2023-09-20-KPMG_Global-Argentina_–_Tax_Court_Ruling_on_Argentina_Tax_Residence_3页_323kb

Argentina Tax Court Ruling on Tax Residence

Key Ruling

Argentina's Tax Court delivered a significant ruling on tax residence, impacting individuals' tax status and employer obligations. The decision clarifies circumstances under which one regains tax residence in Argentina.

Loss of Tax Residence

Individuals lose tax residence if:

• Acquiring permanent foreign residence.
• Applying a double taxation agreement.
• Staying in another country/jurisdiction for over 12 months; brief stays in Argentina (up to 90 days per year) do not interrupt this loss.

Regaining Tax Residence

Regaining tax residence depends on intent and evidence from the ruling, including:

• Staying in Argentina for more than 90 days, with presumption of intent after 91 days.
• Using Argentinian reporting regimes like "Participaciones Societarias Y Rentas Pasivas."
• Not changing fiscal domicile or being classified under foreign beneficiary regimes.

Implications

The ruling affects globally-mobile employees by altering tax liabilities and employer responsibilities, such as tax equalizations. Employees may need to report changes to consulates or provide evidence of foreign income withholding.

KPMG Recommendations

Discuss residency issues with employees and use tax service providers to handle procedures like address changes. Contact local KPMG teams for assistance.