Argentina – Taxpayers’ Wealth May Be Subject to Mandatory and Extraordinary Contribution

Argentina – Taxpayers’ Wealth May Be Subject to New Tax

Argentina’s Congress is studying a new tax that would apply to wealth above ARS 200,000,000 owned by resident and nonresident individuals. This tax would be an additional tax to, and different from, the existing Wealth Tax.

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CONTACTS

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Argentina’s Congress is studying a new tax that would apply to wealth above ARS 200,000,000 owned by resident and nonresident individuals.1  This tax would be an additional tax to, and different from, the existing Wealth Tax, and would be a mandatory and extraordinary (i.e., one-time) assessment.  Its proceeds will be used to fund efforts to combat the coronavirus pandemic and incentivize specific areas of the economy.

WHY THIS MATTERS

Taxpayers who might be subject to this new form of wealth taxation may see their tax liability increase, and may face some additional information gathering, recordkeeping, and declarations requirements.  Individuals, therefore – and their tax service providers – will want to consider the implications of these changes when making decisions involving the taxpayer’s assets. 

Other Details

This tax is expected to be assessed just once, and would tax assets possessed by the taxpayer at the enactment date.  Progressive rates would range from 2 percent to 3.5 percent for Argentinian assets, however, set fixed rates (anywhere from 3 percent to 5.25 percent) would be applicable for foreign assets depending on the amount.  As yet, the draft proposal makes no provision for any exempted assets.  

KPMG NOTE

Consideration should be given to taxpayers being permitted to reduce the incremental rate applicable to their foreign assets by applying the standard rate imposed on local assets, if the individual repatriates back to Argentina 30 percent of his financial assets located abroad in the period falling 60 days after the law’s enactment date.

This proposal is still in the early stages of review by Congress.  It is too early to tell if it stands a strong chance of passage into law.

The team with the KPMG International member firm in Argentina will endeavor to keep readers of GMS Flash Alert apprised as developments occur.

FOOTNOTE

1  Congress’ Press Release. Official session summary, September 21, 2020 (in Spanish).  See the website: https://www.hcdn.gob.ar/prensa/noticias/2020/noticias_1398.html.

 

ARS 1 = EUR 0.011

ARS 1 = USD 0.0127

ARS 1 = GBP 0.0097

ARS 1 = BRL 0.073

ARS 1 = UYU 0.545  

The information contained in this newsletter was submitted by the KPMG International member firm in Argentina.

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GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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