Ingresos Brutos is a punishing retention

  • Ingresos brutos (English: total income) is a swingeing tax retention that you pretty much have to pay in advance of your income if you're self employed. For example, you make a monthly contribution and then it's tallied up at the end of the year against your actual income and then adjusted. At least that's the theory and the way I understand it.

    Adri's lad had some virtual money he wanted to put into my Mercadopago (MP) account to buy something because the system is so simple and the only way he could do it was by MP.

    If he transferred it to Adri's bank account she would have to pay 3.5% ingresos brutos which is retained immediately at her bank.

    So he paid it to my MP and they took it from there instead.

    The tax authorities have the power to dip into your account like this, so it's no wonder the black economy thrives so much. They steal it at source.

  • I have been debating internally on this for quite some time. How is it that in countries like this one and my homeland they tend to over control people and suffocate any business initiative with too many rules?


    I follow several translators’ forums and what they have to deal with in is astonishing. Many have an accountant do their invoices, even, because now the taxman wants to invoice using their system.


    Some software developers have created softwares that have a better user interface and advanced capabilities that then transmits data to the taxman system. But it is a pain because it takes into account so many possibilities.


    I think it is a ridiculous for a freelancer to need to be that skilled just to do the accounting part. We should concentrate on working, not on playing the accountant part.



    Sent from my iPhone using Tapatalk

  • The tax system in this country is so complicated and aggressive that Adri has clients that phone her almost every single day. AFIP is a monolithic organisation which is adept at moving the goalposts at the last minute, undoing weeks of work on Adri's part.

    Self employed invoices now have to be produced electronically, so that they know your actions at every turn and with the slightest suspicion from AFIP that you've stepped over the line, your bank accounts get frozen.

    Keep an emergency fund under the bed is my advice.

  • In Italy, by default they think you are at fault.


    I hate living there because I felt bullied by public officials. The general attitude is 'you are a liar' and you have to advocate for yourself, go to public offices with copies of the law(s) at hand and argue to have things done.


    For example, I went to my consulate a while ago to discuss something. I had a lot of copies of Italian laws and Argentinian laws, with highlighted the relevant parts. I felt very prepared for my appointment, I had rehearsed my speech with my husband. But when I went there, the lady was stuck at:

    1) I don't know what the Argentinian law is and I don't know this thing you are showing me is true or not (it was a printout of the law).

    2) when the Italian law says 'In Italy' it means in the Italian peninsula, while here we are in Argentina, so when the Italian law says 'you have to do this to present translations of foreign records in Italy' it doesn't include Italian consulates abroad.


    Another instance was at the tax office in Italy. I went there to register a rental contract (I was the tenant), and there was a small issue. At the branch they said I couldn't register it because the landlord had over 10 properties under her name (she had 11), and intermediary was required and the landlord should have authorized the intermediary. However, the law says if you have over 11 residential properties, whereas our landlord had 5 residential properties and 6 pieces of land.


    The national call center of the tax office said we were right, only the residential properties should have been counted, but at the tax branch we stirred up everything insisting they register our contract, saying we called the national call center and confirmed we could.

    The Director of the branch literally said: "I don't care what the call center says. My office, my rules". WTF?!


    We were trying to register it ourselves because the landlord was an elder lady and the tax office was 20 km away.

  • Today I did a delivery job, sub-contracted to me by a bloke who's bike is off the road. In fact, it's the second one I've done for him and this time we decided on him paying me through MercadoPago.

    It's convenient and immediate, until you discover that the government takes 2%, even though you use the so-called, 'send money to a friend'.

    No wonder so many Argentines work in black/cash because the government is screwing you up the arse most of the time.

    Many profanities, which I cannot repeat here. :smiley-on-fire:


  • For what he said, or for driving while ranting?

    Both. some are telling him that if he were abroad he'd be fined for driving without a seatbelt. Others are insulting him because he doesn't want to pay his share of taxes (which is not what he said). Others tell him that he is ridiculous for being 'envious' of a poor single mother receiving subsidies from the government and selling hand sanitizer at her small kiosko while is 'getting rich' with his company.


    The more you work, the more you are 'punished' by taxation. I am not against taxes being proportional to one's income. However, when the tax thresholds are set too low, they don't incentive people to grow their business because it means a lot more work for a smaller reward.


    In fact, just like in the video Splinter posted, the girl working in black and getting subsidies is earning more money than him who is doing things legally and trying to grow a business.


    Unfortunately, Argentina reminds me a lot of Italy. When I was still living in my home country, I had a full-time job on a temp-contract - I had 6 contracts in 6 years, always at the same place - this was borderline illegal but my employer's lawyers had devised this very well to keep it on the legal side.


    Since I had no prospective to be hired permanently nor to progress in my career, I wanted to start a freelance job on the side. I was REALLY committed to work to it after my office job and until late night, every day and on weekends. But when I run the numbers with my father's accountant, he told me it was not worth it: having a freelance activity would simply put me in a higher tax bracket where I would be taxed even more than on my office job. And it would push away any chance of being hired with a long term contract, because my employer would simply see an even better opportunity for him: to hire me as a consultant, with less costs for him and more for me.


    Ultimately, when my office job fell, I tried to get a new one and when I couldn't, I left the country. Like me, in the last 13 years, 2 millions Italians have left Italy.


    Recently, Italy has started a sort of low-tax scheme to attract repatriation. So I dug a little and found out that the low-tax scheme is only for a couple of years, and then you are charged normally. They also introduced a simplified taxation regimen for small freelancers. Before that, freelancers needed to pay for an accountant all year long, since accounting is very complex. In a year, the accountant's fee is over USD 1000 - for a small freelancer this a lot of money! My US CPA charged less than $200 and I needed him once per year, and he was available to reply to my questions all year long.


    I heard praises of this simplified accounting regimen that has been introduced recently, so I found a page doing a simulation of taxation for a freelance graphic designer. Yes, the accounting is simplified but taxes are still more than 50% overall. From a gross earning of €45,000/year, our freelancer is left with a net of € 20.807,28 which means 46,24% of his gross earning. And there may be further money to pay for private retirement funds, the article specifies.







  • What do you do with all those receipts?


    My wife keeps EVERYTHING...she has piles and piles of receipts from dog food to utility bills . At least she has them all filed away. Her mother's house has bundles of deeds and God knows what else piled up in a room. If it were left to me I'd chuck them all out as I hate clutter.

  • Do you ever need to produce receipts for AFIP or proof of purchase? It would be awful to accidentally throw out deeds or checks that are lost in a pile of empanada delivery and Royal Canin receipts.