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Properties: The Government regulated changes in Personal Property and money laundering - La Nacion Propiedades
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Propiedades: el Gobierno reglamentó el blanqueo de capitales
Este miércoles se oficializó el blanqueo de capitales. La medida fue incluida en el paquete fiscal que fue aprobado junto con la Ley Bases
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July 12, 2024
This Friday, the approved modifications to Personal Property and Money Laundering came into effect
By Candle Contreras
Changes to Personal Property and Money Laundering have now come into effect
After months of discussions and lengthy negotiations over the regulation of the Bases Law and the fiscal package , this Friday, July 12, the approved modifications to Personal Property and Money Laundering came into effect .
In this way, through Decree 608/2024, published in the Official Gazette , the Government seeks to encourage the regularization of assets both inside and outside the country . The Personal Property section was the one that, at the time, generated the most controversy; since the ruling party claimed that , together with money laundering, it is a way to encourage investment ; but the opposition pointed out that, in a context of economic adjustment, it would mean that those who have the most would pay less.
Key points of money laundering
Although it has already entered into force, regulations by the AFIP, the BCRA and the CNV are still pending and should be published by July 18, 2024, in order to be able to adhere.In this case, taxpayers who do not have their assets declared in the country will be able to launder up to US$100,000 without paying any fixed tax , and without any type of penalty for assets that have not been declared, until April 30, 2025, with the possibility of extending it until July 31, 2025. “People who have money under the mattress will be able to launder that capital and buy different assets, including real estate,” says Fabián Achával, CEO of the real estate company of the same name. For those amounts that exceed US$100,000, the project proposes progressive rates of 5%, 10% and 15% , depending on when the taxpayers join the regime.
All property , exceptionally, must be valued in US dollars . In the case of real estate, its acquisition value, its fiscal value or its minimum value (whichever is higher) must be considered. “Most properties will end up being valued at the minimum value, because the acquisition value was converted to pesos at a low exchange rate compared to the current one,” explains tax specialist Sebastián Domínguez.
Taxpayers who do not have their assets declared in the country will be able to launder up to US$100,000 without paying any tax
In addition, three stages were designed to enter the whitening regime ; the sooner one joins the regime, the lower the tax rate one has to pay.
The new law allows those who exceed the amount of that figure to pay, in a first stage until September 30, a rate of 5% on the declared surplus . For example, if someone launders assets worth US$200,000, they must pay a penalty of US$5,000 (5% of the US$100,000 that exceeds the maximum floor). While, in the second stage until December, the rate will be 10% , and in a third stage during the first quarter of 2025, it will be 15% .
For their part, those who register for the whitening process will have a 20% increase in the rate of the Personal Property Tax. With this modification, the rate will go from 0.5% to 0.6% .
“ The trend is for the real estate market to improve its values but not at a great speed , so there has not yet been a rush to buy,” said Diego Cazes, general manager of LJRamos Brokers Inmobiliarios . In this way, he maintained that “the money laundering will benefit a small part of the middle class that was able to save dollars 'under the mattress' and that will decide to launder them to buy a home.”
“ Money laundering will lead to more transactions in properties worth up to US$300,000, because those who can buy higher-end properties do not need this measure to do so ,” Cazes said.
In this way, Sebastián Domínguez , CEO of SDC Tax Advisors, shared 10 keys to keep in mind in money laundering :
- Cryptocurrencies, cryptoassets and other virtual assets located in the country: they will be considered located in the country to the extent that they have been in the custody and/or administration, as of December 31, 2023, of a Virtual Asset Service Provider that is registered with the CNV.
- Cryptocurrencies, cryptoassets and other virtual assets not held in custody and/or managed by an authorised entity: they may only be laundered if they are transferred to authorised entities and must remain deposited there until 30 September 2024.
- Assets deposited or registered in the name of more than one person: assets in the name of more than one person will be regularized in equal parts if the participation of each owner cannot be proven.
- The exchange rate must be used to convert the value in pesos of the laundered goods to dollars and then determine the tax: the exchange rate to convert goods to dollars is US$1 = $1000.
- Laundering of Exchange Assets: they will not be counted as initial stock for the next fiscal period. This seeks to prevent exchange assets from being laundered by paying a low laundering tax, for example 5%, and then deducting them from taxed profits up to 35%.
- Valuation of the properties to be laundered: the properties will be valued at the highest value between the acquisition value, the tax value or a regulated minimum value. The minimum value arises from multiplying by 4 the taxable base established for the purposes of paying property taxes or similar taxes as of December 31, 2024.
- “Family group” tax-free laundering: the US$100,000 tax-free deductible applies only if the dependent family member also adheres to the regime. “There is still no definition of the concept of ‘enga a cargo’, we will have to wait for the AFIP regulations to analyze whether it provides further details,” Domínguez clarified.
- Destination of laundered cash without paying the money laundering tax: it can be used for documented purchases up to US$100,000 without paying tax. “An interesting alternative offered by the law is to use the deposited money for transfers linked to onerous operations, duly documented according to current legislation,” explained the tax specialist.
- “Check” Tax: Special accounts opened under the money laundering regime are exempt from the Tax on credits and debits in bank accounts and other transactions.
- Partial laundering: if the AFIP detects hidden assets that exceed 10% of the total laundered and that have not been declared, that subject will be deprived of the so-called “tax buffer”. Domínguez exemplified: “If someone launders US$100,000 and then hidden assets of US$9,000 are detected as of December 31, 2023, they will not lose the benefit of the tax buffer. However, if assets of US$10,000 or more are detected, this benefit will be lost.”
Money laundering refers to those taxpayers who do not have their assets declared in the country.
Modification in Personal Property
The validity of the modification in Personal Property changed the minimum non-taxable floor, which went from $27,377,408.28 to $100 million , and causes fewer people to pay this tax. At the same time, it updated the floor of this tax related to real estate intended for residential use from $136,887,041.42 to $350 million , meaning that: those who have a home valued at up to $350 million will not pay for it.In addition, the tax rate , which is applied once the non-taxable minimum is exceeded (the tax table with the different scales), was reduced from 1.75% -for assets in the country- and from 2.25% -for assets abroad- to a range that goes from 0.5% to 1.5%, and the discrimination between both types of assets (in the country and abroad) was eliminated.
The reform also includes the possibility of making an advance payment of the tax (for assets that were already declared) in which a unified payment can be made that will settle the tax for five years (the periods 2023, 2024, 2025, 2026 and 2027) at a preferential rate of 0.45% (for assets declared as of December 31, 2023) and for assets that are laundered, an additional 0.5% must be added for four years, freezing their assets. In addition, it promises “fiscal stability” until 2038 .
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