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Offshore Millionaires Become Target of Argentina’s Wealth Tax

Argentina peso (Photo: Alex Proimos / Flickr)

The Argentine government wants a one-time wealth tax to be extended to its millionaire citizens living outside the country, and not just applied to citizens residing on domestic soil.

The Argentine government wants a one-time wealth tax to be extended to its millionaire citizens living outside the country.

The government plans to broaden a bill imposing taxes on the rich in order to reach non-residents and their investments in Argentine companies, according to legislator Carlos Heller, who is promoting the bill. Until now the proposal only applied to citizens living in the country.

“This is to avoid unequal treatment between residents and people who changed residence,” Heller said. “This clause aims to ensure that non-residents who are holders of shares in Argentine companies are reached by the contribution.”

Argentina’s ruling coalition, Frente de Todos, is seeking to impose a one-time tax on wealthy citizens as part of a strategy to solidify the alliance’s left-wing credentials while boosting government revenue amid a deteriorating economic crisis. The country’s economy is in its third straight year of recession, with activity expected to decline a record 12% this year.

Read more: Argentina’s Ruling Bloc Proposes New Tax on Millionaires

The so-called “solidarity” tax would apply to approximately 12,000 Argentines who have over 200 million pesos ($2.7 million) in assets, according to a statement by the coalition’s press office in the lower house of congress. The tax would scale up to as much as 5.25% for ultra-wealthy citizens holding their fortune in assets outside the country, it said.

The legislation comes as the new, pro-business government in neighboring Uruguay has made it easier for foreigners to obtain tax residency. Local media have reported that a growing number of Argentines are seeking to change their tax domicile to Uruguay, where many of them already go for summer vacations.

Read more: Companies Flee Argentina, and Coronavirus Is Just One Reason

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