ARGENTINA Law and Practice Contributed by: Juan McEwan and Agustín Lacoste, McEWAN
• trusts, private interest foundations and similar structures established or domiciled abroad; • companies without fiscal personality; and • companies with fiscal personality. Trusts and Private Interest Foundations The ITL establishes that fiscal transparency will apply to trusts, private interest foundations and similar structures if an Argentine tax resident exercises con - trol over the structure – ie, when there is evidence that the assets remain in its possession and/or are admin - istered either directly or indirectly by the tax resident – in the following cases, among others: • 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 individuals will be subject to PAT on assets held both in and outside Argentina as of 31 December 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 1.5%. 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 1.5 Taxation of Real Estate Owned by Non-Residents and Non-Citizens , for real estate property, PAT is also applicable to non-resident indi - viduals exclusively on assets held in Argentina. To ensure that the tax is collected, 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 - ident individuals or entities. The company is responsi - ble 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, for example, inheritances, legacies or gifts. According to the law, the following are regarded as liable.
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