November 27, 2024
Press·Tax

Personal Assets and laundering: Is it better for me to take the REIBP or to keep exempt financial investments? | Prensa iProfesional

Felix Rolando, Tax Partner at Andersen, details the investments that are exempt, among others, from Personal Property Tax for the 2024 tax year.

We share with you the complete article written by iProfesional:

Taxpayers electing to file Personal Property instead of REIBP may invest in these exempt placements before the end of the year.

As the end of the calendar year and, therefore, of the fiscal year for calculating the Personal Property Tax 2024 approaches , it is convenient to know in which exempt financial investments to place funds in order to lower the level of taxation. This is especially important for those who entered the laundering of taxes.

For 2024, the minimum from which Personal Property Tax is payable will be $292.99 million of taxable assets as of 12/31/24, but the Special Personal Property Tax Regime (REIBP), still available for those who entered the laundering, does not have a minimum.

Many taxpayers entered the Special Regime for Personal Property Tax (REIBP), which unified in a single filing the fiscal years from 2023 to 2027.

However, those who enter the laundering can anticipate the payment for 4 years, from 2024 to 2027, and still have time to adopt this regime according to the stage they adopt of the laundering. For Stage 2 of the laundering, there is time to adhere until February 7, paying 75% of the special tax, and the other 25%, until March 7.

As a result of the laundering of assets, there are taxpayers who did not have declared assets and, for this reason, did not have assets for the filing of Personal Assets in 2023. These subjects will be able to choose between entering now to the REIBP for their laundered assets, or keeping the funds in exempt investments and declaring each year the Personal Assets Tax, warns Noelia Girardi, from the Lisicki Litvin & Asoc. firm.

In which cases it is convenient to use Personal Assets and not the REIBP

Taxpayers who initially adhered to the REIBP for their assets externalized before December 31, 2023 are obliged to make the advance payment also for their regularized assets. For the assets existing as of December 31, 2023, a rate of 2.25% must be paid (5 years at a 0.45% rate) and with respect to the laundered assets, the rate is 2% (4 years at a 0.5% rate), explains Noelia Girardi, and specifies:

Those taxpayers who did not adhere to the REIBP because the Personal Assets tax return did not determine the tax, may now opt for this regime and pay the tax only for the regularized assets.

In this case, they must evaluate whether it is convenient to advance the payment of the tax, or to allocate the amount of the regularized assets to assets exempted by the Personal Property Law.

Among the exempt assets listed in the Law, the following are exempt: securities, bonds and other securities issued by the Nation, the Provinces, the Municipalities and the Autonomous City of Buenos Aires; deposits in Argentine and foreign currency; negotiable obligations issued in Argentine currency; mutual funds whose underlying assets are also exempt.

This analysis is independent of the special regularization tax corresponding to the laundered assets. If the regularized funds are destined to investments allowed by the regulations before December 31, 2025, they are exempt from the laundering tax. In addition, taxpayers who laundered less than u$s100,000 do not have to pay the regularization tax, regardless of the destination of the funds, although they must consider the treatment of these in the Personal Property Tax.

Which investments are exempt from Personal Property Tax

Félix Rolando, partner at Andersen Argentina, listed the following investments that are exempt, among others, from Personal Property Tax for the 2024 tax year:

Intangible assets(keys, trademarks, patents, concession rights and other similar assets).
In this regard, certain authors consider that cryptocurrencies constitute an intangible asset and, therefore, exempt, which Rolando does not agree with. And, in any case, the former AFIP interprets that these virtual assets are covered by the Personal Property Tax.
Securities, bonds and other securities issued by the Nation, provinces, municipalities and the Autonomous City of Buenos Aires, both in pesos and dollars.
Deposits in pesos and foreign currency made in Argentine financial institutions, fixed-term deposits, savings accounts, special savings accounts or other forms of fund raising. Excluded from the exemption are balances in bank current accounts. Thus, the money held in Argentine financial institutions as of December 31 of each year is not subject to taxation.

Although the interest of a fixed term in foreign currency will not be exempt from Income Tax, the total amount of the investment will be exempt from Personal Property Tax.

Negotiable obligations issued in pesos.
Instruments issued in pesos to promote productive investment, as established by the National Executive Power. To date, we are not aware of the issuance of these instruments.
Quotas of open mutual funds, and certificates of participation and securities representing fiduciary debt of financial trusts, placed by public offering and whose main underlying asset is composed of at least 75% of deposits and exempted assets.

Which investments are covered by the tax

The main financial holdings taxed under the Personal Property Tax are dollars in cash, according to Tributum.news.

The expert Marcos Zocaro lists as follows the placements that are subject to the Personal Property Tax:

Holding of money in the principal account, opened in an ALYC.
Shares of Argentine companies: the company acts as a substitute taxpayer and pays the tax at the rate of 0.5% for the general case, and 0.375% for good taxpayers.

Guillermo Pérez, of the GNP Group, adds the following financial investments taxed under the Personal Property Tax, which are subject to rates ranging from 0.5% to 1.25% in all cases:

Foreign shares.
ADR: exempt for the holder, but the company pays 0.5% under the substitute liable party regime, or 0.375% for good performers.
Stock Market Guarantees.
CEDEAR.
Argentine open-end FCI in pesos and dollars with less than 75% of its composition in exempt placements.
FCI from abroad.
Local financial trust with public offering, certificate of participation and debt security in pesos with less than 75% underlying assets in exempt placements.
Foreign Financial Trust.
Foreign treasury bills, except for Brazilian government securities and Bolivian sovereign bonds.
Digital currencies mined in Argentina and abroad.
Money market abroad or any other foreign interest-bearing account.
ON of Argentine companies in dollars.
ON of foreign companies.
Fixed term abroad.
Foreign corporate securities.

Income tax exemptions

Zocaro analyzes that there are three main types of financial rents:

Equity: difference between sale price and purchase price.

Interest-bearing: for example, those paid by public bonds and Negotiable Obligations (ON), or even fixed-term deposits.

Dividends: which companies distribute to their shareholders.

And what is the treatment of these benefits in the income tax for human beings? asks Zocaro:

If realized on the local stock exchange, capital gains from the purchase and sale of shares, CEDEAR, ON and government securities, regardless of currency, are exempt.

CEDEAR also? Yes, Even if the CEDEAR listing of the Bitcoin ETF CEDEAR on the Argentine Stock Exchange, recently approved by the CNV, is completed, the result of its purchase and sale does not pay income tax.

Interest paid on Argentine bonds and ONs, regardless of the currency, is not taxable.

What about the redemptions of Argentine bonds and Notes? They are only “returns” of capital and, therefore, do not pay Income Tax.

If the sale of the instruments is made in a foreign stock exchange, the difference between the sale price and the purchase price is taxed at a rate of 15%.

What if I bought a stock in the USA at u$s100 and at the end of the year it is trading at u$s500? If I do not sell it, there is no profit; only when I sell it do I calculate the yield.

Dividends: if it is an Argentine company, the company withholds 7% on dividends, and then the company pays this withholding to ARCA (former AFIP).

Dividends from CEDEAR and any foreign company.

Interest on a foreign bond: it is also taxed on a progressive scale, whose maximum rate is 35%.

The minimum above which it is paid varies from case to case and is modified from year to year, clarifies Zocaro.

Thus, those who have not yet opted for the REIBP can invest in financial investments exempt from Personal Property Tax before the end of the year, in order to lower the level of taxation.

Source: Iprofesional

If you have any questions or comments, feel free to share them with us:

Félix Rolando
Tax Partner
felix.rolando@ar.Andersen.com