I am finishing up an exploratory/holiday trip in South America. I checked out a few countries and plan on returning to check out more but I had a death in the family and now have to return back to the U.S. for a funeral.
One of the lessons learned however is to be vigilant of all circumstances when planning a move and/or retirement overseas. After discussing my findings with some people back home, I was asked why not just move now and be done with it especially since I had some positive feedback about some of the countries I visited. I then went into the following deep dive with them.
AI & Due Diligence
To give you an example of what could go wrong if you do poor planning, I walked through an example with some family members. The country in this case is Argentina and the following information was an exchange and some examples of what could go wrong with the help of AI.
As of 2025, Argentina has a complex tax system with multiple types of taxes at the national, provincial, and municipal levels. Here are the main tax rates for individuals and businesses:
🇦🇷 1. Personal Income Tax (Impuesto a las Ganancias – Personas Físicas)
- Progressive rates from 5% to 35%.
- The rates apply to annual net income (after deductions).
- Non-residents are usually taxed at a flat 35% on Argentine-sourced income.
🇦🇷 2. Corporate Income Tax (Impuesto a las Ganancias – Sociedades)
- Flat 35% corporate tax rate.
- Dividends are subject to an additional 7% withholding tax when distributed.
🇦🇷 3. Value Added Tax (VAT – IVA)
- Standard rate: 21%
- Reduced rates:
- 10.5% for certain goods (e.g., medical equipment, some food items)
- 27% for utilities like energy, water, and telecoms
🇦🇷 4. Social Security Contributions
- Employer: ~24–26% of gross salary
- Employee: ~17% of gross salary
🇦🇷 5. Gross Turnover Tax (Ingresos Brutos)
- A provincial tax on business revenue, not profit.
- Varies by province and industry: typically 3% to 7%
- No deductions for expenses.
🇦🇷 6. Wealth Tax (Bienes Personales)
- Applies to assets over a threshold (updated annually).
- Rates range from 0.5% to 1.5% (or up to 2.25% for foreign assets).
- Non-residents with assets in Argentina are also liable.
🇦🇷 7. Check Tax (Impuesto al Cheque)
- 0.6% on each banking transaction (both debit and credit).
- Effectively 1.2% total per transaction cycle.
- Partially creditable against income tax.
Question: What would an american expat pay in taxes if moving to Argentina?
If you’re an American expat moving to Argentina, your tax obligations will depend on several factors like residency status, income sources, and the U.S.-Argentina tax relationship. Here’s a breakdown of what you’d likely face as of 2025:
🇦🇷 Taxes in Argentina
🧍♂️ 1. Tax Residency
You’re considered a tax resident in Argentina if:
- You spend more than 183 days in a year in the country, OR
- You establish a permanent residence (even if staying <183 days).
📊 2. Personal Income Tax
If Argentine tax resident:
- Taxed on worldwide income
- Progressive rates from 5% to 35%
If non-resident:
Taxed only on Argentine-sourced income at flat 35% (no deductions)
Annual Income (ARS) Tax Rate
Up to ~$1.3M 5%
Over ~$10M 35%
(Note: brackets vary yearly with inflation)
💼 3. Social Security
If working in Argentina, both employee and employer contributions apply.
- Employee: ~17%
- Employer: ~25%
If self-employed, different regimes (e.g. Monotributo) may apply.
🏦 4. Other Taxes
- Wealth Tax: 0.5%–1.5% on worldwide assets over $27M ARS ($30,000 USD), higher for foreign assets
- VAT (IVA): 21% on most purchases
- Banking Transactions (Check Tax): 1.2% total per bank transfer (can be partially credited against income tax)
🇺🇸 U.S. Taxes for Expats
As a U.S. citizen, you must still file U.S. tax returns even while abroad. However, you can offset or reduce double taxation:
✅ Key U.S. Tax Relief Options:
- Foreign Earned Income Exclusion (FEIE)
- Excludes up to $126,500 (2024 figure, indexed) of foreign-earned income
- Must meet Physical Presence Test (330 days out of 12 months abroad) or Bona Fide Resident Test
- Foreign Tax Credit (FTC)
- Credit for taxes paid to Argentina, reducing U.S. tax owed
- Foreign Bank Account Reporting (FBAR)
- Required if your foreign accounts total over $10,000
💡 Example Scenario
- You’re a U.S. citizen living full-time in Buenos Aires, earning $80,000 USD from a remote U.S. employer.
- Argentina: If resident, you pay income tax on $80,000 (~35 million ARS) at progressive rates, up to 35%.
- U.S.: File a return; you can exclude most/all of the income via FEIE, or use FTC for taxes paid in Argentina.
- Double Tax Avoided: U.S. and Argentina do not have a tax treaty, but the FTC helps avoid double taxation.
In the above example, it *might* be doable if you’re able to get foreign income exclusions and your employer subsidizes some of your expenses however what if income only comes from US sources as dividends, interest, capital gains and rental income?
If your only income comes from U.S. sources like dividends, interest, capital gains, and rental income, and you’re an American expat living in Argentina, here’s how taxes would apply:
🇦🇷 Argentina: How Your Income Is Taxed
🧍♂️ 1. Residency Determines Scope
- If you’re a tax resident of Argentina (living >183 days/year or establishing permanent residence), then you’re taxed on worldwide income.
- If non-resident, you’re taxed only on Argentine-source income, so U.S. dividends/rent/capital gains are not taxed.
💰 2. For Tax Residents:
U.S. dividends, interest, rental income, and capital gains are considered foreign-source income and taxable in Argentina.
- Tax rates: 5%–35% progressive based on total annual income.
- Argentina taxes these income types differently:
- Income Type Tax Treatment (Argentina)
Dividends Taxable as income, subject to progressive rates
Interest Taxable (some exemptions for certain bonds or instruments)
Capital Gains Taxable; rules depend on asset type and holding period
Rental Income Taxable as ordinary income; expenses deductible
⚠️ Important: Argentina may not credit foreign taxes paid on passive income (like U.S. withholding), meaning double taxation is a risk without careful planning.
🇺🇸 U.S. Tax Obligations
Since you’re a U.S. citizen, you must:
- Report worldwide income annually
- Pay U.S. tax on:
- Dividends (15–20%)
- Interest (ordinary rates)
- Rental income (minus expenses, taxed as ordinary income)
- Capital gains (0–20%, depending on holding and income level)
- You cannot use Foreign Earned Income Exclusion (FEIE) because it applies only to earned income (like wages or freelance work), not passive income.
However, you can use the Foreign Tax Credit (FTC) to offset some U.S. tax if Argentina taxes that same income — again, tricky with passive income.
🧾 Example: You move to Argentina and earn (all USD):
- $25,000 in dividends
- $10,000 in interest
- $15,000 from capital gains
- $20,000 in net U.S. rental income
You’ll likely:
- Owe Argentine income tax on the full $70,000, potentially up to 35% if you’re a resident.
- Owe U.S. tax on all of it, too, but may be able to apply the foreign tax credit (if Argentina’s tax applies).
- 🇦🇷🇺🇸 No Tax Treaty Risk
Argentina and the U.S. do not have a tax treaty, meaning: - No automatic tax relief
- Greater chance of double taxation
- You’ll need good tax planning and likely a local accountant
By owing both US income tax AND Argentina income tax, you could end up with a tax rate of (35% + 22%) 57% or higher depending on income levels and whatever exclusions or credits you managed to get but there is also a risk that tax rates go up or tax treaties break and that’s entirely possible with the current administration in office.
Just like my example with Spain, it would not be worth it under current tax laws to move to Argentina unless you’re willing to pay the tax price. If you’re a US citizen contemplating a move to Argentina, think very tax carefully before doing so!