Various statistics and international studies show that Argentina is one of the countries with the highest tax pressure. Its tax structure is around 170 liens –a record figure in the world– and private estimates show that an average taxpayer works about half a year just to pay taxes. However, the Government does not seem to have found a better solution to the chronic fiscal deficit to continue increasing taxes and creating new ones. The shameful fiscal pact recently signed between the national State and the provinces, with the exception of the city of Buenos Aires, is a clear sign: it not only enabled increases in absolutely distorting taxes such as Gross Income and Stamps, but also led to the creation by of the provinces of the inheritance tax.
This tax only applies today in the province of Buenos Aires, where it has been applied since 2011 and taxes free transmissions that exceed 1,344,000 pesos in the event that they are from parents to children or spouses, or those from 322,800 pesos when there are other relationships. Such aliquots range from 1.6 to 6.4% depending on the level of property transferred and the degree of kinship. It affects those natural or legal persons who receive a property located in the province or who are domiciled in it even though the property in question is located in another district of the country.
Another emblematic case in this type of tax was Entre Ríos, where this tax was applied, but ended up being repealed, after being declared unconstitutional by the local Supreme Court of Justice, at the request of a presentation made by professional associations of the province. Among the points that founded the declaration of unconstitutionality, it was proven that it violated tax principles of equality and non-confiscation and the constitutional principles of proportionality, territoriality and protection of the family.
Specialists in tax law agree in pointing out that the Government’s initiative, which should be discussed by the legislative powers of each province for its sanction, should not be applied given the very high current tax pressure and based on the fact that we would be facing a new tax on the same good, for which a case of double or multiple taxation.
The defenders of the tax on the free transfer of assets mistakenly argue that it would be a progressive tax, since it would tax those who are going to increase their assets. Strictly speaking, we would be facing the state appropriation of part of a good that is the fruit of the work of a person or a family, and for which taxes have already been paid for years. Somehow, constitutes another interference of the State in family relations, while embezzling the last will of a deceased who wanted to transmit or donate to his heirs what he obtained with his personal effort.
Our tax history shows the existence of an incompatibility between the inheritance tax and the global wealth tax of individuals. Countries that tax the free transfer of goods do not usually have taxes on personal property, as is the case in Argentina, where, in addition, real estate and automobiles are taxed with other superimposed taxes, such as real estate and patents, respectively, for not to mention the tax on large fortunes created in the current national government management.
Territoriality would pose quite a few problems if the projected tax were applied in some provinces. As the specialist Santiago Sáenz Valiente affirms, if this tax were to be disseminated in several or in all the provincial districts, it would be necessary to propose cross payments on account by virtue of the physical location of the affected goods.
The norm that governs today in the Buenos Aires area, for example, already has facets that would make it unconstitutional. “This is a tax burden with strong distortions, since it is finally taxed on real estate and registrable assets, unacceptable presumptions are set and it is intended to reach assets that are in a strange jurisdiction and even outside the country, for the mere fact of that the beneficiary resides in the province of Buenos Aires”, asserts Sáenz Valiente.
The distortions that the projected tax would generate in practice abound: dFrom those who want to give their child a property and realize that it could be more profitable to sell it and give them the money to avoid paying the tax, even in the case of a married couple that divorces and in which one of the parties, at the time of the division of assets, you want to give your ex-spouse more than what would correspond to him, but would be forced to pay the tax if it were understood that it is a donation.
The increasingly suffocating tax pressure only means that a growing number of people with good purchasing power choose to settle in other countries or change their tax residence. The official report of the Mediterranean Foundation reported that, from 2019 to 2020, the number of Argentines who processed tax residence in Uruguay tripled and doubled in 2021. The neighboring country grants tax holidays for ten years for everything they have outside the country. The same is happening with Argentine citizens who establish their fiscal domicile in Spain, the United States and Paraguay.
As with many other taxes, it is expected that the collection imagined by the bureaucrats for this new tax will end up being much lower and that the costs of this unstoppable confiscatory fiscal voracity will be much greater than its eventual benefits.