The Private Wealth & Private Client Review: Argentina


Argentina is home to many wealthy individuals and families. Only a small group of these have received sophisticated technical advice in matters of tax planning and estate succession. Consequently, there is an important group of wealthy people lacking an adequate tax, financial and succession plan for their estates.


i Income tax

Income tax is a national tax applied on the worldwide income obtained by individuals and legal entities domiciled in Argentina and Argentine branches of foreign entities.

Foreign resident individuals are taxed only on their Argentine income source through a withholding system and based on their presumed income. In general, foreign individuals are taxed at a 35 per cent flat rate.

Domestic individuals are taxed on a sliding scale ranging from 5 to 35 per cent depending on the income subject to taxation.

Capital gains and interest from sales derived from sovereign and private bonds, debt securities and other similar securities that are listed in Argentina are generally exempt for individuals and foreign residents.

In the case of Argentine individuals, capital gains from the sale of shares or equity interest is subject to a 15 per cent rate on net income. The sale of shares or equity interest by Argentine individuals or foreign entities is exempt from capital gains tax in the following cases: when the shares are placed through a public offering authorised by the National Securities Commission (CNV); when the shares are traded in stock markets authorised by the CNV, under segments that ensure price-time priority and interference of offers; or when the sale, exchange or other disposition of shares is made through a tender offer regime or exchange of shares authorised by the CNV.

Foreign beneficiaries are either subject to a 15 or 13.5 per cent rate on the gross amount paid for shares or equity interests, unless the exemption for listed securities mentioned above is applicable. Indirect sales of Argentine entities (i.e., sales of foreign companies that own shares of Argentine companies) can also be subject to income tax in Argentina, if certain requirements are met.

ii Personal asset tax

With regard to taxes on property, all Argentinean residents are subject to personal assets tax on their worldwide assets. The taxable base is, in principle, the value of such assets (except for a few exceptions, debts are not deductible). Foreign residents are subject to this tax only upon their assets located in Argentina.

As of 2020, a progressive rate that varies between 0.50 and 1.25 per cent is applicable. In the case of assets located abroad by Argentine residents in December 2019, applicable rates were raised and can reach 2.25 per cent. These higher rates would not be applicable if the taxpayer chooses to repatriate at least 5 per cent of the foreign-based assets at the end of the calendar year before 31 March of the following year, and maintains the funds on special accounts opened in Argentina until 31 December or uses them for certain authorised investments (which are currently quite limited).

Two million Argentine pesos was established as a taxable minimum, and the personal home of the taxpayer (up to 18 million Argentine pesos in value) should not be taken into account to assess whether such minimum has been exceeded.

In the case of individuals, savings deposits in Argentine banks and Argentine sovereign bonds are exempt from tax. However, other securities are usually taxed. In the case of ownership of shares of Argentine companies, the tax is paid by the company.

In 2020, a one-time only tax on high-net-worth individuals to finance a covid-19 stimulus programme was created. It was payable by Argentine resident individuals and undivided estates valued at more than 200 million Argentine pesos as of 18 December 2020, and non-resident individuals with assets located in Argentina that exceed such value. Tax rates of 2 to 3.5 per cent apply to assets located in Argentina, and rates of 3 to 5.25 per cent to foreign assets. Several potential taxpayers have filed lawsuits requesting courts to declare the tax unconstitutional.

iii Gift and succession taxes

In Argentina, only the province of Buenos Aires has gift and inheritance taxes. There is currently no such tax nationally or in the remaining provinces.

In Buenos Aires, tax is levied on any asset received free of charge, such as gifts, donations, inheritances and legacies, if received by residents or, alternatively, if they involve assets deemed to be located in the province.

In the case of shares and equity interests, these assets are deemed to be located in such province (and, therefore, taxed regardless of the residence of the beneficiary) if the company is incorporated in such jurisdictions, if the shares are physically located there or, controversially, if the companies own assets within the province (and in such proportion). For tax assessment purposes, the shares will be valued at the net asset value of the latest closed financial statements.

The applicable rates vary between 1.6026 and 8.7840 per cent, depending on the relationship between the beneficiary and the contributor and on the value of the assets. The tax's threshold varies depending on this relationship and is usually adjusted annually.

iv Issues relating to cross-border structuring

Local residents can register for foreign tax credits, taxes paid abroad that are deemed equivalent to income tax and personal assets tax, up to the amount of the tax payable in Argentina for the income or assets located or obtained abroad.

In the case of Argentine residents that are stockholders of foreign entities, tax credits for taxes paid abroad for direct or indirect investments in foreign companies can be offset against the payable income tax in Argentina on dividends paid by such entities. In the case of direct stockholders, the local taxpayer must be able to prove ownership of at least 25 per cent of the foreign company's equity. In the case of indirect shareholders, a minimum 15 per cent ownership must be proved. Foreign taxes paid can be used as a tax credit up to a second-tier subsidiary. In this case, the subsidiary cannot be located in a country deemed to be a tax haven, pursuant to Argentine regulation.

In the case of investments involving derivatives, there is some controversy regarding the potential use of income taxes paid abroad as credits. Income deriving from derivatives is deemed to be Argentine income if its recipient is an Argentine resident. Domestic rules regarding foreign tax credits establish they can only be used by a local resident if they are linked with foreign source income. Therefore, although debatable, these credits could not be offset against income tax derived from this type of operation, unless a specific double taxation treaty states otherwise.

Argentina has double taxation treaties in force with Australia, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland, the UK, the UAE, Qatar and Uruguay. These treaties may set forth limitations to the country's tax jurisdiction in relation to income or personal asset tax and special rules regarding foreign tax credits. Except for the treaties with Bolivia and Uruguay, Argentine double taxation treaties are based on the Organisation for Economic Co-operation and Development (OECD) and UN tax models.

v Issues impacting entrepreneurs as holders of active business interests

Argentine corporations and limited liability companies are not pass-through entities pursuant to Argentine legislation and, therefore, must report their income and pay the resulting income tax at a 25, 30 or 35 per cent rate (depending on the income). These two types of entities comprise the vast majority of Argentine companies.

Payment of dividends and utilities by those entities is subject to an additional 7 per cent income tax in Argentina.

However, dividends paid by foreign companies are subject to income tax in the case of domestic individuals at a 5 to 35 per cent rate (unless an applicable double taxation treaty establishes otherwise).


i Applicable jurisdiction and law

On 1 August 2015, a new Civil and Commercial Code (CCCN) entered into force and replaced both the former Civil Code and the Commercial Code. As a consequence, the inheritance, matrimonial and private international law rules have been significantly amended, and there is still no sufficient case law on the issues addressed herein to fully foresee the final interpretation that the new provisions may entail.

According to the CCCN, succession to the estate of a deceased person is governed by the law of the country where the decedent was domiciled at the time of his or her death, regardless of the decedent's or his or her inheritors' nationality. However, and regardless of the above general rule, Argentine law will mandatorily govern all issues concerning real estate located in Argentina,2 and precludes the application of any foreign law. The CCCN further provides that the same law governs the content and validity of wills.

Regarding jurisdiction, the general rule is that the judge sitting where the deceased was last domiciled shall have jurisdiction to hear the case. There is an exception to this rule when real estate is located in Argentina, in which case the judges sitting at the place where the real estate is located have jurisdiction to hear the case.

It is worth pointing out that, pursuant to the Constitution, international treaties pre-empt domestic law. However, only two treaties are relevant for our analysis (i.e., the Treaties on International Civil Law (Montevideo) of 1889 and 1940), and given their limited territorial application,3 we will just point out that they set forth that the applicable law will be the law where the deceased person's assets were located at the time of his or her death and that wills granted through a public deed in any Member States of such treaty will be valid in all other Member States.

Although Argentina signed the 1989 Hague Convention on the Law Applicable to Succession of the Estates of Deceased Persons, this Convention is not yet effective, and has had a low rate of acceptance.

Argentina has not signed the 1961 Hague Convention on the Conflicts of Laws relating to the Form of Testamentary Dispositions.

ii Outline of Argentine succession system

Forced heirship system

Argentina has a forced heirship system that limits the individual's ability to freely dispose of his or her property by gifts inter vivos or wills. In this regard, according to the law, individuals are able to dispose of their property by any of these means as long as a minimum share of their estate (reserved share) is reserved for their spouses, descendants and ascendants (forced heirs).

Descendants have the right to a reserved share of two-thirds of the decedent's estate, whereas ascendants and spouses have the right to reserved shares of half of the estate of the deceased.4 If there are heirs entitled to share the state with different reserved shares (e.g., spouse and descendants), the highest reserved portion applies globally.

The general rules described above are, however, significantly different when there are disabled heirs. In that case, the law allows individuals to improve such disabled heirs' portion by reducing the reserved share of the other heirs by up to a third.5

The reserved shares are estimated using the aggregate value of the estate at the time of the decedent's death and the computable gifts provided for each of the forced heirs.6 In the case of the spouse, the value of the marital assets belonging to the surviving spouse shall be subtracted from the base of calculation.

Beyond the reserved shares, individuals may freely dispose of their property, either by gift during their lifetime or by means of a will. This disposable portion of the individual estate is called the 'available share'.

Notwithstanding all of the above, in limited and serious cases listed by the CCCN,7 forced heirs may be deemed unworthy of inheriting and, therefore, can be excluded from the succession (e.g., when any forced heir is judged to be the author, accomplice or participant in an intentional crime offence against the deceased, his or her honour, sexual integrity, liberty or property).

Order of vesting

The law also determines how heirs are vested over the deceased's estate:8

  1. Descendants: they exclude the ascendants and concur with the spouse. Concurrence among descendants and the spouse is limited to the decedent's non-marital property. Spouses do not concur as heirs with regard to marital property because they receive their half of such property as a result of the dissolution and liquidation of the marital property community. The decedent's own property is distributed in equal portions among all of the descendants and the spouse. Among themselves, descendants equally inherit the deceased's estate.9 Grandchildren inherit by representing the predeceased offspring.10
  2. Ascendants: if there are no descendants, ascendants concur with the spouse over the non-marital property in halves.11 Among themselves, ascendants equally inherit the deceased's estate.12 Closer generations exclude further ascendants.
  3. Spouse: the spouse may concur with descendants or ascendants.
  4. Collateral relatives: if no descendants, ascendants or spouse exist, collateral relatives, until the fourth degree of relationship, are equally entitled to the estate.

Legal actions to protect inheritance rights

Rightful heirs have two options to protect and demand compliance with their inheritance rights.

First, there is an equalisation action that seeks to protect equality among heirs within the same rank of concurrence. This action entitles any rightful heir to claim that certain kinds of gifts received by any other heir during the decedent's lifetime should be deemed as an 'inheritance advance', and therefore as part of the rightful portion of the inheritance corresponding to this heir. The result of this equalisation action would only be a credit arising out of the acknowledgement that another rightful heir has received an advance from the decedent, and that during his or her lifetime certain assets shall be deemed an inheritance advance to such heirs.

Second, there is a reduction action that seeks to protect the reserved share and is meant to reduce any device or bequest made in the will or as a gift inter vivos by the decedent13 to the extent that it prevents a forced heir's right to his or her reserved share. This action entitles any forced heirs to file a claim against those heirs, legatees and grantees that have received gifts and legacies in excess of their rightful portion or in excess of the available share to have their legacies reduced or their gifts returned. Reduction affects wills dispositions first, and in cases where their reduction were not enough to recompose the reserved share of the claimant, affects gifts, beginning with those more recent in time.

It may be reasonably construed that the reduction action regarding gifts is subject to a 10-year statute of limitation counted from when the heir, legatee or grantee took possession of the gifted asset.14 With regard to the reduction action against bequests or devises made in a will, no specific statute of limitations is provided for. It may be argued that the generic statute of limitation (i.e., five years) applies.15 However, it could also be construed that the applicable statute of limitation is 10 years (the term for accepting an inheritance), or even 20 years (the adverse possession term for real property).

Agreements on future inheritances

Any general agreement entered into by and between future heirs during the deceased's life is null and void.

However, the CCCN has allowed agreements over future inheritances as long as the covenants only fall over the equity of companies or other business ventures with the aim of maintaining the management unity or preventing or solving conflicts, and the dispositions do not deprive forced heirs of their reserved portions, nor affect the spouse or third parties' rights.16

iii Inheritance proceedings

After an individual has passed away, a judicial proceeding must commence (the inheritance proceeding) with the purposes of identifying the heirs, determining the content of the inheritance, collecting any outstanding credit, paying the debts, bequests and devises, and registering certain assets before the public registries.17

The inheritance proceeding is filed before the judge with jurisdiction in the decedent's last domicile or, in the case of real property located in Argentina, where the assets are located.18 If real property is located in several Argentine provinces, the applicant may (but is not required to) file its application in any of those jurisdictions.

The administration of the estate must be carried out by an administrator, to be appointed either by the testator or the heirs acting by majority. Non-resident individuals may be appointed as executors of the estate.

The length of inheritance proceedings varies according to the complexity of a case. A straightforward case (e.g., where few assets are located in urban areas and no minors are involved) can take approximately five to six months from its commencement to the recording of the heirs' title at the relevant registries.

iv Wills

Wills are unusual in Argentina and are generally only made by wealthy individuals. Most people die without making a will, in which case the rules on intestacy described above apply.

If made in Argentina, a will is only valid when made pursuant to the formalities provided by Argentine law.

Therefore, a will made by a foreigner in his or her country's consulate in Argentina may not be considered valid by an Argentine court, with the exception mentioned above in the Montevideo treaties for the signatories of such treaties.

Under general principles contained in the CCCN, a will made abroad is enforceable if it complies with the law of the place of its making, the testator's place of residence or the country of the testator's nationality.

v Marital property regime

The conflict of laws rules provided in the CCCN state that the marital property regime – in all that is not forbidden on matters of property by the law of the place where the assets are located – is ruled by the spouses' agreement. Spouses' agreements were not valid before the CCCN, and the only possible regime was the communal property regime. According to the CCCN, if the agreement was entered into prior to the marriage, it will be governed by the laws of the first marriage domicile. Agreements entered into after the date of marriage will be governed by the laws of the spouses' domiciles at the time of the signing of the agreement.

Under the CCCN, future spouses have the possibility (by entering into a marriage agreement) of choosing between a communal property regime or a separate property regime. The CCCN provides that, if no marriage agreement is made or the marriage agreement does not set forth any provision regarding the property regime, the traditional communal property regime will be applied.19 Conventions may be created for the purpose of designation and appraisal of the goods that each of the future spouses brings to the marriage; admission of debts; donations made between each other; or choice of a marriage regime.

The CCCN also provides that marriage agreements must be executed by means of a public deed to be valid, but for the marriage agreements to be effective towards third parties, the marriage certificate must include a note stating the regime chosen. If the spouses decide to change the regime, the amendment must also be made through public deed after one year of the marriage agreement's date. Creditors affected by this change may object within one year of the date they became aware of the change.

When a marriage is terminated (by 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 cancelled, divided and distributed equally between the spouses or the surviving spouse and the other spouse's heirs.

vi Same-sex marriages and cohabitation

Argentine law recognises marriage between same-sex couples, so the same marital property regime applies in such cases.

The CCCN also recognises certain rights of cohabitees provided they have been together for at least two years.

Through the means of cohabitation agreements, cohabitees will be able to regulate different aspects of their life together, such as economic aspects and other responsibilities.

The CCCN also provides protection for the family home and, in the event of the death of one partner, the survivor is granted the right of free housing in the home they shared for a period of two years. However, the CCCN does not recognise cohabitees' inheritance rights over their partner's assets.

Wealth structuring and regulation

i Commonly used vehicles for wealth structuring

As mentioned in Section I, only a small group of wealthy people has taken advantage of sophisticated structures to improve their estate and business organisation from a tax and succession law standpoint. Within this group it is common to see structures that take advantage of foreign trusts and foundations, combined with other structures that are more frequently used, such as company reorganisations and gifts inter vivos (usually structured in a way in which the grantor withholds the legal right of using and enjoying the fruits or profits of the property until his or her death). After the CCCN entered into force, the change of marriage regime emerged as another instrument for estate reorganisation.

ii Legal and tax treatment of commonly used vehicles and typical advantages and disadvantages to personal ownership or control

Before 2018, Argentine residents usually invested their wealth abroad through corporations or trusts incorporated in a foreign jurisdiction. No controlling foreign corporation (CFC) rules were applicable in the case of foreign corporations (or entities that issue shares), if these entities were incorporated in jurisdictions deemed to be 'cooperative for fiscal transparency purposes' and, therefore, Argentine income tax was paid when (and if) such entities paid dividends to their Argentine shareholders. However, in these structures, the shares owned by the individual were still subject to personal assets tax. These structures were mostly abandoned as a result of the modification of CFC rules in 2017. However, they are still very common when a single individual does not have control over the entity, or when such entities have active income, because CFC rules are still not applicable in those cases.

Another traditional structure used to benefit from this tax deferral was the creation of an irrevocable trust abroad. The main advantage of this type of trust was that the settlor would not have to pay personal assets on the assets transferred to the trust, provided that it is not disregarded by the tax authority and the assets are deemed to be owned by him or her, as an application of the substance over form principle.

This structure is still currently used, despite 2017 CFC rule changes. Trusts incorporated abroad are deemed to be fiscally transparent for income tax purposes only if they are controlled by Argentine residents, which may be deemed to occur if the settlor retains powers to decide where the trust invests, if he or she is also the beneficiary or if it is a revocable trust. If these requirements are not met, in general, foreign trusts would only be subject to income tax in Argentina for their Argentine source income and subject to personal assets tax for Argentine-based assets, but not on foreign income or assets.

Besides, tax-free reorganisation procedures are typically used to split family companies between their members, without any tax burden. These are complex procedures that require the compliance of several formal and substantial requirements, among which the prohibition for the owners to sell the reorganised entities or change their activities within two years of the reorganisation stand out.

Finally, to avoid commencing an inheritance proceeding and the costs involved (court tax and attorneys' fees), it is customary for individuals to grant gifts inter vivos.

iii Applicable anti-money laundering regime

The Argentine Criminal Code and Law No. 25,246 are the main regulations that govern and punish anti-money laundering offences.

This Law sets forth a list of regulated entities (involving both public and private entities, as well as natural persons) that are obliged to, among other duties, perform know your client procedures and report any suspicious operation to the Financial Information Unit.

Likewise, pursuant to anti-money laundering law, persons or legal entities that act as trustees or that own or are affiliated with trust accounts, trustors and trustees in connection with trust agreements, must carry out anti-money laundering measures that include, as mentioned, but are not limited to, know your client procedures, issuance of an anti-money laundering manual and training employees on the subject.

Argentina is a member of the Financial Action Task Force on anti-money laundering in South America, the Egmont Group and the Group of Experts for the Control of Asset Laundering, as well as other anti-money laundering-specific organs within the region and the OECD.

Outlook and conclusions

Even though there are some wealthy Argentine individuals and families that have been duly assessed to plan their estate organisation from a financial, tax and succession standpoint, a significant portion of Argentina's wealthy population still lacks accurate advice with regard to estate planning.

In 2016, a tax amnesty took place in Argentina, and in 2017, a significant tax reform was enacted. This, and the fact that anti-money laundering regulation is becoming tighter, may cause individuals to start structuring the organisation of their assets and succession.

In 2019, the personal assets tax rate was raised to 2.25 per cent in the case of assets located abroad. The news regarding this amendment generated interest in high-net-worth individuals in moving their domicile abroad to avoid the tax on their foreign-based assets. Interest in relocating abroad to lower the tax burden has increased since the tax on high-net-worth individuals to finance covid-19 stimulus programmes was passed in 2020.


1 Miguel María Silveyra is a partner and Valeria Kemerer and Enrique López Rivarola are associates at Beccar Varela. Gustavo Papeschi also collaborated in the preparation of this chapter.

2 CCCN, Article 2,644.

3 Montevideo Treaty of 1889, ratified by Argentina, Bolivia, Colombia, Paraguay, Peru and Uruguay, while Montevideo Treaty of 1940, only by Argentina, Paraguay and Uruguay.

4 CCCN, Article 2,445.

5 CCCN, Article 2,448.

6 CCCN, Article 2,445.

7 CCCN, Article 2,281.

8 CCCN, Articles 2,424 to 2,443.

9 CCCN, Article 2,446.

10 CCCN, Article 2,448.

11 CCCN, Article 2,434.

12 CCCN, Article 2,431.

13 Relevant case law (although prior to the CCCN) has ruled that the fact that a foreign trust (in the analysed case, a UK trust) was subject to foreign law, does not prevent the transfer from being subject to Argentine law for the purposes of an inheritance proceeding; and to the extent that the beneficiary had the right to demand the delivery of the proceeds of the trust and that such trust was incorporated for no consideration against the beneficiary, such trust should be deemed a gift under Argentine law (for the purposes of the equalising and reduction action).

14 CCCN, Article 2,459.

15 CCCN, Article 2,560.

16 CCCN, Article 1,010.

17 CCCN, Article 2,335.

18 CCCN, Articles 2,336 and 2,643.

19 CCCN, Article 463.

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