Many expats visit Argentina every year. Buenos Aires, Cordoba, La Plata, Mendoza are one of the most popular destinations. Whether the purpose is to explore the culture or to learn how to dance tango, quite a significant number of expats end up living in Argentina. Argentina had several tax reforms in 1998 and 1999 and introduced many new tax rules as well as a definition of tax residence. We get multiple questions from our clients in Argentina. Do I have to pay foreign income tax as well as U.S. income taxes when I work in Argentina? What is foreign income exclusion? How is my income taxed in Argentina? How can American expats Argentina minimize their US tax liability? What is Foreign Tax Deduction? Do you provide US expatriate tax services to Americans expats Argentina? The purpose of this guide is to cover the most popular qustions.
Expatriate Tax Rules and Returns for American Expats Argentina
US citizens are subject to the worldwide taxation by the USA whether they live in Buenos Aires or Chicago. However, American expats Argentina can take an advantage of several exclusions and foreign tax credit that are a part of provisions under Internal Revenue Code section 911.
- Foreign earned income exclusion. If American expats Argentina have foreign earned income and meet either a physical presence test or bona fide residence test, then they can exclude up to $101,300 for 2016 and $100,800 for 2015 on US expat tax returns . A spouse can claim the same amount of exclusion if s/he is a qualified individual too.
- Foreign housing exclusion. Additionally, American expats Argentina may be able to exclude or deduct certain foreign housing expenses like rent, utilities etc.
- Foreign tax credit. If American expats Argentina paid foreign income taxes, then they can take a foreign tax credit to minimize U.S. tax liability.
American expats Argentina must remember that they still have to file US expat tax returns even if you don’t owe any taxes. Please read about penalties that American expats face if they don’t file a U.S. tax return.
Moreover, American expats Argentina have to file Form TD F90 22-1 (FBARs) if they have financial accounts in Argentina or any other foreign country with an aggregate value over $10K at any time during the year.
Tax system in Argentina – FAQ
I am an American expat living in Argentina. Is my worldwide income taxed in Argentina?
If an expat is considered a tax resident in Argentina, then s/he has to pay a foreign income tax on the worldwide income. If s/he is a nonresident for tax purposes or foreign beneficiary, then s/he is taxed only on the income from Argentina.
Who is considered a tax resident in Argentina?
American expat is considered a tax resident if he/she has lived in Argentina for more than twelve months or obtained a permanent residence visa. However, if an American expat is in Argentina only on a work assignment that is going to last less than 5 years, then he/she might be considered a nonresident. If you anticipate that your assignment will last more than 5 years, then your status will be a permanent resident.
What is the tax year in Argentina?
The tax year in Argentina is a calendar year like in the USA.
What is an income tax rate in Argentina?
Both residents and nonresidents are taxed on a progressive scale and tax rate varies from 9% (income up to ARS 10’000) to 35% (income above ARS 120’000).
Which income is taxable in Argentina?
Taxable income includes all payments in cash or in kind, whether you received it as an employee or self-employed individual. Rental and interest income also is subject to tax. Profits derived from the carrying on by an individual of a trade or business organized as an enterprise are generally taxed in the same way as those of a corporation.
Can an American expat Argentina file an Argentine expat tax return with a spouse?
Joint income tax returns are not permitted in Argentina; each individual must file a return separately.
Is it a requirement to file Argentine tax return every year?
American expats Argentina are required to file an expat tax return if they have taxable income other than employment income. Self-employed individuals and independent contractors are required to file a tax return every year.
Does Argentina have a tax treaty and social security double-taxation agreement with the USA?
There is no such an agreement in 2011.
These are some of the issues that American expats Argentina should consider. If you have any questions about U.S. tax on foreign income in Argentina or need help with U.S. tax preparation, please consult an expat tax CPA that provides international tax services.
International tax experts at Artio Partners are pleased to assist you with a wide range of expat tax issues, international tax planning and preparation. We are a trusted partner to a growing number of American expats in Argentina.