Inheritance tax: the province of Buenos Aires is the only district that applies it, rates and exceptions

The government has defended that the provinces can advance in 2022 the application of what is called the inheritance tax, a mechanism that is used in much of the world to collect by the free transfer of assets, whether by bequest or donation.

Until now, the only neighborhood which applies is the Province of Buenos Aires, which raised just over $ 83 million for the concept last year.

the the debate on this tax is global and the Organization for Economic Co-operation and Development (OECD) advised in May 2021 that the nations apply or download inheritance tax as a mechanism “which can play an important role in increasing income, reducing inequalities and improving efficiency”.

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President Alberto Fernández receives governors from 5:00 p.m. to sign the Fiscal Consensus, which allows provinces to initiate or at least discuss the implementation of inheritance taxes. Horacio Rodríguez Larreta’s administration refused to sign this agreement because “it includes a tax increase”.

The Secretary of the Provinces, Silvina batakis, felt that it is “tax best viewed by the international academy in that many speak of meritocracy. But it’s not meritocracy when you get different inheritances over time and how they stack up ”.

What is inheritance tax

It’s a tax on any increase in wealth obtained free of charge following a transfer or an act of this nature, which includes “property located in its territory and / or benefits to human or legal persons domiciled there”.

The tax can reach the following situations:

  • the inheritances;
  • the legacy;
  • Donations;
  • the advances of inheritance;
  • Any other transmission what is a wealth enrichment for free.

The history of inheritance tax in Argentina

With variations, the homage made a long trip to Argentina. The first antecedent may lie in 1801 when it was established Inheritance tax, which had aliquots between 1% and 4%; for inheritances between spouses, collaterals or in favor of foreigners. has compiled a book by economists Andrés Cappa, Augusto Bouzas and Melisa Girard from the Floreal Gorini Cultural Cooperation Center.

Work abounds which in 1853 the tax was ratified by the provincial jurisdictions and national territories of the time and was called “Tax on the free transmission of goods”.

Already there 1923 renamed the inheritance tax, which it applied to children, which endowed it with a greater redistributive capacity; and the proceeds were used to finance primary education.

In 1951At the same time, the law established the application throughout the national territory of the “Tax replacing the tax on the free transmission of goods”. It imposed 1% per annum on the assets, both in capital and in reserves, of capital companies. It was in effect until 1973, when it was repealed and replaced by the “Net Worth Tax”, to incorporate people as tax subjects.

One year later, in 1974, the law that created the “Free of tax on wealth enrichment”, which only concerned assets located in the federal capital and added “shares, quotas or social participations and other securities representing capital”. Dlasted two years, was repealed and the Wealth tax throughout the national territory.

How inheritance tax is applied in the province of Buenos Aires

In 2009, the debate on the collection of inheritance tax returned to the fore. The province of Buenos Aires is the only one since 2011 the wall lamp.

Thus, natural or legal persons domiciled in the province, or a beneficiary who receives property located in the constituency, pay tax when free streams exceed $ 1.34 million in case they come from parents, children or spouses, While for other relationships or “acquaintances” is billed from the $ 322,800.

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If it is a urban property intended for a single-family house, the payment of the tax will be exempt provided that the free transmission is due to a death in favor of the spouse, ascendants or descendants and that does not exceed $ 1.15 million.

the Buenos Aires Treasury added 0.2% to its collection last year tributary total in the concept of Free Goods Transfer Tax (ITGB). He raised $ 83 million which, according to provincial tax law 10,397, goes to education.

Which countries have inheritance taxes and how do they apply them?

According to a book by OECD, 24 member countries of this organization collect an inheritance or bequest tax. However, the entity warned that the income from this concept has weakened overtime. Nowadays, represent 0.5% of total tax revenue of the OECD, when in the The 1970s were double that.

There are 21 nations this they collect heir tax, while in United Kingdom, Denmark and United States the inheritance tax, which applies to the equity of the deceased person.

According to the report, as of May 2021, South Korea at the forefront of collected revenue for inheritance tax, with 1.6% of your total. they follow him Belgium (1.4%); France and Japan (1.3% each) and Finland (0.7%). The OECD average is 0.53%. Meanwhile, the last place is occupied by Lithuania with 0.1% of the total collected.

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