The lowest equity value reached by the Personal Property Tax for the current 2022 will be around $11.28 million, while the home will have an exemption in the amount of up to $56.4 million. The figures arise from updating, as established by law, those that were in force for fiscal year 2021, when the tax base was $6 million and the ceiling on the exemption of the property inhabited by the taxpayer was $30 million.
This is the first year in which, to define the scope of the tax, an adjustment of the amounts for inflation must be applied, because this is established, effective as of fiscal year 2022, by law 27,667, which was approved in December of last year. This rule provides that the values of the Personal Assets scheme are readjusted, each year, according to the interannual variation of the Consumer Price Index (CPI) to the month of October. Last Wednesday it became known that In that twelve-month period, the prices measured by INDEC increased by 88%.
Consequently, that is the percentage increase that must have, not only the amounts of equity exempt from tax, but also also the values included in the tables (one referring to assets in the country and another to assets abroad) which, depending on the amount of assets reached by the tax burden, determines the rate to apply.
Thus, if the equity value, once the $11.28 million has been discounted, does not exceed $5.64 million, an aliquot of 0.5% will correspond (this threshold was, by 2021, $3 million). This level of taxation corresponds to the lowest step of the table that governs goods located in Argentina. The values are approximate, since the final number will depend on the rounding applied by the AFIP to the decimals of the inflation index.
In the second step of the table, those who have assets that exceed $11.28 million for a figure between $5.64 million and $12.22 million, will pay an amount of $28,200 plus 0.75% calculated on what exceeds $5.64 million. In the next box, for assets between $12.22 million and $33.85 million (in excess of $11.28 million), a fixed amount of approximately $77,550 will be paid, plus 1% of the excess of $12.22 million.
Then, if the set of encumbered assets add up to more than $33.85 million and up to $188 million, the annual tax would be around $293,750 plus 1.25% calculated on the amount that exceeds $33.85 million. And the patrimony in the country is greater than $188 million and up to $564 million, the tax will be about $2.22 million (fixed amount) plus 1.5% of what exceeds $188 million. Finally, if the equity is more than $564 million, the rate will be around $7.86 million (fixed figure) plus 1.75% of the excess of $564 million.
In the case of assets located abroad, the rates are higher. They are 0.7% if the total assets of the taxpayer (in the country and outside the borders) exceed (above $11.28 million) $5.64 million; 1.2% for assets of more than $5.64 million and up to $12.22 million; 1.8% if the amount is between that last value and $33.85 million, and 2.25% when the figure is greater than $33.85 million. The figures, as already indicated, are approximate and result from updating according to year-on-year inflation to last October.
Beyond the update that, for the first time, the amounts that define who and how much are taxed will have a predetermined mechanism, the values that are declared for the encumbered assets have their own readjustments which, in that case, are not new this year.
In the case of real estate, for example, the value to be consigned is the greater of two that must be observed: the acquisition or entry into the estate, deducting an amortization, or the tax. In the second case, the amount reported by the corresponding jurisdiction (for the definition of local real estate taxes) for the month of December 2017 must be considered, and adjust that figure for the accumulated inflation since then and until December 31 of the period to which the tax corresponds. By 2022, then, the valuation of five years ago should be multiplied by approximately 9.3, if the annual price index to next December turns out to be 100%.
Regarding holdings of foreign currency or assets valued in this way (because they are abroad) the value of the exchange rate published at the time by the AFIP is used for the particular declaration of this tax, which responds to the selling price of Banco Nación, on the last day of each year. And in the case of certain investments or vehicles, the values reported by the collection agency must also be observed.
Personal Assets, a tax questioned in several of its aspects by economists and tax experts (one of the criticisms is that, for its calculation, liabilities are not discounted), It made news again these days because Congress approved the extension of its validity (it was set until the current 2022) for five more years. The extension of the term was contemplated by a law approved last Wednesday, That includes a life extension for other taxes as well.
Between the achieved goods for the Personal Assets Tax are real estate, vehicles (they are taxed up to 5 years after their entry into the patrimony), savings that are kept in bills (in pesos or in foreign currency), registered personal property, balances of current accounts, titles, shares, quotas or social participations, the patrimonies of companies or sole proprietorships, credits, and assets and deposits abroad.
Instead they are free from tribute fixed-term deposits, bank savings bank balances, individual retirement insurance accounts, cooperative membership fees, rural real estate, titles and bonds issued by the State at different levels, negotiable obligations and Shares of mutual funds that meet certain conditions established by the regulations.
The annual declaration of Personal Assets, which is made in the year following the one in which the obligation corresponds, implies “take a picture” of assets as of December 31. Therefore, the way in which the estate is integrated on that day determines what the payment obligation to the treasury will be.