Argentine taxes

[from the AFIP (Administración Federal de Ingresos Públicos) website]

Foreigner Registration before the AFIP

Tax Identification Number – CUIT

The Tax Identification Number –CUIT- is a numerical code with which AFIP unequivocally identifies taxpayers. The following issues must be considered in order to obtain a CUIT:

The application form for registration will be made at AFIP’s agency (Search available only in Spanish) which corresponds to your fiscal domicile. If taxpayers or other responsible persons are domiciled abroad and do not have any representatives within the country or the domicile of those representatives cannot be established, it will be considered as fiscal domicile the place within the Argentine Republic in which such representatives have their main business or working or their main source of resources or subsidiarily, the place of their last residence.

To obtain the CUIT:

Individuals and undivided estates: F 460/F (Only available in Spanish)

Legal Persons: The application form for registration will be made by sending electronically the tax return created with the Legal Persons Registration Module computer application programme.

The computer application programme requests information related to:

Identificatory Data: company name, legal domicile and other related data.

Data related to the members of the company: authorities, capital share or partners.

Data related to business: tax related data, activities and fiscal domicile.

Once the data requested by the computer application programme is entered, the file for the electronic transfer of data must be created and the form N° 420/J must be printed.

The file created by the computer application programme must be transferred to AFIP by the solicitor:

With Fiscal Code: using the Tax Return and Payment Submission service from the AFIP web site.

With Banking Code: at the web site www.linkpagos.com.ar, www.pagomiscuentas.com, www.interbanking.com.ar (Only available in Spanish) or at the web site of the banks authorized for such purpose.

2 (two) copies of the acknowledgement of receipt, containing the verification and transaction number must be printed.

Taxes Registration

The taxes registration must be carried out at www.afip.gov.ar by entering the Fiscal Code into the Servicio Padrón Único de Contribuyentes (Unique Taxpayers’ Roll Service) – Alta de Impuestos y/o Regímenes (Taxes and/or Regimes Registration).

Tax on Personal Assets

Which is the treatment applicable to the goods situated in the country own by individuals domiciled abroad?

Natural or legal persons domiciled in Argentina who have the condominium, possession, use, enjoyment, disposal, deposit, tenancy, custody, administration or guardianship of goods subjected to tax owned by individuals domiciled abroad will have to pay in the form of a unique and definitive payment for the respective goods on December 31 of every year, 0,75 % of the value of the value of the above mentioned goods.

In the case of real estate located in Argentina which is unexploited or destined to lease, recreation or summer place, directly owned by corporations, companies, permanent establishments, goods destined to the business activity which are domiciled or, where appropriate, situated abroad, the assets will be presumed, without admitting evidence to the contrary, to belong to natural persons or undivided estates, or located in Argentina, where appropriate, in which cases the applicable aliquot will be of 1.5 %.

Income Tax

How should resident persons in Argentina pay taxes?

Resident persons in Argentina, pay taxes on the whole of their profits obtained in the country or abroad. They are able to calculate as a partial payment of the income tax the sums really paid by analogous taxes, on their activities abroad, up to the limit of the increase of the fiscal obligation originated by the incorporation of the income obtained abroad.

How should a foreign beneficiary pay taxes in Argentina?

Non resident persons pay taxes exclusively on their argentine source incomes. In this regard, a foreign beneficiary will be the person who obtain his/her incomes directly or through proxies, agents, representatives or any other mandatory in the country and the person who obtain his/her incomes in Argentina but he/she cannot prove permanent residence in said country. In the cases in which inability to withhold exists, said incomes will be at the expense of the payer entity, without prejudice of its rights of demanding the refund on behalf of the beneficiaries. When net incomes are paid of any category to societies, companies or any other foreign beneficiary the person who pays said incomes should withhold and pay before the Federal Administration of Public Revenues ( AFIP), in the form of a unique and definitive payment, 35 % of such incomes. For such purpose, dispositions set forth in the General Resolution 739/99 shall be fulfilled. (Only available in Spanish)

What is understood by “argentine source income”?

In principle, argentine source incomes are those that arise from goods situated, placed or used for an economic purpose in Argentina, from performance in Argentina, of any act or activity capable of producing an income or from events occurring within Argentine territory, without bearing in mind either nationality, domicile or residence of the owner or of the parties that intervene in the operations, or the place of celebration of the contracts.

In the case of foreign beneficiaries, in what cases are the middlemen, administrators or mandataries obliged to withhold income tax?

Middlemen, administrators or mandataries will have to withhold the income tax for the payments abroad that they made on behalf of the persons that order said payments. Likewise, they will have to apply and pay the withholdings for the payments made for their own transactions. They are exempt from withholding when the payers of the revenue to the foreign beneficiaries have carried out the withholding or they are not paying concepts that are subject to withholding.

When the total or partial payment of the income tax to is at the expense of the person that pays the revenue, he/she shall credit sufficient funds for paying the respective tax, being the intermediary, administrative or mandatory entity obliged not to making the draft effective until it happens.

When a natural person is considered as a resident person in Argentina

Tax legislation considers residents in Argentina the following people:

Argentine natural persons, native or naturalized, except for those who lost the resident status.

Foreign individuals who obtained their permanent resident status in the country or who, without having done so, have legally been in the country for a twelve month period by means of temporary authorizations. In this regard, temporary absences that are less than 90 days, working or non-working days, within every period of 12 months, shall not disrupt the continuity of such permanence in the country. Likewise, individuals who failed to obtain the Argentine permanent resident status and whose permanence in said country is due to reasons that do not imply an intention of habitual permanence, shall be able to account for the underlying reasons. The above mentioned communication shall be submitted before the A.F.I.P. after 30 days of the fulfillment of the term of 12 months of stay in the country.

How to pay my taxes

In order to pay your tax obligations, you can find the information about the places authorized to such effect and the diverse methods of payment. Accede to this information selecting the Tax or Regime.

Income Tax and Tax on Personal Assets

Large Taxpayers: Pay through Banking Transfer generation of VEP – electronic ticket ( Only available in Spanish)

Rest of Taxpayers: They can pay in cash, by cashier’s check, Financial Check and cheque Cancelatorio*, Banking Transfer, Generation of VEP - Electronic Ticket- (Only available only in Spanish) cash dispenser, automatic bank debit or credit card.* Kind of check that must be issued when the amount of money to be paid is greater than $ 10.000.- ( pesos ten thousand)

export tax > income tax?

[from MercoPress, 27 June 2011]

Argentina’s soy bean crop will represent 8bn USD in levies for the Treasury

Soy export taxes for the 2010/2011 crop will represent 8 billion US dollars for the Argentine Treasury compared to 6.3bn in the previous season, according to estimates from the country’s Ministry of Agriculture and Livestock.

“Revenue from export duties for the 2010/2011 harvest will be in the range of 8.041 billion USD”, said the ministry in its portal.

This year’s soy crop is estimated to be between 49.6 and 50.4 million tons, which is significantly less that the record 55 million tons of the 2009/2010 season.

Based on international prices the ministry estimated the value of the crop to be in the range of 25 billion US dollars.

In 2010, soy revenue totalled 6.3 billion US dollars, a main source of resources for the Treasury.

“The difference is based on the fact that the oilseed price in Chicago, which acts as a world reference for global trading soared 60% compared to a year ago”, added the official portal.

The harvest is estimated to have covered 95% of the area planted, 18.7 million hectares. The provinces of Buenos Aires and Cordoba are the main soy areas of Argentina.

The Ministry of Agriculture estimates Argentina will export this year 5.587 billion US dollars of soy beans, 10.6 billion of soy flour and 8.45bn of soy oil.

The harvesting of soy beans has partially delayed corn collecting but has already reached 80% of the 4.3 million hectares planted.

Argentina is the world’s second exporter of corn and according to official estimates total production should reach 20.9 million tons.

Argentina’s global crop for the 2010/11 agriculture year which includes oilseeds and other grains should total 100.64 million tons. The figure was first released last March.

Argentina is the world’s leading exporter of soy-oil, third of soy beans, second of corn and fourth of wheat.

hanging out in Panama

What a trip to meet so many La Estancia folks in Panama at the Simon Black conference: Peter W, Charles V, John U, Jane & Kent R, Jim R, John & Margaret P, Deborah D, Reg & Tonye C., Carol C, Forrest B, plus Mike & I. Maybe a few more I don't know yet.

So far the conference has been good talks, good folks, good food. Hope we find answers to some of our questions.

no more financial shenanigans

[from Associated Press, 3 February 2011]

Argentine money cop means business

BUENOS AIRES, Argentina (AP) — In this society where tax evasion is the rule, corruption is common and white-collar crimes suck as much as $20 billion out of the country each year, a supercop of sorts has just been given new power to examine the books of the rich and powerful — from politicians and judges to union and business leaders, even foreign diplomats.

Under increasing international pressure to crack down on money laundering, President Cristina Fernandez has empowered a financial watchdog to follow the money, issue fines and confiscate ill-gotten cash.

The challenge is nothing short of changing the culture of people who feel they're above the law, said Jose Sbatella, president of the Financial Information Unit (UIF), in an interview with The Associated Press.

"We know we're going to have some problems with certain sectors that have been operating in the shadows," said Sbatella. "What we're asking for is a great leap forward in following the rules. If this doesn't happen before October, frankly we will have failed."

October is when the international Financial Action Task Force, which sets global regulatory standards, will consider whether Argentina belongs on its high-risk list. Putting it there could increase the costs of doing business and slow the economy. The task force has suggested nearly a thousand changes to better control flows of illegal money, and is watching closely for results.

Much of the pressure comes from the United States. A 2009 U.S. Embassy report released by WikiLeaks said "the near complete absence of enforcement coupled with a culture of impunity and corruption make Argentina ripe for exploitation by narcotraffickers and terrorist cells."

But Sbatella said laundering of Colombian and Mexican drug profits isn't Argentina's main problem; it's tax evasion, which he said robs the government of revenues it needs to establish a more equal society.

"Our main problem is the outflow of money to fiscal paradises. The most absurd is that the (U.S.) state of Delaware is the first destination for Argentine money, most of it from tax evasion." The state's regulations mask corporate ownership, he complained. "We don't know who they are. And then the money shows up elsewhere as clean."

Sbatella has issued 22 new rules in recent days, and would get even more power if a proposed money laundering law gets through the opposition-controlled congress this year.

Come April, much of Argentine society will be responsible for reporting suspicious transactions by people they do business with, with fines of up to 10 times the money involved if they don't comply.

Employees of financial institutions and government agencies, casinos, currency exchange houses, and issuers of travelers checks and credit and debit cards must make systematic reports to the UIF.

Political donations of more than 50,000 pesos ($12,500) must be reported this presidential election year, along with any suspicious transactions involving "publicly exposed people" such as lawmakers, government ministers and judges, leaders of unions and political parties, executives of businesses, cooperatives and charities, functionaries of foreign governments and their direct relatives and housemates.

"All these rules close holes, spaces where sources of money are being hidden. Prevention — the factor that the task force says we haven't had — is already being put to work in the streets," Sbatella said.

Sbatella says his unit is already empowered to follow laundered money and confiscate it — powers his predecessors never asserted.

The proposed law would tighten Argentina's definition of money laundering, making it a crime even if a person is not involved in the underlying illegal activity, and punishing "self-laundering" by the original criminals.

It also would give the UIF direct access to confidential tax information without needing a judge's permission. Individuals and businesses could no longer invoke bank secrecy or contractual confidentiality agreements to block Sbatella's investigators.

This deeply concerns the president's political opponents, who want the agency to be independent. But Sbatella, an economist from the president's leftist branch of the Peronist party, insists he won't use his powers for political advantage.

"We're collaborating in prominent court cases wherever money laundering has been detected," he said, citing investigations that strike close to the presidency: the illegal enrichment probe of a former Cabinet minister, the unclaimed $800,000 from a suitcase carried by Venezuelan power brokers, and donations to the governing party from the so-called "medicine mafia."

Real estate investments — a key method of laundering money — would come under scrutiny; notaries, brokers and others would have to identify their clients and the amounts involved. This threatens Argentines who have long used real estate as a means to protect wealth both from inflation and tax collectors. Nearly 90 percent of houses and apartments are bought and sold with cash, and the amounts involved are often falsely reported.

While Sbatella deserves credit for taking bold new steps, Argentine money laundering expert Ricardo Tondo said, the system depends too much on self-reporting by people who will fear for their careers or even lives if they tattle on their associates and clients.

People need to fear jail for failing to report even attempts at laundering so that investigators can unravel powerful criminal networks, Tondo said.

"I think he believes what he says, and he's taking steps that seem good to those who don't know anything," Tondo said. "But for those who know how money laundering works, they're dying of laughter. They're laughing in their faces, these criminals. Because all of this doesn't close the loopholes."

Uruguay: no tax on foreign residents

good news about Uruguay:

"no taxes on assets owned abroad by foreign residents of Uruguay"

Argentina taxes on property sales

A reminder that the tax situation differs in Argentina for property sales based on how you hold title. This is from the March 2010 Harvest Celebration bulletin.

Are there any Argentine transfer taxes if I decide to sell?

As an individual a one time 1.5% tax is payable on the sales price. If you own your property through a foreign corporation, you will pay a tax equivalent to ordinary income tax, of 35% for the fiscal results of the corporation, on any appreciation earned. Relief is available for one calendar year when purchasing another property.

There are no Argentine capital gains taxes payable by an individual, on a sale.