Private client law in Argentina: overview
A Q&A guide to private client law in Argentina.
The Q&A gives a high level overview of tax; tax residence; inheritance tax; buying property; wills and estate management; succession regimes; intestacy; trusts; co-ownership; familial relationships; minority and capacity, and proposals for reform.
To compare answers across multiple jurisdictions, visit the Private Client Country Q&A tool.
The Q&A is part of the multi-jurisdictional guide to private client law. For a full list of jurisdictional Q&As visit www.practicallaw.com/privateclient-guide.
Tax year and payment dates
Domicile and residence
Domicile is defined as the place where the individual resides or carries out his activity. Domicile is only relevant for Personal Assets Tax purposes.
Income tax liability is determined by residence (see below, Residence).
An individual is liable to the Argentinean tax authority (Administración Federal de Ingresos Públicos (AFIP)), according to his/her residence status. Individuals are considered to be resident in Argentina for the following reasons:
They are of Argentinean nationality by birth or naturalisation (unless they have lost their residence status due to acquiring permanent residence status in another country, or remain in another country for a period exceeding 12 months).
They are foreign individuals who are not residents for immigration purposes but have spent more than 12 months in Argentina, or foreign individuals with permanent residence for immigration purposes.
Accordingly, residents are taxed on their worldwide income, while non-residents are taxed on Argentine-source income only.
Taxation on exit
Foreign individuals whose presence in Argentina is based on the grounds of employment that is duly accredited and requires their permanency in Argentina for a period not exceeding five years with a temporary visa are considered to be non-residents. The same treatment applies to family members who accompany them.
Taxes on the gains and income of foreign nationals
Gains derived by a non-resident from the sale of unlisted shares of an Argentine corporation or other participation of an Argentine entity are subject to a 15% tax.
The transfer of ownership involving real estate property located in Argentina by a foreign national is not subject to income tax unless they are usually engaged in this activity (see below).
When the sale of real estate is not subject to income tax (whether made by an Argentine individual or a foreign individual), the seller is subject to a special tax on the transfer of real estate at the rate of 1.5% of the amount of sale.
When selling one primary residence in order to acquire another (within a one-year period), it is possible to include the option of not paying this tax in the deed of sale.
If the foreign national is usually engaged in the activity of buying and selling real estate, this will be deemed an individual "enterprise" (which is not expressly defined in the Income Tax Law) and income tax will be withheld at an effective rate of 17.5%.
Finally, stamp tax is levied on the deed of sale of the real estate property. The rate can range between 2.5% and 4 % of the sale price.
Inheritance tax and lifetime gifts
There are no federal inheritance or gift taxes in Argentina. However, the following provinces have introduced such a tax:
The tax applies to any increase in an individual's wealth due to the receipt of a gratuitous transfer of assets from acts including inheritances, legacies, gifts and so on.
According to the law, the following are deemed to be taxpayers:
Natural persons and legal entities domiciled within the provinces of Buenos Aires or Entre Ríos (Provinces), benefited by the gratuitous transfer. In this case, the tax applies to the total sum of the assets received by that person or entity.
Natural persons and legal entities domiciled outside the Provinces, when the increase in their wealth comes from a gratuitous transfer of assets located within the Provinces. In this case, the tax applies only to the amount of the increase derived from the transfer.
In both cases, the rates applicable depend on the taxable base and the relationship with the decedent or donor.
The rates in the two applicable Provinces (that is, Buenos Aires and Entre Ríos; see Question 7), go from 4% to 21.92%, depending on the taxable base and the relationship with the decedent or donor.
Tax free allowance
There is a tax-free allowance of ARS50,000 on the aggregate of the lifetime gifts of an individual and the gifts at the time of death. This amount is increased to ARS200,000 when the receiving party is the spouse, child or parent of the transferor.
The Tax Codes of the two relevant Provinces establish subjective and objective exemptions.
Subjective exemptions. These include:
Transfers for the benefit of the national government, the provinces or the City of Buenos Aires or any municipality, or any body of these institutions.
Objective exemptions. These include:
The transfer of art or other objects that have a historic, scientific or cultural value, provided the deceased has transferred the property on the basis that the art or object is to be used for instruction or public exhibition purposes.
The transfer of collections of books, newspapers, magazines or other periodic publications.
The transfer on death of the household registered under the Family Household Protection Act (Law No. 14,934) provided certain conditions are met.
The transfer on death of an enterprise provided certain conditions are met.
Techniques to reduce liability
The best way to reduce liability for inheritance or gift tax is to establish a trust or offshore structure.
Taxes on buying real estate and other assets
Purchase and gift taxes
Stamp tax is the only tax that the foreign national must consider when buying real estate or other assets in Argentina. Stamp tax is levied on transactions formalised in writing (by public or private instruments), performed inside the province's jurisdiction, or with effects that are triggered in it.
Each province has its own stamp tax law that applies within its territory. The tax rates are set by each province, and usually vary from 0.5% to 20% (depending on the nature and contents of the contract).
A transfer of real estate must be performed by public deed before an Argentine notary public (who is legally required to act as tax collector for the stamp tax). For real estate sales, the rate of tax ranges from 2.5% to 4% of the property value.
Despite the fact that each party often pay 50% of the stamp tax, all parties are liable to pay it.
Individuals who are not resident or domiciled in Argentina are only subject to personal assets tax on their assets located in Argentina.
In principle, the personal assets tax applies when the value of the assets owned by the taxpayer exceeds either:
ARS800,000 at the end of 2016.
ARS950,000 at the end of 2017.
ARS1,050,000 at the end of 2018.
Non-resident individuals are subject to a fixed rate of:
0.75% for tax period 2016.
0.50% for tax period 2017.
0.25% for tax period 2018 and subsequent periods.
To ensure that the tax is collected, the law provides a method of substitution that imposes an obligation to pay the tax on the local resident that has the administration of the asset owned by a foreigner (Responsable Sustituto).
The provincial governments levy a tax on real estate, with rates depending on the jurisdiction where the property is located. The taxable base is generally the fiscal value of the property as determined by the applicable authority.
Taxes on overseas real estate and other assets
International tax treaties
Wills and estate administration
Governing law and formalities
It is not essential for an owner of assets to make a will in Argentina.
Under the Civil and Commercial Code (CCC) (passed by Law No. 26,994) that came fully into force and effect in August 2015, succession is governed by the law of the country where the decedent was domiciled at the time of his death. This law governs:
The determination of the decedent's heirs.
Any succession rights arising by reason of death.
The validity of testamentary dispositions.
Assuming the decedent was last domiciled in Argentina, the absence of a will determines the application of intestacy rules (see Questions 24 to 29). In such a case, the estate will be divided among the forced heirs.
The law of the deceased's domicile at the date of his death governs the enforcement and contents of wills and the legal succession. The will's form is governed by either:
The law in force in the territory where it is made.
The law in force in the country from which the testator is a national.
Where the testator has his domicile or his residency.
In this sense, the validity of a will, no matter where it was extended, is deemed to be governed by Argentine law if the decedent was last domiciled in Argentina.
The formalities for making a will in Argentina are the same, regardless of the nationality, residence and/or domicile of the testator.
Ordinary wills. Any person can make a will in Argentine in any of these two ordinary forms:
Holographic will (testamento ológrafo). This will is wholly written by the testator in his own hand, dated and signed. This will is neither witnessed nor notarised.
Notarised will (testamento por acto público). This will is made before a notary public and two witnesses and entered on a notary record. It is also known as an "open will".
The Civil and Commercial Code (CCC) has removed the "closed will" and the special wills contemplated in the previous Civil Code (soldier's will, mariner's will, aeronautical will and the will made in event of a plague or epidemic). The only special will is established in section 2646 of the CCC (consular will).
Validity of foreign wills and foreign grants of probate
Validity of foreign wills
The following must apply for a foreign will to be recognised as valid in Argentina:
The foreign will must comply with the formalities required by the law of the jurisdiction where it was extended.
The substantive provisions of the will must comply with Argentine law (for example, the provisions must be compatible with the forced heirship laws, legitimate portions and so on).
The Civil and Commercial Code will also enforce wills made by foreigners outside of Argentina if the will complies with the formalities of the place of residence of the testator, his country of nationality, or those of Argentina.
Validity of foreign grants of probate
Foreign grants of probate will be recognised in Argentina if they comply with the requirements of the foreign law and do not violate Argentine public policy.
Death of foreign nationals
The last domicile of the deceased person and the location of the immovable property (if any), determines the territorial jurisdiction. Therefore, if the decedent was domiciled in Argentina or if the decedent was domiciled abroad, the decedent's estate comprises immovable property located in Argentina, Argentine rules will apply and a court-based procedure (proceso sucesorio) must be followed (section 2643, Civil and Commercial Code (CCC)).
The applicable law, is determined by the last domicile of the decedent. However, an exception applies if the deceased was last domiciled in a foreign country and their estate comprises immovable property located in Argentina. In this case, the applicable law would be the CCC as established in section 2644 of the CCC.
This is only applicable in the case of immovable property and is not applicable when movable assets are involved.
Administering the estate
Responsibility for administering
The administration of the estate should be carried out by an administrator.
The administrator could be designated by the testator in his will. If there is no testamentary designation, the heirs acting by majority may designate an administrator. The administrator must carry out conservatory acts regarding the assets comprised in the estate and any act linked with the normal course of the decedent business.
In order to transfer certain assets, the administrator must have the unanimous consent of the heirs, or failing this, judicial authorisation.
However, if no administrator has been designated, any heir may undertake acts of conservation or urgent measures in order to preserve the estate. In order to undertake administration or disposition acts, he/she will need the unanimous consent of the other heirs.
The administrator must give full account of their administration on a quarterly basis, except where the majority of the heirs have agreed to an alternative term. If no objection is made, the judge will approve the accounts.
To declare the legitimate heirs of the decedent, a court procedure must be followed. Once the court makes such declaration, the estate is considered to have vested directly from the decedent to each of its heirs.
Establishing title and gathering in assets (including any particular considerations for non-resident executors)?
Establishing title and gathering in assets
Any and all heirs are entitled to establish title and gather in assets. However, everything must be done through the court procedure and with the control of the judge. There are no particular considerations for non-resident executors in this aspect, since court participation is mandatory. If a non-resident executor has been appointed, the court will probably require from him a local address for service of process.
Procedure for paying taxes
Until the court procedure is ended, the administrator is responsible for filing tax returns and paying taxes on behalf of the estate. Failure to do so could make the administrator jointly and severally liable for any unpaid taxes.
Distributing the estate
The court distributes the estate in the court procedure. The court decides how the distribution is to be made or grants authority to distribute the estate to the testator or the executor.
Heirs of the decedent that reside in Argentina would be entitled to a larger portion of the assets that are located in Argentina if, due to the application of foreign law, they were deprived of assets located abroad (or a portion of those assets) that should have, under Argentine Law, been allocated to them under the forced heirship regime (see Question 25).
Therefore, if an individual dies having his last domicile abroad, leaving assets both in Argentina and in his home country, and through a will deprives an heir who resides in Argentina of his statutory reserved portion under the Civil and Commercial Code, that heir is entitled to the additional portion of the Argentine assets, equal to the value of the deprived portion.
A beneficiary is entitled to challenge the:
Will, when it affects the legitimate portion the forced heirs are entitled to by law.
Executors, when their acts affect the legitimate portion the forced heirs are entitled to by law and when they deviate from the instructions contained in the will.
Administrators, when they do not comply with their obligation of giving full account of their administration and when they carry out acts in excess of their authority.
Argentina has a forced heirship (public order) regime. The forced heirship portion refers to a portion of the estate that is reserved for certain heirs (that is, the forced heirs) by law. This allows for descendants, ascendants and the surviving spouse to have a reserved portion in the estate of the deceased which cannot be deprived either by will or by any free inter vivos act (gifts) (section 2444, Civil and Commercial Code (CCC)).
The CCC establishes the reserved portions as follows:
For descendants, the forced portion is two-thirds of the estate of the deceased.
For ascendants, the forced portion is one-half of the estate of the deceased.
The surviving spouse has a reserved portion of one-half of the estate of the deceased.
These portions are calculated taking into account the sum of the liquid value of the estate at the time of the decedent's death and the gifts provided for each of the forced heirs at the time the gift was made.
The CCC introduces the concept of improvement. This allows the decedent to reduce the reserved portion in order to exclusively improve it for disabled heirs, whether they are descendents or ascendants (first part of section 2448, CCC). Section 48 of the CCC establishes that a disabled person is someone who suffers from a mental or physical disorder, either permanent or prolonged, who, in relation to his age and social environment entails considerable disadvantages for his family, social , educational or professional integration.
Forced heirship regimes
Avoiding the regime
Since the forced heirship regime is a public order regime, any provisions or structures used by the parties which conflict with the portions under the regime are null and void.
There are precedents in Argentine courts in which forced heirship claims have been admitted against trust assets when the legitimate portion of one of them was infringed.
A forced heir can be deprived of his legitimate portion if the decedent invokes in their will one of the statutory causes for disinheritance established in the Civil and Commercial Code (for example, the decedent invokes in his will that he was the victim of violence by his son). The onus probandi of the invoked disinheritance cause is in charge of the other heirs.
Assets received by beneficiaries in other jurisdictions
Assets received by beneficiaries in other jurisdictions are taken into account.
Mandatory or variable
Any agreement entered into between future beneficiaries during the deceased's life is null and void. Argentine law forbids any agreement regarding the future estate, as it is a public order regime.
Real estate or other assets owned by foreign nationals
Immovable property located in Argentina can only be passed in accordance with Argentine law.
It has been discussed in both doctrine and jurisprudence whether this applies solely to transfers between living persons, or if it applies to transfer by death too. Argentinean court decisions have held that it applies to both.
The intestacy rules apply depending on who survives the decedent, as described below:
Surviving descendants only. The children are entitled to the entire estate. If any of the children have predeceased but have surviving issue, the share that would have been allocated to that child goes to his issue per stirpes (if the predeceased has two children the portion of the predeceased is divided in two equal shares). This is known as "derecho de representación".
Surviving spouse and surviving descendants. One-half of the decedent's "marital" property is distributed to the surviving spouse and the other half is transferred entirely to the children. The decedent's "own" property is distributed in equal portions among all of the children and the surviving spouse.
Surviving ascendants but no surviving descendants or surviving spouse. The whole estate passes to the surviving ascendants. In this case, the closer generations exclude the inheritance rights of the further generations (for example, the grandfather is excluded if the father survived).
Surviving spouse and surviving ascendants but no descendants. The surviving spouse is entitled to one-half of the marital and one-half of the own property of the deceased. The other half goes to the ascendants.
Surviving spouse but no surviving ascendants or descendants. The surviving spouse is entitled to the whole estate.
No surviving ascendants or descendants, and there is not a surviving spouse. The collaterals (until the fourth degree of relationship) are entitled to the estate.
However, the existence of marital property will depend on whether the spouses have made a convention opting for a separate property regime. In the event that no convention is made or the convention does not set forth any provision regarding the property regime, the traditional shared property regime will be applied.
In Argentina, trusts (fideicomisos) were previously regulated by the Housing and Construction Financing Law No. 24,441, in particular Title I (Trust Law).
The Trust Law contemplates two types of trusts:
Financial trust (fideicomiso financiero). Under this type of trust, the trustee must be a financial entity or a corporation specifically authorised by the Argentine Securities Commission to act as financial trustee.
Ordinary trust (fideicomiso ordinario). These can be:
management trusts (fideicomisos de administración); or
guaranty trusts (fideicomisos de garantía).
However, the Civil and Commercial Code (CCC), in force since August 2015, amended and superseded the Trust Law. Therefore, trusts are now regulated from section 1666 onwards in Chapter 30 of the CCC, which incorporates suggestions of legal scholars and case law with respect to certain issues of interpretation and application of trust law.
Does the law provide specifically for the creation of non-charitable purpose trusts?
Does the law restrict the perpetuity period within which gifts in trusts must vest, or the period during which income may be accumulated?
Can the trust document restrict the beneficiaries' rights to information about the trust?
The Civil and Commercial Code (CCC) does not include any specific provisions regarding non-charitable purpose trusts.
Perpetuities and accumulations
A trust has a maximum term of 30 years from the date on which it was created. If the beneficiary is a natural person without legal capacity, this period is inapplicable and it will last until its death or until termination of his incapacity.
There are no regulations regarding the period within which income must be accumulated.
Beneficiaries' rights to information
No such rights are included in the CCC. In this sense, the right of information can be contractually restricted.
If the trust was settled with marital property (bienes gananciales), the spouse will not be entitled to claim against trust assets. However, on dissolution of the union (that is, either divorce or death of one of the spouses), the spouse may be entitled to make a claim against the other spouse (settlor) at the time of dissolution.
Charities are recognised. However, in Argentina there is not a single regulatory authority for all charities (see Question 37). In addition, unlike some other jurisdictions, the Argentine law does not provide an exact definition of a "charity".
Despite the lack of a legal definition, charity can be defined as an organisation whose purpose is to work for the public benefit without making a profit. The two main types of not-for-profit organisations are:
Foundations (fundaciones). These are non-profit legal entities created with certain funds or assets which have been endowed by its founders to carry out some specific activity for the public benefit without seeking profit. Foundations are governed by Chapter 3 of the Civil and Commercial Code (CCC).
Civil associations (asociaciones civiles). These are non-profit legal entities with a public benefit purpose. Unlike foundations, they are incorporated by a number people willing to carry out its charitable purpose for the benefit of those who are members of the organisation. Civil associations are governed by Chapter 2 of the CCC.
To incorporate a charity, the founding members must file the following documents with the local Public Registry of Commerce (PRC):
Constituting documents: memorandum of association and the bye-laws (estatutos).
Financial forecast for the first three years.
Details of activities to be performed during the first three years.
Evidence of paid-in capital or assets of at least ARS12,000 (about US$1500). The assets initially donated or promised to the foundation must be at least prima facie sufficient to carry out its purpose to obtain the registration by the relevant authority.
Local registration is mandatory, and the appropriate registry will be determined by the domicile of the foundation or association. For example, in the City of Buenos Aires, foundations and civil associations are registered with and controlled by the PRC (Inspección General de Justicia), the government agency with supervisory authority over companies registered in the City of Buenos Aires. In other provincial jurisdictions, the same body that controls commercial companies may also be in charge of regulating charities, and registering them in the local PRC.
Once the charity is registered by the PRC, it must be registered with the Tax Authority (Administración Federal de Ingresos Públicos (AFIP)). The AFIP will provide the charity an identification number, which will identify the organisation as a charity, with all applicable tax exemptions (see Question 38).
The benefits for individuals when setting up a charitable organisation are the following:
Separate legal personality. The law recognises the charity as having a separate legal personality to that of their founders or members. Therefore, people may engage in charitable activities limiting their responsibility, and the charity's assets are segregated from the patrimony of the founder.
Tax benefits. Most charities are exempt from property tax and/or value added tax (VAT). Charities are also usually income tax-exempt, provided the income is:
used for charitable purpose only; and
not directly or indirectly distributed among its members, founders or directors.
Ownership and familial relationships
Under the Civil and Commercial Code (CCC) the future spouses have now the possibility of opting, by entering into marriage conventions (the "Conventions"), between a shared property regime or a separate property regime.
Section 463 of the CCC establishes that in the event that no convention is made or the convention does not set forth any provision regarding the property regime, the traditional shared property regime will be applied.
Conventions may be created for the purpose of (section 446, CCC):
Designation and appraisal of the goods that each of the future spouses bring to the marriage.
Admission of debts.
Donations made between each other.
Option chosen taking into account the regimes contemplated in the CCC.
Section 448 of the CCC provides that in order for the Conventions to be valid, they must be executed by Public Deed (escritura pública). In order for the conventions to be effective towards third parties, the marriage certificate must include a note in the margin specifying the regime chosen.
In the event that the spouses decide to change the regime, the amendment must also be made by Convention and by a public Deed, for which the spouses must have been married for at least one year. In the event that there are creditors affected by this change, they will have one year to object, as from the date they became aware of the change.
When a marriage is terminated (due to death or divorce), the assets that qualify as shared property are grouped together and, after the applicable liabilities and claims of each spouse have been worked out, divided and distributed equally between the spouses.
Argentine law recognises marriage between same-sex couples, so the same marital property regime applies in such cases (see also Question 41).
The CCC recognises certain rights to cohabitees provided they have been together for at least two years. Through the means of "cohabitation agreements" (Pacto de Convicencia) cohabitees will be able to regulate different aspects of their life together, such as economic aspects and other responsibilities. It also provides protection for the family home and, in case of death of one partner, the survivor is granted the right of free housing in the home they shared, for a period of two years.
Marriage is defined as a person that is united to another of the same or opposite sex, in a consensual and contractual relationship recognised by law, and in which the consent is usually expressed in the presence of a public officer.
A divorce is the final termination of a marital union. It is declared by a judge in a formal procedure, and it cancels the marital duties and dissolves the marital property regime.
An adopted child is one that is taken into a family that is different to the one of its parents, after a legal process is followed under the Civil and Commercial Code (CCC). Section 594 to section 637 of the CCC distinguishes between simple, full, and integrative adoption.
The distinction has a direct impact on the intestate inheritance rights of the adopted children, as follows:
Simple adoption (adopción simple). In the case of a simple adoption, the law grants the adopted child the same intestate inheritance rights as a biological child but it does not create any relationship between the child and the adoptive family. However, the CCC provides to the adopted child a right of representation in the succession of the ascendants of his adoptive parents, but not as forced heirs. Additionally, the descendants of the adopted person have a right of representation in the succession of the adoptive parents, but in this case, as forced heirs.
Full adoption (adopción plena). In a full adoption, the relationship between the adopted child and his blood family is terminated, being replaced by a relationship with his adoptive family. This implies, on the one hand, that the fully adopted child will have no intestate inheritance rights regarding his/her blood family and, on the other hand, that he/she will acquire in his adoptive family the same intestate inheritance rights as those of a biological child.
Integrative adoption (adopción de integración). The adopted child is the son/daughter of the spouse or cohabitee.
Since the enactment of Law No. 23,264 and pursuant to the American Convention on Human Rights (Convención Americana sobre Derechos Humanos), Argentine law does not make a distinction between legitimate and illegitimate children (children born out of wedlock). As a consequence they have the same rights.
A civil partnership is a legal union or contract, similar to a marriage, between two people of the same sex.
Minors are represented, in general terms, by the surviving parent. If no parent survives, the court designates a legal representative (curador) to handle all the assets on the minor's behalf. Disposition of assets usually requires court approval.
A minor can inherit and own assets through his legal representative.
Capacity and power of attorney
A court procedure is required in order to declare that a person has lost his legal capacity. The court appoints a curator to represent the person whose incapacity has been declared.
Argentina recognises powers of attorney made under the law of other jurisdictions. However, once a person is declared incapable by court, under Argentine law, any and all powers of attorney are terminated.
Proposals for reform
Juan Pablo McEwan, Partner
McEwan, Roberts, Dominguez & Carassai
Professional qualifications. Law degree from the Universidad de Belgrano, Buenos Aires, Argentina; specialised in Finance and Tax Law at the Universidad de Belgrano, Buenos Aires, Argentina; attended graduate courses on American Law and International Trade Law at Tulane University, New Orleans, Louisiana, USA and at the University of California at Davis, California, USA; Professor of Finance and Taxation at the School of Law of both the Universidad del Salvador and the Universidad de Belgrano, 1995 to 1997/2004; selected by the ALADI as an advisor for the development of research studies on the impact of electronic commerce on tax systems for member countries, 2002
Areas of practice. Specialises in private client work, with an international focus on estate and tax planning, and trust and succession planning.
Languages. Spanish and English
Professional associations/memberships. Member of the following professional associations:
Argentine Bar Association (Colegio Público de Abogados).
San Isidro Bar Association (Colegio Público de San Isidro).
Argentine Association of Fiscal Studies (Asociación Argentina de Estudios Fiscales), Buenos Aires, Argentina.
Master's Scientific Committee for Finance and Tax Law, Universidad de Belgrano.
Publications The Private Wealth & Private Client Law Review, Chapter: Argentina (co-author), Law Business Research Ltd, 2012.
Agustín Lacoste, Associate
McEwan, Roberts, Dominguez & Carassai
Professional qualifications. Law degree from the Pontificia Universidad Católica Argentina, Buenos Aires, Argentina
Areas of practice. Tax planning, tax litigation, corporate.
Professional associations/memberships. Member of the Federal Capital Bar Association (Colegio Público de Abogados de la Capital Federal)