ARGENTINA Law and Practice Contributed by: Juan McEwan and Agustín Lacoste, McEWAN
City of Buenos Aires having real property in PBA). For tax assessment purposes, the shares will be valued according to the net asset value of the lat - est closed financial statements. The tax-free allowance when the beneficiary is the spouse, child or parent of the transferor is ARS8,488,486. If the amount received exceeds this sum, the tax will be applied to the difference. In any other cases, the tax-free allowance is ARS2,038,752. The applicable tax rates vary between 1.6% and 9.51%, depending on the value of the property trans - ferred and the relationship between the transferor and the transferee of the property. The rates are based on the assessment value or the market value (whichever is higher). The PBA Tax Code (Section 320 of Provincial Law 10.397) provides that certain heirs (surviving spouse, ascendants and/or descendants) will be exempt from ITGB when they receive any of the following assets mortis causa: • a homestead ( vivienda familiar ) in accordance with Section 244 of the Argentine Civil and Commercial Code ( Código Civil y Comercial de la Nación , or CCCN); • real property entirely destined for the housing of the decedent or their family, provided it is the only property and its assessed value does not exceed ARS1,154,400 (for the 2025 fiscal period); and • a company, whatever its form of organisation, pro - vided the valuation of its assets does not exceed the amount established by law (ARS153,276,715 for the 2025 fiscal period) and as long as the activity is effectively maintained in the five years following the death of the decedent – otherwise, they must pay the tax reassessment for the remain - ing years to obtain the benefits of the exemption (although this exemption will not apply when the income of the company derived from rental and financial assets exceeds ARS6,145,618 (for the 2025 fiscal period)). Even though there are no similar taxes in the rest of the provinces (Entre Ríos Province abrogated this tax on 22 December 2018), it cannot be ruled out that oth -
er provinces may introduce similar taxes in the future or that an inheritance is enacted at a federal level. Every now and then these possibilities are mentioned. 1.2 Exemptions See 1.1 Tax Regimes (Gift/Estate Tax). 1.3 Income Tax Planning There are no special provisions in the ITL that provide a step-up in the value of assets to their fair market value. 1.4 Taxation of Real Estate Owned by Non- Residents Non-residents are subject to PAT on all property locat - ed in Argentina as of December 31st each year. To col - lect this tax, the law provides a method of substitution that is imposed on the local resident who administers the asset owned by the foreign national. Such person must submit and pay the tax return (“substitute tax - payer regime”). The applicable fixed tax rate is 0.5% and there is no tax relief allowed. In addition, provincial real estate tax must be paid annually, in one or several instalments in the months of February, April, June, August and October. By way of example, the tax in PBA comprises a fixed amount (from ARS455 to ARS700,551) and the tax rate to be applied on the surplus of the established minimum of the scale goes from 0.028% to 2.363%, depending on the type of property and the fiscal valuation carried out by the Land Registry and Territorial Information Service. If the property is rented out, the tenant should with - hold tax at an effective rate of 21% (the ITL presumes that 90% of the rent is the net income and applies a 35% tax rate). If the property is to be rented for com - mercial purposes (ie, it is not to be the tenant’s home), VAT would apply at a rate of 21% of the rental value. As for PAT, the law provides a substitution method for the collection of this tax, which is imposed on the local resident designated by the non-resident for this purpose. Such person must submit and pay the tax return. As regards onerous transfers of real estate, PIT applies to the extent that the real estate was acquired by the
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