ARGENTINA Law and Practice Contributed by: Juan McEwan and Agustín Lacoste, McEWAN
• revocable trusts or foundations; • when the settlor/founder is also a beneficiary; and • when the settlor/founder has decision-making power, directly or indirectly, to invest or divest assets. If a trust/private interest foundation does not meet these characteristics, it will not be considered trans - parent for tax purposes. Personal Asset Tax – Amendments to Legislation The criteria according to which an individual falls with - in the scope of personal asset tax (PAT) changed five years ago from domicile to residency under the terms and conditions foreseen in the ITL. Law 27.667 (published in the Official Gazette on 31 December 2021) increased the value of the standard tax-free threshold from ARS2 million to ARS6 million. The law also provided that this value will be adjusted annually based on the consumer price index ( índice de precios al consumidor , or IPC). The IPC adjustment began to apply from the 2022 tax period. However, on 28 June 2024, Law 27.743 introducing modifications to the PAT was approved by Congress. For the tax period 2023, the tax-free threshold was set at ARS100 million. Therefore, Argentine-resident indi - viduals will be subject to PAT on assets held both in and outside Argentina as of December 31st each year. Unlike the previous regulations, this new law introduc - es a single progressive tax rate for all assets above the threshold (located in Argentina and abroad), ranging from 0.5% to 1.50%. Real property in which the taxpayer lives ( casa hab- itación ) – or in which the deceased used to live in the case of undivided estates – will not be taxable when its value is equal to or less than ARS350 million. The taxable base is the market value of such assets and, apart from a few exceptions, debts are not deductible. As mentioned in 1.4 Taxation of Real Estate Owned by Non-Residents , for real estate property, PAT is also applicable to non-resident individuals exclusively on assets held in Argentina. To ensure that the tax is col - lected, the law provides a method of substitution that
imposes the obligation to file the tax return and pay the tax on the local resident that administers the asset on behalf of the foreigner (“substitute taxpayer regime”). Those individuals must designate a local substitute taxpayer to pay the tax assessed on property located in Argentina, applying a fixed tax rate of 0.5%. A 0.5% tax rate applies on the net equity value of Argentine companies owned by resident and non-res - idents individuals or entities. The company is respon - sible for filing the tax return and paying the applicable tax (“substitute taxpayer regime”). Expatriates residing in Argentina on work assignments for a period not exceeding five years are considered non-residents (Section 123 (c) of the ITL) and are therefore taxed exclusively on their Argentine situs assets. The employment reasons that require Argen - tine residence must be duly proven. Gift/Estate Tax In Argentina there is neither federal gift tax nor inher - itance/estate tax. A gift tax/estate tax ( impuesto a la transmisión gratuita de bienes , or ITGB) is only appli - cable for Buenos Aires Province ( Provincia de Buenos Aires , or PBA). ITGB is assessed on any increase in an individual’s wealth due to the receipt of a gratuitous transfer of assets from acts including inheritances, legacies and gifts. According to the law, the following are regarded as liable. • Natural persons and legal entities domiciled within PBA that benefited from the gratuitous transfer are liable. In this case, the tax applies to the total sum of the assets received by that person or entity. • Natural persons and legal entities domiciled outside PBA are liable when the increase in their wealth comes from a gratuitous transfer of assets located within PBA (PBA situs assets). In this case, the tax applies only to the amount of the increase derived from the transfer. The PBA Tax Code considers that the shares and equity interests of a company registered outside PBA are a PBA situs asset in the proportion of those assets held by the company that are situated in PBA (eg, a company incorporated and registered in the Autonomous
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