Taxes: Fiscal Consequences of Inheriting Real Estate in Argentina as a US/American Citizen from an Argentine Decedent/Probate/Succession
Argentina and the United States of America do not have any International Tax Treaty. Said treaty pardons the payment of taxes in one country. However, this only applies when the payment of the applicable taxes occurs in the other country. This means that if any individual or Legal Entity inherited Real Estate or Assets in Argentina and got taxed 21 to 35 percent VAT at the time of inheriting the USA will not care and if they decided that the heir must be taxed again once the funds impacted in a US bank account the tax contributor would be taxed again at whatever tax rate the IRS deemed it reasonable.
Nevertheless, the good news is that this is not how everything falls into place in real life. Fortunately, there is a legal way to avoid paying taxes legitimately in both jurisdictions as long as the laws are followed with mathematical precision.
In Argentina, the beneficiary’s inheritance lawyer must file a series of AFIP forms. Therefore, instead of 35 percent VAT, each heir only pays 1.5 percent VAT at the very most. Yes, taxes can be avoided in a 100% legal way.
On the other hand, in the USA, the Argentine Inheritance Lawyer will give each heir two documents. These records will allow the tax authorities in the USA to understand that Argentine inheritance money is not subject to taxes. Mainly, they take into account the amount and the corresponding jurisdiction.
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