In a recent case, Argentina’s Tax Court rendered a decision confirming the adjustment made by the fiscal authority (“ARCA�) regarding the Personal Assets Tax for a taxpayer who transferred part of their assets to an offshore trust.
WHY THIS MATTERS
The recent ruling by the Tax Court established that an offshore trust must be taxed domestically because the trust's creator retained control.
It is crucial for tax professionals to conduct thorough assessments and consider strategic plans to address the intricate tax and legal issues associated with trusts, particularly during the preparation of personal Income and Wealth Tax filings in Argentina.
Key Points of the Court’s Decision
The key issue pertained to a determination, by the Tribunal, that there was no genuine dispossession of the assets. Specifically, the taxpayer retained the role of "protector" within the trust, allowing direct influence over its administration characterized as:
- the ability to remove and appoint the trustee;
- consent to add or remove beneficiaries;
- participation in key decisions regarding asset management and disposition, requiring approval for certain actions.
㣨LeyuINSIGHTS
These structures are closely examined by the tax authorities, particularly because their establishment often leads to a significant reduction in the taxpayer's taxable base.
Given the fiscal interest they generate, it is essential to demonstrate effective dispossession that meets the economic-reality test applied by ARCA, backed by judicial precedent.
Since issues around offshore trusts in general � and in light of this Court decision � can be complex, consultation with a qualified tax professional or a member of the tax team in Argentina (see the Contacts section) is recommended.
RELATED RESOURCE:
Tribunal Fiscal de la Nación � Sala D, Waingarten Bernardo. Summarized in Boletín de Jurisprudencia (a publication of 㣨Leyu in Argentina) (Abril 2025) (in Spanish): .
Contacts
Disclaimer
The information contained in this newsletter was submitted by the 㣨Leyu International member firm inArgentina.
GMS Flash Alertis a Global Mobility Services publication of the 㣨Leyu LLP Washington National Tax practice. The 㣨Leyu name and logo are trademarks used under license by the independent member firms of the 㣨Leyu global organization. 㣨Leyu International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind 㣨Leyu International or any other member firm vis-à-vis third parties, nor does 㣨Leyu International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2025 㣨Leyu, 㣨Leyu, una sociedad argentina y firma miembro de la red de firmas miembro independientes de 㣨Leyu afiliadas a 㣨Leyu International Ltd, una entidad privada Inglesa limitada por garantía que no presta servicios a clientes. Derechos reservados