By Anabella Murillo


In December, Argentina became one of the first countries to make official moves to impose a tax on great fortunes of high-net-worth individuals. The levy aims to help the government pay for some of the costs incurred during the COVID-19 pandemic.

The tax – labelled a ‘extraordinary contribution’– has already been passed by the government’s Senate, but there currently remains little clarity or regulation as to how the tax will be implemented or paid. While the additional revenue would help to support some of the government’s COVID spending, Argentina is also grappling a weak peso, high unemployment, as well as struggling to pay foreign debt amounting to more than USD100 billion.

Who will be eligible to pay?

The new tax is expected to be one-time tax, payable by Argentinian individuals with personal wealth equal or above 200 million pesos (equivalent to just under EUR 2 million). Between 1% – 3% of a millionaire’s wealth will be eligible for the tax and wealth held outside of Argentina would incur an additional 50% surcharge (from 2% to 5.25%) . It’s estimated that around 12,000 Argentinian’s will be taxed, and the revenue raised would amount to more than USD 3 billion.

Wealth taxes: good, bad or ugly?

Argentina’s government has specified that the revenue raised by the new tax would specifically be destined for medical supplies, supporting small and medium business and social developments, rather than for other uses. For many wealthy Argentinians, however, this new tax is a contentious issue for a number of reasons.

While many HNWI and wealthy families actively want to support Argentina’s economy, jobs and help those who have suffered as a result of the pandemic, there are complex questions arising from the new tax. There are arguments that the levy could be considered unconstitutional given lawyers and specialists believe the tax could go against Argentina’s Constitutional “Equality Principle” which could therefore be considered “confiscatory”.

There are also other considerations: if Argentina’s government hadn’t racked up so much foreign debt, had addressed poverty, employment and socio-economic issues more carefully pre-pandemic, would the country have been able to weather the COVID-19 outbreak better? In essence: are the wealthy picking up the tab for COVID, or for poor government decisions?

‘There are no easy conversations about taxes over fortunes. Many Argentinian’s feel a deep sense of solidarity to their country, and they want to provide help and support to others. These individuals typically deploy their wealth actively into Argentina’s economy with significant investments, running businesses that create employment, philanthropy and so on. What they don’t want to do is pay for the government’s past – or future – mistakes. They want to protect their hard-won wealth that’s been earned and taxed in Argentina, often over several decades,’ explains Anabella Murillo, Business Development Director, ZEDRA Miami.

Assessing the options

Some Argentinians are already looking at setting up a tax residency abroad, and others are looking at estate planning and structuring options that will protect their wealth in the long-term. Many Argentinians are working with their advisors to understand possibilities that would might work for them, with irrevocable and discretionary trusts being a popular consideration. Foundations and charitable giving are also high on the agenda in the context of wealthy families and individuals looking to support those in the country that need help.

‘We are seeing more interest in estate and succession planning structures for Argentinians. UNHWI and families are seeking individual advice on the best way to structure their assets for tax efficiency and wealth protection, not necessarily in the context of the new tax on fortunes, but as a result of the pandemic in general. For many families, the events of 2020 has been a catalyst to ensure that they have structures in place for succession and estate planning, particularly if these were not in place before now,’ says Anabella in conclusion.

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