it entails. People are lazy by nature. Even when it comes to an investment. Look at all the people that buy mutual funds or stocks yet they have never done research on the company or firm. They just buy blindly because they read about it in the newspaper, heard it mentioned from their friend or heard it's the next big thing.

That's part of the problem in society these days. These same type of people are the ones that signed off on their subprime mortgages or ARM mortgage applications and they didn't understand it but they signed it because someone told them it was "good for them". They signed where their lender marked and odds are they made an "X" for them all the places to sign. These people didn't read it or understand it but they didn't want to take the time to read all 25 pages of what they were signing. Then later, they try to blame someone else for not understanding the process or what they were getting into.

Yes, I remember that post where some guy asked me to sum it up in 25 words or less. No, like I said, I don't post all of this information for business. I don't need to. I already am getting hundreds of emails per day and as I mentioned, I'll stop consulting altogether in 2008. Some time after my firm appeared in the Economist Magazine, New York Times, Wall Street Journal, USA Today,HGTV and various respected financial magazines in the USA/UK/France/Ireland/Asia I have had NO problem with getting investors.

I posted all of that information a few years ago on my website to help people. I would get many emails and phone calls per day about people that got cheated so I figured if I could help a few people to understand the process it would be worth it.

No one should take posts on message boards for solid financial and legal advice. Do your own research for that. However, it is nice to have an unbiased and accurate description sometimes on how the law works.

I wish you and all other investors the best of luck.
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Mobi D
New member
Username: Mobi

Post Number: 5
Registered: 9-2007
Posted on Friday, September 28, 2007 - 11:31 am:   Edit PostPrint Post

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Mobi D
New member
Username: Mobi

Post Number: 6
Registered: 9-2007
Posted on Friday, September 28, 2007 - 11:37 am:   Edit PostPrint Post

Also, perfectly understandable that you don't do in depth consulting work for free :o).
Business is business.
Anyone who has had one understands this clearly.
This is why I genuinely appreciate and thank you for all the information you have already taken the time to provide gratis.
I think what you have accomplished is fantastic and your attitude encouraging.

Mobi D.
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Tom
Advanced Member
Username: Diverdown48

Post Number: 443
Registered: 6-2006


Posted on Friday, September 28, 2007 - 3:00 pm:   Edit PostPrint Post

Good one Dan

"even when they tell you good morning , go outside and check to see if it is day or night"

I got a good chuckle out of it
Gracias amigo
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Benco
New member
Username: Benco

Post Number: 17
Registered: 4-2007
Posted on Monday, October 08, 2007 - 2:18 pm:   Edit PostPrint Post

Hi all,
in case you have not noticed the recent announcement in the newspapers: the asset tax (impuesto a los bienes personales) is going to change. Assets up to 300k pesos are free (instead of the former 102k), then you pay 0.5% up to 750k, and beyond that it increases further. The change will be retroactive for 2007. As noted before in this thread, different rules may apply for foreigners without residency.

Together with other measures of the government this is probably part of the preelectoral spending spree with the internal codename "happy october". Well, I am not allowed to vote, but I will still enjoy my tax cut...
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 218
Registered: 5-2005


Posted on Tuesday, October 09, 2007 - 1:49 pm:   Edit PostPrint Post

Remember it's ONLY for residents as you mentioned. And it's not really just a "tax cut". Those that have over 2 million pesos in assets our taxes have gone up! So it's a tax increase for those that have a lot of assets inside Argentina. And to most reading this board (foreigners) it would not apply to them.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 219
Registered: 5-2005


Posted on Tuesday, October 09, 2007 - 2:24 pm:   Edit PostPrint Post

FYI...here is a link to the article that talks about this..

http://www.lanacion.com.ar/EdicionImpresa/economia/nota.asp?nota_id=950883

And Remember this only applies to residents NOT foreigners that own property here. There are many accountants that are incorrectly filing annual asset taxes and using laws for local residents instead of a foreigner and this isn't correct. You will have problems when you go to sell your property if your accountant filed your tax wrong. They will require that you file an amended return and pay the back taxes and some penalties if your accountant filed it wrong so make sure to use accountants that know and understand the laws for foreigners. It will save you a lot of aggrevation and hassles when you go to sell your property.

Best to all.

(Message edited by admin on October 09, 2007)
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Benco
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Username: Benco

Post Number: 18
Registered: 4-2007
Posted on Tuesday, October 09, 2007 - 7:44 pm:   Edit PostPrint Post

You are right, I should not see this issue from my perspective only. In fact, the government claims the change will be fiscally "neutral" because of the higher tax for the wealthier people. When I read about this I immediately wondered how many of those would actually pay their taxes. It is good to hear that at least some people do

For all foreigners who plan to become residents in order to save taxes and to sell their properties with less hassle, there is one point I would be careful about: as a resident you pay taxes based on your worldwide assets and your worldwide income, not just on what you have in Argentina. If there is no tax agreement between your home country and Argentina you might even be taxed twice. I am not an expert on this and probably ApartmentsBA will know more, so as always it is a good idea to talk to a specialized accountant who will help you to avoid such pitfalls.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 220
Registered: 5-2005


Posted on Tuesday, October 09, 2007 - 8:16 pm:   Edit PostPrint Post

Benco,

Yes, always good to look at both sides of the coin. For many it's a tax cut and for others it's a tax increase. Yes, there are plenty of people paying taxes here, but I agree with you that most locals don't.

You are correct that Argentina taxes worldwide income but from a realistic standpoint, there is really no way Argentina would know what you hold OUTSIDE of Argentina. They have a big enough problem collecting taxes on the locals of what they own INSIDE Argentina. Also, look at the number of local residents that hold their bank accounts and assets outside of Argentina. I would bet you a million dollars they aren't declaring all of them. In fact, most of the wealthy and upper middle class of Argentina hold their savings OUTSIDE of Argentina. There are billions and billions of dollars OUTSIDE of Argentina and don't think these people are declaring these assets.

Also, look at many politicians here in Argentina and I'm sure you will find they also hold offshore accounts and assets OUTSIDE of Argentina and I can assure you they aren't declaring them nor paying taxes on them either.

Yes, I agree with you to talk to a good accountant and lawyer that can help you structure things to protect you and ensure things are done properly.

But I agree with you totally Benco. I know plenty of locals that have no clue about what the tax laws are and they aren't paying income tax on their assets including their houses. I remember when I moved to Argentina and I studied the tax laws here and I was asking everyone I met about this asset tax and many locals didn't even know about it and they weren't paying any taxes on their main asset which was real estate holdings.

No one likes taxes but honestly if Argentina got structured and enforced the tax laws for even just the asset tax on real estate the coffers would be full! The problem is that how much of that money would go towards good uses no one knows....that is the reason why many justify not paying taxes but it's not right....

Argentina holds one standard for foreigners and forces them to pay taxes (both asset taxes on real estate they hold and also the rental income tax) yet they don't do this for locals. They should hold the same standard for locals as well. As I mentioned, even if the city just enforced the 0.75% (formally) asset tax there would be tremendous tax income for the government.

Still, progress is being made and AFIP is a lot smarter than they used to be and tax intake IS drastically improving year after year.
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Robbie
Junior Member
Username: Ganavan

Post Number: 28
Registered: 8-2006
Posted on Wednesday, October 10, 2007 - 4:45 am:   Edit PostPrint Post

Saint,

Your words are too true. The problem as usual is ultimately the government and politicians. On the practical side, if there were just lets say 5 or so taxes that were enforceable and enforced everything would be simpler and cheaper to control. The problem is that as not enough is collected with one tax, another is created and then another until you have a jamboree or taxes with little collected on each one a tremendous burocracy to manage them. It becomes the chicken and egg.
Regarding offshore for Argentines, how does Uruguay and especially Punta del Este finance itself? Yes, you guessed right. Truckloads of cash move over the river on a daily basis, or at least that used to be the norm. I think perhaps less so nowadays.
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 221
Registered: 5-2005


Posted on Wednesday, October 10, 2007 - 8:57 am:   Edit PostPrint Post

Robbie,

Yes, I agree with you. They could easily streamline things and make things MUCH easier. Instead of creating new laws and new tax laws if they just took the existing law on the asset tax and enforced it for only the assets in Argentina (for locals as well as foreigners) there would be a HUGE windfall of cash.

All AFIP would have to do is go through the Central Property Registry that has all real estate tracked by the DNI numbers. Just from that alone it would be incredible. They could easily collect back taxes as well. The sad truth is when a local resident with a DNI wants to sell his property there is NO check done on if he/she has been paying their asset tax. They are allowed to sell it very quickly and easily and it's a vicious circle as the next owner doesn't pay it either.

The only ones that are forced to pay this asset tax are foreigners. This can easily be solved by hiring a few employees in AFIP and putting together a database and getting out notices and tax bill statements to the property owners. Really, if AFIP wanted to hire me, (of course I'd do it for them for a % of all taxes collected...ha, ha) I could bring in hundreds of millions of dollars in taxes for them quickly and easily.

The problem is that politicians have no interest in enforcing the tax laws or they have selective criteria who they want to tax. It's NOT popular to enforce tax laws. The local citizens here are "serial tax evaders" for the most part. I've never seen anything like this anywhere in the world. If the government really wanted to do something about it they easily could. No one keeps their money in the bank so that isn't a method of taxing assets. Again, the easiest way is enforcing the asset tax on properties that locals own. I'd like to see a politician that has the will to enforce this law. Because the one that actually does this, although it will be highly unpopular, they will do more to help Argentina in the long run.

Yes, Robbie is right.....there is so much money in Uruguay from Argentines. It's staggering. Every single upper middle class to wealthy person I know has accounts in Uruguay. Punta del Este really is made up of money from Argentina and go to towns like Buzios, Brazil and almost all the stores and hotels and restaurants are owned by Argentines. (and don't think they are declaring these assets on their tax return).

It IS more difficult to open a bank account in Uruguay these days. Before I heard it was easy but these days they are VERY careful and it's been one of the most difficult places where they ask for a LOT of paperwork, copies of bank statements, even a resume. They want to make sure that people opening accounts there are legitimate and I think that is the right step.

Uruguay banking system is very good. Argentina's is horrible. It's like a 3rd world country for the most part. Full of fees and not efficient.
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Benco
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Username: Benco

Post Number: 19
Registered: 4-2007
Posted on Wednesday, October 10, 2007 - 9:31 am:   Edit PostPrint Post

Yes, for a determined government it would be a piece of cake to enforce the asset tax at least for properties in Argentina. And for sure they all know what should be done and how it could be done - but the political will is just not there. Enforcing the asset tax would come at a huge political cost for anyone who would dare to do so. It is a weird situation.

It is also ridiculous that there are strict regulations on bank transactions in order to fight money laundering, and at the same time everybody knows how to bring in money illegally using these shady casas de cambio. Why don't they crack down on this? It could be done easily, but apparantly they don't want to.

There is some hope that things are improving slowly. For example, illegal buildings are now detected with the help of satellite pictures. Some brave officials seem to have the right ideas...
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Robbie
Junior Member
Username: Ganavan

Post Number: 29
Registered: 8-2006
Posted on Wednesday, October 10, 2007 - 4:17 pm:   Edit PostPrint Post

Benco,
It is not so much laundering of money they fear when people bring forex into the country. In the past USDs were welcome, not now. The reason for this is that it creates inflation. As the dollars are changed for pesos, the Central bank has to issue more paper money. This is done to keep the Peso/Dollar at a competitive rate for exports.
What you say about the casas de cambio is very true. The sad thing is that politicians cannot take the bull by the horns because they are all personally upto the neck in these kinds of transactions on the one hand and on the other they would have to have honest inspectors on the street, and almost imposibility in Argentina.
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WTMendoza.com
Junior Member
Username: Welcometomendoza

Post Number: 33
Registered: 7-2007


Posted on Wednesday, October 10, 2007 - 8:30 pm:   Edit PostPrint Post

..mot to mention that probably a decent percentage of assets to tax belong to the very people that "control" Argentina. I doubt you would want that job, ApartmentsBA:-)(smiley)
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 222
Registered: 5-2005


Posted on Wednesday, October 10, 2007 - 9:08 pm:   Edit PostPrint Post

Benco,

You are 100% spot on target what you described. It would be a piece of cake to put together ALL the owners of properties in Argentina and easily track down the owners by DNI number and easily find out who has been paying asset taxes on their real estate they own. The government could easily send a bill every year to all owners and collect on this tax. As you mentioned, it would come at a huge political cost as all locals HATE paying any tax at all. It is a strange situation.

I also agree very strongly that these strict regulations and the cost to get dollars and investment dollars into Argentina is totally ridiculous. I hope one day this changes.

Robbie - you are totally corect as well. These politicians I'm sure are all clients of money transfer firms that bring in or send out funds possibly in "black".

Mendoza - Yes, you are right...there are a group as you say of very wealthy people that basically control Argentina. There are many wealthy people including some politicians. Many of these people are friends or friends of friends. Typically they don't want to pass any laws that will affect themselves, their family members or their friends....that's why it's so tough to change things here in this country.

No, I wouldn't want the job but I do hope someday there is someone that makes a real change in the political environment here that will have a LONG-TERM benefit for Argentina instead of just temporary fixes.
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Benco
New member
Username: Benco

Post Number: 20
Registered: 4-2007
Posted on Friday, October 12, 2007 - 4:58 pm:   Edit PostPrint Post

Thank you, ApartmentsBA. Since I am relatively new to this country I am never completely sure if I am missing something. It is great that we have some experienced people here on this forum.

Everyday I am learning a bit more by talking to my Argentine friends and by simply doing things. Today I talked to an escribano about the fact that it is common to close real estate deals with cash on the table. I suspected that this is due to the rotten banking system and that people would not trust in the banks. He corrected me and said that would not be the real reason. The main reason would be that bank transactions could be traced - it is all about tax evasion.

When people have their money in banks in Uruguay and do not pay taxes, they cannot simply bring the money in via a bank transfer. They would have to declare the origin of the funds and at some point AFIP might ask nasty questions. So they bring the money in illegally and pay in cash. Also everybody wants to declare a lower value on the property title in order to save taxes, and it would be risky to pay a larger amount via a bank transfer. Again, AFIP might review the transfer and ask questions.

In Europe, where I come from, there is also a lot of tax evasion going on. For sure it happens in every country. But at least it is publicly viewed as something evil and there is also a considerable risk of getting caught. This seems to be strikingly different here. I believe in Argentina there is a widespread consensus that people who pay taxes are idiots.

I have learned that whenever you encounter strange behaviour here, a good starting point to understand what is going on is to ask yourself: Does it help them to fool the tax man?
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 223
Registered: 5-2005


Posted on Friday, October 12, 2007 - 6:51 pm:   Edit PostPrint Post

Benco,

You're welcome. Yes, I always believe that public message boards are very powerful and helpful (as long as people are respectful) and people are posting accurate information. I've been part of message boards since the internet started and have always enjoyed sharing my experiences unselfishly so that people can benefit.

Yes, real estate deals are almost always in cash literaly with each u$s 100 bill counted out. It's surreal. I've literally had over u$s 100 million going through my fingers over the past few years. I always joke that I've probably seen more actual cold hard cash than probably most people including the likes of Donald Trump. Of course he does a lot of deals but they are all with bank wire. FEW people deal with cash on deals on a weekly basis.

There are many different reasons for the cash and not bank wire. It's NOT all tax evasion either. There are many factors including the locals extreme distrust of the banks here. I know you are new here but ask your friends what the banks did at the crash and cut off their cash flow. The banks literally closed, gave people a fraction of their actual savings and literally they could take out a few hundred dollars per month.

The actual taxes when you sell are NOT high. It's only 1.5% transfer tax. So it's not so much just a tax evasion issue. IMHO, it's more an issue that people evaded the taxes in the first place (Or maybe their family did before) and they can't justify the purchase price and most locals still try to declare a lower amount on the title deed just to keep the government out of their affairs. But make no mistake....the government can easily track the transaction as everything is tracked with either a CDI number (tax ID number if you are a non-resident) or a DNI number if you are a local.

It's not ALL about tax evasion. It's about a systemic distrust of the banking system, the government or "Big Brother" in general. Generally, the locals are distrustful so one thing they trust is cash. There is no way they can get cheated if the cash is on the table in front of them and they aren't signing over the title deed until they get paid. It's archaic but actually the system works well. It's totally old school but really there is no risk really for the buyer or the seller as it's always done in a bank or money exchange firm and typically they have a money counter that will make sure the bills are genuine. I've been involved in hundreds of transactions in the past few years... just about all cash and I've never got passed a counterfeit bill. Many times the sellers will want to change bills that have rips, writing or that they simply don't like.... but it works well.

The system is getting better as more and more locals are getting better about recording the real price. Also, for many of them, it's a great way for them to "clean" their money and make it "white". Why? Because if you use the actual price on the title deed, this turns their money into "white" funds they can justify where they got the funds. Most of them have recorded extremely low values on their title deeds when they purchased their property and selling them now for very high prices .. so in essense, if they declare the true price, all this money is justified so if they buy another property (which is usually the case) or they want to buy a house, or buy a property for their kids, etc. They can justify the purchase.

AFIP will start getting stricter as the government is hungry to add more tax intake. Most intelligent locals understand this and are being better about taxes.

Yes, in Europe there is a LOT of tax evasion. Look at countries like Italy. It does happen in a lot of countries but something as an American we are not accostomed to. In the USA they take the taxes directly out of our pay checks for the most part. Tax evasion is not typical in the USA. In the USA, we find LEGAL ways to reduce our taxes, defer our taxes or shelter our tax burden but most people don't EVADE taxes like in Argentina. Here it is normal for the locals.. They always have the excuse.. "why pay taxes? We will see no improvement...it will only go into the pockets of politicians".

You are 100% right Benco. In most civilized countries tax evading is looked upon as evil or wrong. In Argentina it's a way of life..normal. Today I was in a meeting with some high level accountants in Argentina. It was a round table discussion with some very senior level executives. I talked about a tax payment that you make with the salary that goes towards the retirement system and one of the accountants laughed and told me I had to be one of the few people that is paying this tax. That was a perfect example...you are looked at like a "sucker" if you pay your taxes here. Or that you are an idiot like you mentioned.

I pay a fortune in rental taxes as I declare the rental payments and I pay AFIP at the end of the year. In what i pay in rental taxes alone for my properties that I own it's much more than the average executive makes in Argentina in a year.. and when people find out I pay it....I always get the same reaction. IDIOT!

No one likes paying taxes. Shortly after University I started making a lot of money and I paid a lot of taxes. I always complained then one way it dawned on me that I'd rather make a LOT of money and pay a lot of taxes then make no money and pay no taxes. That is the philosophy I have on taxes. The day I became a resident of Argentina I was proud of this fact and I think paying taxes is just something that is necessary. I'm not saying I like it but it's something that in any civilized society is necessary.

Benco - you ask does it help them to fool the tax man? The problem is they aren't really "fooling the tax man". The tax man knows they are doing it and for the most part the tax man is doing the same thing and so are the tax man's friends and family. It's a vicious circle. So, if the tax man one day says, I'll start enforcing the taxes, his friends and family and really all of society say, "What the heck are you doing!!??".

That can really sum up the situation here.....
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Benco
New member
Username: Benco

Post Number: 21
Registered: 4-2007
Posted on Monday, October 15, 2007 - 6:15 pm:   Edit PostPrint Post

Sounds like a nice summary. And you are right, one can not say "fooling the tax man" when the tax man is part of the game.

To complete the summary maybe we should also discuss the view of some of the locals and how they justify what they do. It goes more or less like this:

In Argentina, you can not simply assume that the state uses its funds in a sensible way to serve the people. The state is one of the most corrupt in the world, and a significant fraction if not most of the tax money is lost in dark channels and leads to the enrichment of criminals. And even the money that is directed to good causes is often wasted in our inefficient and incompetent burocracy. Why should we treat the state better than the state treats us? And when everybody else cheats on taxes, and when AFIP effectively agrees to the common practice by not enforcing the laws, why should I be the only one who pays?

To a certain degree I understand this view. Look at the middle class, where many have effectively been expropriated during the last crisis. And also before that in the hyperinflation at the end of the eighties. And probably also before that, I don't know.
The state has simply lost its moral authority, and it will not regain it anytime soon.

Well, I will pay my taxes, and after all it is not a big deal for me. And maybe foolishly I hope that not all of the money will be wasted. But I understand that many locals whose hopes have been betrayed by the state so many times have a different view.

So basically I think the message is that any change will have to be a slow process of economic recovery, the state regaining trust, and a strengthening state getting better at enforcing the rules. A realistic timescale is probably many years or even decades. Unless there is another crisis, of course...
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 224
Registered: 5-2005


Posted on Tuesday, October 16, 2007 - 4:52 pm:   Edit PostPrint Post

Benco,

Yes, the locals do think like that but it's still not right. You can try to justify why you shouldn't pay but the sooner people stop thinking this way, the sooner things will change for a greater good. The problem is AFIP is just not efficient. They punish those that are actually paying taxes by trying to get more and more out of them instead of simply enforcing the laws to the whole of society.

It's a vicious circle unless people change their attitude. There was a good article in the paper the other day where the economic minister of Argentina admitted that they do NOT need to pass or create any NEW taxes. They simply need to enforce the current laws that they have.

I pay taxes and it IS a big deal for me. It's NOT easy making money in Argentina. In fact, I would argue with anyone that it's one of the most difficult places in the world to make money. So when I pay high taxes on the money I work hard to make I do consider it a big deal.

But still, I don't have the attitude that my money will be squandered. With that kind of attitude nothing would get done. I think locals use that excuse too often and it must change. There are improvements to the city and I can see it from year to year. Parks are getting improved, several streets repaired and teachers and other employees have received raises.

The thing that MUST change is the thinking of the everyday local..... They must think of how they can act today that will improve things for their children and their grandchildren. In business I've been pretty successful in the past both in the USA and Argentina. One reason why is I try to project and look well into the future and see how my actions today will affect tomorrow, next year and 5 years from now. If Argentina and other countries would do that, things would be better.

Although I'd have to say this isn't just a problem that is limited to Argentina. Look what is going on in the USA. The government is spending money like there is no tomorrow and really the ones that will suffer is our kids and grandchildren. What the government is doing is really not too much different than all these people that got into these sub-prime mortgages that they couldn't afford. They aren't worried about tomorrow or next year or 5 years from when they got the mortgage...they are only concerned about "today" but eventually you have to "pay up" and when that day comes there is chaos...
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patrick
New member
Username: Anuncioargentinacom

Post Number: 1
Registered: 10-2007
Posted on Friday, October 26, 2007 - 11:18 pm:   Edit PostPrint Post

So can I make an assumption that many obstacles will be overcomed once you recieve your DNI?
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 227
Registered: 5-2005


Posted on Saturday, October 27, 2007 - 2:16 pm:   Edit PostPrint Post

Patrick,

Well, I'm not sure what "obstacles" you are talking about. Honestly, if you don't need a DNI to work then really I wouldn't really say you would need to get a DNI. You can LEGALLY stay in Argentina by leaving every 90 days. This is what most foreigners do. I know many Americans that have lived here for up to 10 years doing this with no problems. Argentina is VERY generous with this issue unlike Brazil which puts severe limits on foreigners staying in the country.

Really, the only thing you might need a DNI for is to legally work. You can open a bank account these days without a DNI. Many banks don't allow you to open it with a CDI but some do if you have some good contacts. You can still buy medical insurance without having a DNI.

An advantage has been booking plane tickets as I pay less than I did when I didn't have my DNI a few years ago but that is no reason to get the DNI. I got it several years ago as I had to to legally work in Argentina. There aren't many "obstacles" though so you need to evaluate if you need to get it.

I do advise if you are working in Argentina to get a DNI so you are legal. One thing that annoys me to no end is foreigners that are working in Argentina illegally without getting their residency and not paying taxes. Those of us that are paying taxes (and they are VERY high) get severely annoyed/angry when we are paying taxes and others aren't.

I bought a car several months ago and I was told I had to have a DNI to purchase the car. I'm not sure if that is true or not or if I could have purchased it with just a CDI but they asked for my DNI when I bought the car and also to insure it. I don't use my car much during the week but I use it a lot on the weekends. So if you plan to buy a car then keep that in mind as well.

Other than that....if you are not working here...you probably don't need your DNI. JMHO. Good luck.
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WTMendoza.com
Junior Member
Username: Welcometomendoza

Post Number: 46
Registered: 7-2007


Posted on Saturday, October 27, 2007 - 2:37 pm:   Edit PostPrint Post

ABA, what about the issue of needing a DNI to expedite real estate transaction on the sell side? What are the current lead times in BA to get the approval from AFIP to sell? Thanks
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Arial
Intermediate Member
Username: Arial

Post Number: 106
Registered: 10-2006


Posted on Monday, October 29, 2007 - 6:16 am:   Edit PostPrint Post

An advantage has been booking plane tickets as I pay less than I did when I didn't have my DNI a few years ago

Roberto also mentioned this advantage in the past. I have a DNI but I still pay the same. What is the procedure for getting reduced air fares? Arial
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Roberto
Board Administrator
Username: Admin

Post Number: 1363
Registered: 12-2004
Posted on Monday, October 29, 2007 - 8:25 am:   Edit PostPrint Post

Arial, this should be the case.

I assume you are telling the agent or airline company you are a resident? If you continue having problems call Erna and she will tell you the correct flight prices for locals (4322-8147).
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movingtoargentina.typepad.com
Member
Username: Sapphos

Post Number: 98
Registered: 2-2006
Posted on Monday, October 29, 2007 - 9:10 am:   Edit PostPrint Post

Arial, Roberto is correct, you should be able to get discounted tickets as well as discounts to opera and other things that are priced higher for tourists. I don't know if you went in person or over the phone, but if you book online you'll always see the DNI section to fill out.

Definitely make sure you tell them you're a resident and complain about it, prices can be much higher otherwise.

Otherwise try Roberto's mother like he suggested she seems to be awesome :-)

Laura
Ebook Moving to and Living in Buenos Aires, Argentina
http://movingtoargentina.typepad.com
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 228
Registered: 5-2005


Posted on Monday, October 29, 2007 - 3:20 pm:   Edit PostPrint Post

Sorry Mendoza for the slow response. I'm on holiday in Europe traveling around. Yes, another HUGE benefit if you own real estate in Argentina if you have your DNI is you do not have to wait to sell. You do NOT need to apply for an AFIP permit to sell (like a foreigner does). I always recommend those that own multiple properties to get a DNI as it is good to protect if there are any changes in the laws that might only apply to foreigners.

I think the chances of this (law change only affecting foreigners) are slim to none. Most of my clients have a long-term investment horizon so I'm not sure getting a DNI makes sense for everyone but those that own more than one property I recommend it.

I've NEVER had a problem with selling properties for foreigners as long as they are up to date with their taxes (rental taxes and annual asset tax). The only problems I've seen are when a foreigner is not up to date or their accountant filed their tax wrong. My office takes care of our clients properties so we haven't had problems with AFIP when we go to sell. But if you are a foreigner and you didn't pay these taxes it can take up to 4-5 months to get the AFIP permit to sell. For most people the process takes 60 days or less. The quickest I've seen it take is about 35 days. Most it's about 60 days or so.

Again, my clients don't buy to "flip" so for them, they can wait the AFIP permit process. I've sold a lot of properties for clients and those that are up to date on their taxes aren't having problems. I HAVE been hired by foreigners to take care of it for them and they weren't up to date or their accountant filed their taxes wrong. AFIP requires you to pay back taxes and penalties and if your accountant filed the annual asset tax wrong, it must be amended and refiled. So, make sure your accountant knows what he/she is doing and specializes in foreigners. AFIP looks at every little detail and if you don't have everything perfect it takes a while. The best thing is to do things right from the beginning to avoid problems. I haven't had problems in Argentina following the strict laws of AFIP. It's really the only way to go here in Argentina if you are a foreigner.

Still, it's better to have your DNI. For example, I have some clients that listed properties and sold it right away. From start to finish it can take as little as 2 weeks to close. For example, I just sold a property last month. I listed it and had 3 offers right away at the asking price. From the time I got the offer to the final closing (Escritura) it was only about 2.5 weeks. I have my DNI so no problems at all to sell. I had a 1.5% transfer tax and that's it. No capital gains tax at all as I purchased as an individual and remember something that may or may not be of interest to you is you can have the buyer wire directly to your bank account in the USA or Europe (wherever you want it). It never has to enter Argentina and it's perfectly legal.

Cheers all.
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AnuncioArgentina.com
New member
Username: Anuncioargentinacom

Post Number: 2
Registered: 10-2007
Posted on Monday, October 29, 2007 - 10:12 pm:   Edit PostPrint Post

Thank you Apartmentsba!
- But would it also be perfectly legal if you are to buy an apartment as a foreigner to transfer the payment to the seller to an account outside Argentina(if the seller has one of course) so you dont have to bring the money in through an Argentine bank since they charge high fees?

- How could I set a company of my own, if I dont have a DNI? (I know that I need an accountant, lawer and so on) Could one alternative would be to have a partner who has a DNI, and he starts his company in his name, and then hires me or I enter the company as a co-owner, and by that be qualified to get a DNI.
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Arial
Intermediate Member
Username: Arial

Post Number: 107
Registered: 10-2006


Posted on Tuesday, October 30, 2007 - 2:57 am:   Edit PostPrint Post

Laura, the thought had crossed my mind that I WOULD like to meet Roberto's mother. I'd just like to meet the woman that brought him up. I can believe she is awesome because in my opinion, Roberto is awesome.

Is the reduced air fare only for intra-country flights? I flew Aerolineas Argentina last time I returned to the US and expected a discount but it was the same either way.

Arial
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Apartmentsba.com
Intermediate Member
Username: Saint

Post Number: 229
Registered: 5-2005


Posted on Tuesday, October 30, 2007 - 4:47 am:   Edit PostPrint Post

AnuncioArgentina - You are welcome. Yes, it's perfectly legal to buy an apartment as a foreigner (not holding a DNI) and pay to an offshore (outside of Argentina bank). However, you will find if you are buying from them almost NONE of them will allow this. Why? Because they have a high fee to bring the money into Argentina. It's easier for them if you bring it in cash and they them as they have a need for that cash. Most locals are selling real estate to buy another piece of real estate, land or have some need for the cash so really they need the cash and it does them no good to get the cash outside of Argentina as they must pay a high fee to get it in.

It is MUCH easier to wire offshore. Why? Because you don't have to provide the Central Bank of Argentina with so much paperwork. 99% of the purchases I do these days is still via the Argentina Central Bank as locals refuse to allow buying unless it's cash. However, when the seller is a foreigner I've negotiated to wire to their offshore account. Even those that plan to purchase something else with the funds in Argentina (which is most of them). I still negotiate to allow the buyer to wire to their offshore account and they will add on the same fee the Central Bank would charge. That way it makes the process quicker.

The Central Bank requires copies of passports, tax returns, bank statements or stock statements if you are liquidating funds. They are careful to make sure that the funds are legitimate which I think is a good idea.


--- As to your question about setting up a company of your own. You really should talk to a lawyer here in Argentina and find out with your situation what type of set up is the best for you (monotributo, SRL vs. SA). Each has advantages and disadvantages. You can set up a corporation without a DNI but you will need to have a local "partner" with a DNI. Also a majority of your board of directors needs to be Argentines with a DNI so keep that in mind. It's NOT a good idea to let a local partner set up a company for you unless you trust them with your life. Things are very complex here so I suggest you consult a lawyer (a very good one). You will find here in Argentina without a good lawyer(s) and accountant(s) you will get eaten alive. They will be your two "best friends" in Argentina.

I took 2 years to study most of the intricate laws here before I moved here and that is paying off now. You will find that things are totally inefficient here in the corporate, legal and financial world here in Argentina. Without skilled people on your side, you will totally be lost. Sometimes even getting legal/financial advice you are still lost because you will get conflicting or wrong advice. Use someone that specializes in foreigners.

Ariel - I am not 100% sure but I believe the discount is only for intra-country flights within Argentina. I could be wrong. I only fly American Airlines for international flights for the most part so I'm not sure. I do fly quite a bit within Argentina and my flights have always been a little cheaper when buying with my DNI. Also, I've booked hotels cheaper as well. Get a good travel agent. Roberto's mother sounds like an excellent option. Best.
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DAN
New member
Username: Crazygaucho

Post Number: 23
Registered: 7-2006
Posted on Tuesday, October 30, 2007 - 7:27 am:   Edit PostPrint Post

I'm glad the the DNI issue came out, so I'd see someone posting requirement to get one.
gee it wasn't that strange after all!
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Benco
New member
Username: Benco

Post Number: 25
Registered: 4-2007
Posted on Wednesday, November 21, 2007 - 3:45 pm:   Edit PostPrint Post

I can´t believe what they have done to the impuesto a los bienes personales!

www.lanacion.com.ar/economia/nota.asp?nota_id=9632 44

When the new rates were published before the elections, I was assuming these are marginal rates, i.e. you pay a certain tax rate up to a threshold, and then a higher rate only for your assets above the threshold. This is the normal, standard way to implement a progressive tax. But not so in Argentina. The rates always apply to all your assets! This is a primitive and inequitable law, that leads to huge jumps of your tax duty at each threshold.

You declare 304999 pesos and pay nothing, declare 2 pesos more and your tax is 1525 pesos per year. Even bigger jumps occur at the higher thresholds. Obviously people will declare lower numbers when they are close to a jump, and you can´t even blame them morally since the law is so unjust.

It probably has to do with electoral tactics, publishing favorable rates before the elections and then revealing the nasty details afterwards. Everybody here has to cope with loads of bad laws, but I was hoping that at least the new laws would be made in a better way. Unfortunately this is not the case.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 265
Registered: 5-2005


Posted on Saturday, December 15, 2007 - 5:13 pm:   Edit PostPrint Post

Hi Benco,

Yeah, the way they figure these taxes is pretty insane here. It especially hurts for those of us in the highest tax bracket here or those that hold a lot of assets in Argentina. For those that don't have a lot of assets in Argentina it's not a factor but if you own a lot of assets in Argentina the way they figure the tax is a big negative.

Also, all foreigners that do NOT have residency here in Argentina and own assets including apartments beware that they also raised the asset tax for all of you. The tax before was approximately about 0.75% per year but this new tax bill effectively immediately the rate has been raised to about 1.25% of your total assets so keep this in mind when you are paying your asset taxes (impuesto a los bienes personales). Also, make sure your accountant is doing your taxes properly. Lately I've been getting a LOT of emails and phone calls from foreigners trying to sell their properties and AFIP is making them amend their taxes as their accountants prepared them as if they were local citizens instead of foreigners. For these people they must amend their taxes and pay any penalties and interest payments so make sure you do it right the first time.

As I mentioned before many times, foreigners don't get the exemptions that locals get so make sure your accountant specializes with foreigners or you could have issues when you go to sell your property.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 299
Registered: 5-2005


Posted on Saturday, January 05, 2008 - 5:55 pm:   Edit PostPrint Post

Actually for those of you that are like me and like to see the actual law #'s here is just part of it below. It's VERY long (almost never-ending). Keep in mind it's in Spanish. Just remember that when you go to sell your property AFIP will review everything very carefully and make sure that you have been paying your property taxes properly. I've sold lots of properties and never had problems. However, I get contacted on an almost daily basis by many foreigners that had their property tax prepared wrong by their accountant.

Many NEVER paid the tax and those that did most of their accountants filed it as a local instead of a non-resident. Then AFIP made them re-file it properly, pay back taxes and penalties so make sure it's being done properly or it will severely slow things down when you go to sell the property.




Ley Nº 26317

DATOS DE PUBLICACIÓN
Fecha de Promulgación: 07 de Diciembre de 2007
Boletín Oficial: 10 de Diciembre de 2007
ASUNTO
Impuesto sobre los Bienes Personales. Modificación de la Ley Nº 23.966, Título VI, texto ordenado en 1997 y sus modificaciones.
GENERALIDADES
________________________________________
TEMA
IMPUESTO SOBRE LOS BIENES PERSONALES-EXENCIONES IMPOSITIVAS-REDUCCION DE ALICUOTA
El Senado y Cámara de Diputados de la Nación Argentina reunidos en Congreso, etc. sancionan con fuerza de Ley:
SANCIONA:
________________________________________



Artículo 1:
ARTICULO 1º - Incorpórase como inciso i), del artículo 21, de la Ley Nº 23.966, Título VI, de Impuesto sobre los Bienes Personales, texto ordenado en 1997 y sus modificaciones, el siguiente:
i) Los bienes gravados cuyo valor en conjunto, determinado de acuerdo con las normas de esta ley, sea igual o inferior a PESOS TRESCIENTOS CINCO MIL ($ 305.000).
Cuando el valor de los bienes supere la mencionada suma quedará sujeto al gravamen la totalidad de los bienes gravados del sujeto pasivo del tributo.
Modifica a:
• Ley Nº 23966 (T.O. 1997) Articulo Nº 21 (Inciso i), incorporado)
Artículo 2:
ARTICULO 2º - Sustitúyese el párrafo tercero del punto 4 en el inciso a) del artículo 22 de la Ley Nº 23.966, Título VI, por el siguiente:
El valor a computar para cada uno de los inmuebles, determinado de acuerdo con las disposiciones de este inciso, no podrá ser inferior al de la base imponible -vigente al 31 de diciembre del año por el que se liquida el presente gravamen- fijada a los efectos del pago de los impuestos inmobiliarios o tributos similares o al valor fiscal determinado a la fecha citada. Este valor se tomará asimismo en los casos en que no resulte posible determinar el costo de adquisición o el valor a la fecha de ingreso al patrimonio. El valor establecido para los inmuebles según las normas contenidas en los apartados 1. a 4. del primer párrafo de este inciso, deberá únicamente incluir el atribuible a aquellos edificios, construcciones o mejoras que hayan sido tomados en consideración para determinar la aludida base imponible. Aquellos no tomados en cuenta para dicha determinación, deberán computarse al valor establecido según los mencionados apartados.
Modifica a:
• Ley Nº 23966 (T.O. 1997) Articulo Nº 22 (Inciso a), punto 4, párrafo tercero, sustituido)
Artículo 3:
ARTICULO 3º - Derógase el artículo 24 del Título VI de la Ley Nº 23.966.
Deroga a:
• Ley Nº 23966 (T.O. 1997) Articulo Nº 24
Artículo 4:
ARTICULO 4º - Suprímase en el primer párrafo del artículo sin número incorporado a continuación del artículo 25 de la Ley Nº 23.966, Título VI, la expresión "no siendo de aplicación en este caso el mínimo exento dispuesto por el artículo 24".
Modifica a:
• Ley Nº 23966 (T.O. 1997) Articulo Nº 25 (Expresión en el primer párrafo, suprimida)
Artículo 5:
ARTICULO 5º - Sustitúyese el primer párrafo del artículo 25 del Título VI de la Ley Nº 23.966 por el siguiente:
El gravamen a ingresar por los contribuyentes indicados en el inciso a) del artículo 17, surgirá de la aplicación, sobre el valor total de los bienes gravados por el impuesto, excluidas las acciones y participaciones en el capital de cualquier tipo de sociedades regidas por la Ley Nº 19.550 (t.o. 1984 y sus modificaciones), con excepción de las empresas y explotaciones unipersonales, de la alícuota que para cada caso se fija a continuación:
Valor total de los bienes Alícuota

gravados aplicable

Más de $ 305.000 a 0.50%

$ 750.000

Más de $ 750.000 a 0.75%

$ 2.000.000

Más de $ 2.000.000 a 1.00%

$ 5.000.000

Más de $ 5.000.000 1.25%

Modifica a:
• Ley Nº 23966 (T.O. 1997) Articulo Nº 25 (Primer párrafo, sustituido)
Artículo 6:
ARTICULO 6º - Sustitúyese, en el primer párrafo del artículo 26 de la Ley Nº 23.966, Título VI, la expresión "SETENTA Y CINCO CENTESIMOS POR CIENTO (0,75%)", por la expresión "UNO CON VEINTICINCO CENTESIMOS POR CIENTO (1,25%)".
Modifica a:
• Ley Nº 23966 (T.O. 1997) Articulo Nº 26 (Expresión del primer párrafo, sustituida)
Artículo 7:
ARTICULO 7º - Las disposiciones de la presente ley serán de aplicación para el período fiscal 2007 y siguientes.
Artículo 8:
ARTICULO 8º - Comuníquese al Poder Ejecutivo.DADA EN LA SALA DE SESIONES DEL CONGRESO ARGENTINO, EN BUENOS AIRES, A LOS VEINTIUN DIAS DEL MES DE NOVIEMBRE DEL AÑO DOS MIL SIETE. -REGISTRADA BAJO EL Nº 26.317 -
________________________________________

THEN


"...Artículo 26 Texto vigente según Ley Nº 26317/2007:

Bienes situados en el país pertenecientes a sujetos radicados en el exterior

ARTICULO 26. - Los contribuyentes del impuesto a la ganancia mínima presunta, las sucesiones indivisas radicadas en el país y toda otra persona de existencia visible o ideal domiciliada en el país que tenga el condominio, posesión, uso, goce, disposición, depósito, tenencia, custodia, administración o guarda de bienes sujetos al impuesto que pertenezcan a los sujetos mencionados en el inciso b) del artículo 17, deberán ingresar con carácter de pago único y definitivo por los respectivos bienes al 31 de diciembre de cada año, el UNO CON VEINTICINCO CENTESIMOS POR CIENTO (1,25%) del valor de dichos bienes, determinado con arreglo a las normas de la presente ley.

Cuando se trate de inmuebles ubicados en el país, inexplotados o destinados a locación, recreo o veraneo, cuya titularidad directa corresponda a sociedades, empresas, establecimientos estables, patrimonios de afectación o explotaciones domiciliados o, en su caso, radicados o ubicados en el exterior, se presumirá, sin admitir prueba en contrario, que los mismos pertenecen a personas físicas o sucesiones indivisas domiciliadas o, en su caso radicadas en el país, sin perjuicio de lo cual deberá aplicarse en estos casos el régimen de ingreso del impuesto previsto en el párrafo anterior.

Lo dispuesto en el primer párrafo no será de aplicación para los bienes que se detallan a continuación:

a)Los títulos, bonos y demás títulos valores emitidos por la Nación, las provincias o municipalidades.

b)Las obligaciones negociables previstas en la Ley N° 23.576.

c)Las acciones y participaciones en el capital de cualquier tipo de sociedad, incluidas las empresas y explotaciones unipersonales.

d)Las cuotas partes de fondos comunes de inversión.

e)Las cuotas sociales de cooperativas.

Cuando la titularidad directa de los bienes indicados en el párrafo anterior excepto los comprendidos en su inciso a) y las acciones y participaciones en el capital de las sociedades regidas por la ley 19.550, texto ordenado en 1984 y sus modificaciones, corresponda a sociedades, cualquier otro tipo de persona de existencia ideal, empresas, establecimientos estables, patrimonios de afectación o explotaciones, domiciliados o, en su caso, radicados o ubicados en el exterior, en países que no apliquen regímenes de nominatividad de los títulos valores privados, se presumirá, sin admitir prueba en contrario que los mismos pertenecen a personas físicas o a sucesiones indivisas domiciliadas, o en su caso, radicadas en el país, sin perjuicio de lo cual deberá aplicarse en estos casos el régimen de ingreso previsto en el primer párrafo de este artículo".

La presunción establecida en el párrafo anterior no será de aplicación cuando los titulares directos a que se refiere el mismo sean compañías de seguros, fondos abiertos de inversión, fondos de pensión o entidades bancarias o financieras cuyas casas matrices estén constituidas o radicadas en países en los que sus bancos centrales u organismos equivalentes hayan adoptado los estándares internacionales de supervisión bancaria establecidos por el Comité de Bancos de Basilea.

No corresponderá efectuar el ingreso establecido en este artículo cuando su importe resulte igual o inferior a doscientos cincuenta pesos ($ 250).

Los responsables obligados al ingreso del gravamen tendrán derecho a reintegrarse el importe abonado, incluso reteniendo y/o ejecutando directamente los bienes que dieron origen al pago.

La reglamentación establecerá los mecanismos mediante los cuales se evitará la doble imposición en el país en los casos en que sociedades del exterior sean titulares de bienes comprendidos en este artículo siendo sus accionistas residentes en el país u otros supuestos de doble imposición que pudieran presentarse.

La alícuota establecida en el primer párrafo se incrementará en un ciento porciento (100 %) para aquellos bienes que encuadren en las presunciones previstas en este artículo.

No regirán las disposiciones establecidas en este artículo cuando resulten de aplicación las contenidas en el sixth (won't let me type 6th in spanish on this website) párrafo del inciso h) del artículo 2° de la Ley de Impuesto a la Ganancia Mínima Presunta.

Modificado por:

Ley Nº 26317 Articulo Nº 6 (Expresión del primer párrafo, sustituida)..."

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