ARGENTINA-TEXAS

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  • 14 Nov 2019 1:40 PM | Lucas Lombardi (Administrator)


    North Texas District Export Council and Dallas – Ft. Worth International Airport organized the event LINKING TRADE FROM ASIA TO LATIN AMERICA for an overview and update on the airport.  Topics included air service, terminal F, government relations, and air cargo mainly focus on businesses between South America and Southeast Asia. Dallas - Fort Worth International Airport is one of the largest and busiest airports in the world, a world-class super-hub which drives regional, national and international commerce from a pivotal location.

    The event at DFW Airport Headquarters was opened by Jessica Gordon (Director, U.S. Commercial Service DFW) and Nate Muncaster (Chair, North Texas District Export Council) and Milton de la Paz (VP Airline Relations and Cargo Business) was the keynote speaker. Oscar Mary represented the Argentina-Texas Chamber of Commerce.


  • 28 Oct 2019 6:28 PM | Lucas Lombardi (Administrator)

    In 2010, e-commerce retail sales in the United States made up only 4.2% of all retail sales. However, by the last quarter of 2017, e-commerce sales made up 9.1% of all retail sales. In other words, at the end of 2017, these e-commerce sales totaled over $115 billion. E-commerce’s success does not appear to be a temporary phenomenon. It is projected that e-commerce’s retail growth will continue to expand going forward.


    Amazon has been a major player in the success of e-commerce. In 2010, Amazon’s revenue was found to be in an excess of $34 billion, and by 2017 the e-commerce giant’s revenue grew to $178 billion. Currently, Amazon owns 43% of all e-commerce purchases undoubitably dominating the space. Amazon alone accounts for nearly half of all e-commerce sales. However, other e-commerce retailers are also contributing to online sales. The success of e-commerce is directly tied to the growth of the industrial market.

    According to CBRE, E-commerce accounts for almost 9% of total retail sales in the U.S. today and has been growing nearly three times faster than brick-and-mortar sales since 2010. The impact of this growth on the supply chain is profound. A hallmark of e-commerce is superior service—a nearly infinite number of choices, fast delivery and flexible return options. This pressure on the supply chain has driven demand for industrial real estate to nearly unprecedented levels and has fundamentally changed the look of the modern warehouse.

    How much demand is coming from e-commerce users?

    It is commonly thought that an e-commerce supply chain requires up to three times more warehouse and logistics space than a traditional brick-and-mortar supply chain. Anecdotal evidence suggests that this is true, but a recent CBRE Research study found that for each incremental $1 billion growth in e-commerce sales, an additional 1.25 million sq. ft. of distribution space is needed to support this growth. Per CBRE, this suggests that of the 236 million sq. ft. that was absorbed in 2017, approximately 30% of it was attributable to e-commerce.

    Figure 1: 1.25 Million Sq. Ft. of Industrial Demand from each $1.0 Billion in E-commerce Sales

    Source: Forrester Research, CBRE Research, 2018.

    How is e-commerce affecting building design?

    CBRE research showed that demand for efficient logistics space that facilitates quick movement of goods to consumers has necessitated design of new warehouses that are larger in size and height. The average new warehouse in the U.S. increased by 108,665 sq. ft. (143%) in size and 3.7 feet in height when comparing high development activity periods in 2012-2017 and 2002-2007. Distribution markets that serve major population centers and have land for new warehouses saw building sizes increase the most, including Atlanta, the Inland Empire and Cincinnati. Rapidly growing e-commerce sales are the primary driver of this trend, and markets lacking sufficient modern logistics facilities have further expansion potential ahead to keep pace with this rising demand.

    Figure 2: U.S. Average New Warehouse Building Size

    Source: CBRE Research, CBRE Econometric Advisors, 2017.


    About the author – Houston Equity Partners LLC.


  • 28 Oct 2019 5:51 PM | Lucas Lombardi (Administrator)

    The Data Hype

    How many times since you woke up today have you heard the following words:

    • Big Data
    • ML or Machine Learning
    • AI or Artificial Intelligence
    • Algorithm
    • Data Science
    • Digital Revolution or Digitalization
    • Tranformation

    etc etc.

    Buzz words are labels

    In recent months, I have been very often puzzled with the dilemma: are these just "buzz words" or are we aware of the deeper implications of their meanings?

    Indeed, cloud-based computing power is allowing for a deeper understanding of the environment around us "disguised" through data signals. But can anything and everything be addressed through a combination of those words?

    To go deeper, I personally took on the task of wanting to learn more and be able to separate wheat from chaff.

    Keep learning to overcome the shadows of ignorance

    I embarked on my first online Specialization: Executive Data Management, offered by Johns Hopkins Bloomberg School of Public Health via the Coursera Platform.

    The intense course staged in 5 different units delivered by Proffs Peng Leek and Caffo, focused on deeply understanding how a data driven project should be developed. From choosing the right team members and organization layout to addressing real life cases such as the limits of tools to collect relevant data, we were finally exposed to a Zillow based project.

    This is only the first step of a process to really understand how to leverage data and drive true growth.

    Grow by exploring beyond the box

    Beside the tasks and assignments, by summarizing my takeaways I can project novel ways to engage.

    Online courses are great if you are really motivated

    • it personally became additive,
    • pushing me to stay up late
    • researching more, reading more
    • exposing my ignorance to the tests.

    The use of ML/AI in your discourse does not make it more interesting in my views

    • Not all the data is useful
    • do not rely on data to fill the voids of your vision....they will stay empty!
    • Share what you want to do with data more than the tools you will use.

    My ways of expressing data relative topics has drastically changed

    • Big data can become a liability more than a strength
    • Data without vision is fuzziness not intelligence
    • An algorithm is a tool that allows your teams to accomplish specific tasks.

    γνῶθι σεαυτόν (know thyself)

    As living beings we constantly generate data points which can describe our behaviors.

    As a matter of fact, we are the generators of those data sets.

    Being mindful of such power, we can study, investigate, learn and innovate without needing a buzz word to label us.

    By Giuseppe Liberati

    CEO Bridging Value

  • 28 Oct 2019 12:57 PM | Lucas Lombardi (Administrator)

    Making the Best of Experience


    Last year Eduardo Nuñez retired after more than a 30-year career at ExxonMobil preceded by a decade at IBM, but that doesn’t mean the former energy sector executive has any intention of just taking it easy in retirement. Instead, he has launched two new ventures, one of which is aimed at increasing the competitiveness of small and medium companies in developing economies.

    To start their new venture, Blue Wave, Nuñez and his co-founder Alma Del Toro, a former BP executive, will be taking their corporate experience and providing self-assessment and development services to small and medium Oil & Gas suppliers in Mexico. Blue Wave will kick off its activities in November with a workshop for 50 companies in Tabasco.

    it’s a win-win situation for the companies, the local governments, which want to promote economic development, and the IOCs (International Oil Companies),” states Nuñez.

    Whether fairly or not, IOCs have long been criticized for extracting natural resources from developing countries without making a real contribution to their economic development. Unfortunately, part of the problem is that it can be mission impossible for local suppliers to match the quality and standards of companies from the US and Western Europe, when the international requirements are not clearly stated in one single site.

    This is where Blue Wave wants to help. “These are companies that cannot afford the services of a consulting firm like Accenture,” says Nuñez. “We want to provide them with an affordable alternative.”

    For just over $1,200 per year, Blue Wave will provide companies with an assessment of their capabilities, a list of prioritized gaps and a mitigation plan. Training, best practices, tools and additional consulting will also be offered at affordable rates.

    It would be hard to find someone better suited than Nuñez to know what IOCs look for in their suppliers. Prior to his retirement in 2018, he served as ExxonMobil’s General Manager of Global Procurement, supervising a staff of 1,500. Previously he served as the company’s head of procurement for the Americas. He also held procurement positions in Tokyo and Brussels.

    Clearly proud of his accomplishments in ExxonMobil, and grateful for the growth opportunities the oil major offered as a company committed to inclusion and diversity, Nuñez believes there are five factors that make professional advancement possible. These are ethics, professionalism, a long-term commitment to the organization, being a team player and leadership.

    Despite his extensive procurement experience, Nuñez acknowledges that he faces new challenges with his start-up venture. “You have to do everything for yourself,” he says, from arranging meetings to putting together presentations to managing routine administrative matters. It’s a big change, but one he seems to be enjoying.

    To keep himself even more busy, Nuñez will assume the Presidency of ATCC in April 2020. Building on what ATCC has accomplished in its first three years will also be challenging, he says.

    The Chamber has accomplished a lot and that is thanks to all the work done by the people who founded it and others, all of whom did it on a voluntary basis. The Chamber has agreements with more than one hundred organizations. We have chapters in Neuquén, Buenos Aires, and Dallas.

    Another sign of the Chamber’s growth, he says, is the move toward a more formal process for planning and budgeting for the coming year. Like all start-up organizations working with limited resources and finances, he explains, the Chamber began operating on an ad hoc basis. That is changing, however, and in the fourth quarter of 2019 the organization will finalize and adopt a plan and budget for the 2020-21 period.

    Asked what he hopes to accomplish when he becomes President, Nuñez cites several goals, including strengthening the new chapter the Chamber is opening in Austin; continuing the Chambers expansion into new sectors like technology, health care and transportation and logistics; and building stronger relations with stakeholders.

    It was many years ago when Nuñez and wife, Adriana, left Argentina with their son, Santiago, and daughter, Maria. Adriana works as a math professor at the Lone Star College System and the children are grown now and have taken different paths in life. Santiago got his MBA at the Wharton Business School and is now working private equity in New York. Maria is wrapping up her master’s degree at Rice University and works as a teacher and social worker.

    That’s the way it is with children,” he says. “As much as they have in common, they often go in different directions.”

    A year after retiring from a long and accomplished corporate career, Eduardo Nuñez is taking a new direction, too.


    By Dan Krishock


  • 28 Oct 2019 12:37 PM | Lucas Lombardi (Administrator)
    The Expatriation Tax (Part Two)



    You are not subjected to the exit tax rules simply because you are a citizen or a long-term resident. You must do something to trigger the application of the exit tax: terminate your citizenship or long-term resident status.

    U.S. citizens can choose to give up citizenship, or have it taken away from them. Losing citizenship makes a (former) U.S. citizen an expatriate under the exit tax rules. Most people relinquish U.S. citizenship by renunciation. The process is straightforward: sign some documents, answer some questions, pay a fee, and make an oath in front of a U.S. consular official to voluntarily renounce your U.S. citizenship. Citizenship can be lost by methods other than formal renunciation. In a few instances, the government can take U.S. citizenship away from you. When the process is complete, the State Department issues a Certificate of Loss of Nationality to confirm that you are no longer a U.S. citizen.

    Green card holders are also affected by the exit tax rules. A green card holder must have been a lawful permanent resident in eight of the 15 years ending with the year of expatriation—in other words, the green card holder is a long-term resident (a defined term in the IRC). Only green card holders who are long-term residents are affected by the exit tax rules.

    Once long-term resident status is attained, there are two ways that a green card holder can trigger the exit tax rules. First, the green card holder can voluntarily abandon the visa status or the government might forcibly cancel the visa. This event causes the long-term resident to be an expatriate, subject to the exit tax rules. Visa status is voluntarily abandoned by filing Form I-407 with the USCIS.

    Long-Term Residents Make a Treaty Election Second, the long-term resident might trigger the exit tax rules by making a treaty election to be a nonresident, thereby ceasing to be a lawful permanent resident. The green card holder makes this election by filing a Form 1040NR for the year in question, with the treaty election on an attached Form 8833. The election, if made after the green card holder becomes a long-term resident, will cause the individual to be an expatriate.

    Are You a Covered Expatriate or Not?

    Once you have determined that you have expatriated (given up citizenship for citizens, abandoned visa status, or elected nonresident tax status for long-term residents), the next task is to figure out the consequences of that event. The exit tax rules will create two possible income tax consequences for citizens and long-term residents who expatriate: paperwork only or paperwork plus tax.

    Covered expatriates face the prospect of paperwork plus tax liability, while noncovered expatriates bear the paperwork burden only. U.S. persons who receive gifts or bequests from covered expatriates also suffer: They pay a tax when receiving a wealth transfer from a covered expatriate.

    “Covered expatriate” is a term of art, defined in the IRC. It means someone who is an expatriate (a citizen who has relinquished citizenship, or a long-term resident who has given up green card visa status or has made a treaty election to be a nonresident) and has failed (or satisfied, depending on your point of view) one of three tests.

    The three tests are designed to identify people who are rich (in the eyes of the IRC) or noncompliant with U.S. tax law. They are covered expatriates.

    Expatriates who are fully tax-compliant and of modest means (from the IRC’s point of view) are not covered expatriates. The IRC does not give these people a name, but for clarity’s sake they are informally referred to as “noncovered expatriates”.

    The first way to become a covered expatriate is to have net worth of $2,000,000 or more on the date of expatriation. The amount is not indexed for inflation. This is called the net worth test.

    The second way to become a covered expatriate is to have a high enough average net income tax liability for the five tax years before the year of expatriation. The threshold amount for expatriations in 2019 is $168,000, and it is indexed for inflation. This is the net tax liability test.

    The final way to become a covered expatriate is to be noncompliant with tax obligations for the five tax years before the expatriation year. Full compliance with Title 26 (the entire IRC) is required. You must certify full compliance under penalty of perjury, and—if audited—prove it. This is the certification test.

    There are two categories of expatriates for whom the net worth test and the net tax liability test will not apply:

    • Dual citizens of acquired U.S. citizenship and another citizenship at birth; and
    • People who expatriate before age 18 1/2.

    For those who qualify for one of the exceptions, personal wealth and prior years’ income tax liability will not cause the individuals to be covered expatriates. However, the taxpayers will still be required to satisfy the certification test, and failure to do so will make them covered expatriates.

    DISCLAIMER 
    This communication is not intended to be tax advice and should not be treated as such. Readers should contact your tax professional to discuss your specific situation. 

    Oscar Eduardo Mary is a founding member of RCBM, an international tax and business consulting firm headquartered in Buenos Aires, Argentina and with a branch office in Carrollton, Texas. RCBM assists companies that want to operate in Argentina and / or United States. You may contact him at o.mary@rcbmgroup.com 



  • 10 Oct 2019 11:47 AM | Lucas Lombardi (Administrator)

    Nobel prize in chemistry for work on lithium-ion batteries

    The man behind one of the most important inventions in modern technology won a Nobel Prize on Wednesday. And he just happens to be a Texan.

    John Goodenough, a professor at the University of Texas Cockrell School of Engineering in Austin, was awarded the Nobel Prize in chemistry for his work in developing lithium-ion batteries. At 97, Goodenough is the oldest Nobel laureate in the history of the award.

    The German-born engineering professor, who has taught at UT since 1986, was awarded the Nobel Prize along with British chemist M. Stanley Whittingham of Binghamton University in New York and Akira Yoshino of Meijo University in Japan.

    "Live to 97 (years old) and you can do anything," Goodenough said Wednesday in a statement. "I'm honored and humbled to win the Nobel Prize. I thank all my friends for the support and assistance throughout my life."

    Goodenough identified and developed the critical materials that provided the high-energy density needed to power portable electronics, initiating the wireless revolution, the University of Texas said in a statement. Today, Goodenough's work is put to use worldwide for mobile phones, power tools, laptops, tablets and other wireless devices.

    "Billions of people around the world benefit every day from John's innovations," said UT President Gregory L. Fenves. "In addition to being a world-class inventor, he's an outstanding teacher, mentor and researcher. We are grateful for John's three decades of contributions to UT Austin's mission."

    Goodenough began his career at the Massachusetts Institute of Technology in 1952, where he laid the groundwork for the development of random-access memory, or RAM, used in the digital computer. After leaving MIT, he worked as a professor and head of the Inorganic Chemistry Laboratory at the University of Oxford. It was there that he made his lithium-ion discovery. He retired from Oxford in 1986 to join UT as the Virginia H. Cockrell Centennial Chair of Engineering in the Cockrell School. He holds faculty positions in the Walker Department of Mechanical Engineering and the Department of Electrical Computer Engineering.

    Goodenough, who heard the news while traveling in Europe, spoke to reporters by phone from London, where he was receiving the Copley Medal from the Royal Society. Goodenough said he was "extremely happy" his work has been able to help communications throughout the world. When asked how he thinks the news will go over with his students and faculty at UT, Goodenough replied, "I hope they still keep me employed."

    Goodenough joins physicist Steven Weinberg as one of two current Nobel laureates at UT. Weinberg won the prize in 1979 for contributions to the theory of unified weak and electromagnetic interaction between elementary particles. Two other UT professors, both deceased, also won Nobel Prizes: Hermann J. Muller in 1946 and Ilya Prigogine in 1977.

    Goodenough will receive a medal, cash prize and diploma at a ceremony in Stockholm in December. He and his fellow laureates in chemistry will split the cash award of 9 million Swedish krona, or about $900,000, with Goodenough donating his portion to UT.

    The Nobel Prize is the last accolade for the chemist, who has received numerous national and international honors over his lifetime. Still, when asked what he is most proud of, Goodenough said, "all my friends."

    By Lara Korte

    Source: Austin American-Statesman

  • 1 Oct 2019 2:13 PM | Lucas Lombardi (Administrator)



    A large part of the urban population lives in properties built and organized under a "Community" structure, usually called Homeowners' Association, or HOA, or Community Association.

    An HOA has three basic characteristics:

    • Mandatory membership of its members. That is, who buys a property in an HOA does not have the option to buy without belonging to the HOA.
    • Documentation (mandatory) that links each owner to the Association.
    • Mandatory monetary contributions from each owner to the Association. These contributions are governed by "lien" laws, which means that if the owner does not pay his obligatory contributions, the HOA has the right to sell and liquidate the owner's unit (under certain conditions) for paying off the debt.

    Community associations have a governmental component. Like a city or county government, an HOA has a charter—called the declaration. The declaration encompasses bylaws, covenants and other documents that give community associations their legal foundation.

    These governing documents obligate the association to preserve and protect the assets of the community. To enable the board to meet this obligation, association governing documents also empower the board to make rules and define the process for adopting and enforcing them—within limits. Governing documents also establish parameters for the nature and type of rules the board can make.

    State law gives associations the authority to make rules. These are called common interest community statutes, and they apply to condominiums, cooperatives, and property owners’ associations.

    It is important to notice, however, that the board can’t make or enforce any rule that is contrary to the governing documents, local ordinances, state law or federal regulations. Remember also that the board make rules on your behalf—to protect your investment, your home.

    Members of an HOA have rights and certain responsibilities, which are described in documents based on federal, state, municipal, and local laws. Also, and particularly, in the bylaws, covenants, conditions and restrictions.

    Among other rights, members of an Association of Homeowners may:

    • Attend and participate in all owner meetings
    • Participate in the HOA decision-making process
    • Vote in person or by proxy
    • Access to HOA records, financial statements and governing documents
    • Use and enjoy common areas (this privilege may be suspended for lack of payment of HOA assessments or for violations to the HOA restrictions)
    • Sell or rent your unit or other individually owned property

    Some of the responsibilities of owners in an Association are:

    • Pay mandatory monetary contributions, in the correct amount and term. These contributions are used by the HOA to pay common expenses (set of expenses originated because of the HOA normal operation).
    • Maintain the property according to the HOA’s statutes and architectural standards (some regulations are stricter with paint colors, garden decorations, landscaping, etc.).
    • Respect neighbors and allow "quiet enjoyment" of property and facilities. Noisy parties, smoking smog, outdoor lighting can cause disturbances to your neighbors' privacy.

    The HOA Board of Directors includes positions of President, Vice-president, Secretary and Treasurer. In general, the Board also includes a Committee of Architectural Affairs or other specific activities. Except in very particular cases, the Directors occupy their positions ad-honorem (voluntarily, without monetary compensation).

    Since decisions taken by the Board of Directors must obligatorily respect federal, state, municipal, local and co-ownership and administrative regulations, the Board frequently decides to delegate some of its responsibilities to a private company whose professionals have specific knowledge on the management of Associations in a legal and efficient manner, called Community Management, or HOA Management.

    The Board governs the Association. The Management Company reports to the Board, coordinates the overall operation and provides specific knowledge. The Board of Directors must periodically evaluate the performance of the Management Company with the purpose of anticipating and avoiding inconveniences.

    Warning signs

    Some warning signs, indicative of the need to improve inefficiencies, level of knowledge, etc. by the Management Company in the management of the HOA are:

    1. Constant decrease in the amount of cash available. More and more owners are in arrears in paying their mandatory contributions and cannot be attributed to a poor economy.

    2. Increase in the amount of delayed contributions by the owners.

    3. Increase in the amount of arrears to suppliers by the Association

    4. Lack of reconciliation of statements of account (should be monthly reconciliations)

    5. Significant and unexplained differences between current values vs. budgeted

    6. The list of tasks of the Management Company grows after each Meeting of Directors or Assembly

    7. An increasing number of owners are presented at Directors' meetings

    8. The Board receives a greater number of complaints from the owners

    9. It takes longer to resolve maintenance requests

    10. The productivity of the HOA decreases and its employees take a defensive attitude when asked about it.

    11. Board members begin to resign for "personal reasons"

    In summary, HOA’s have a governmental component. Like a city or county government, each HOA has a letter called declaration, which includes bylaws, covenants and other documents that give HOA their legal foundation.


    By Alejandro Haiek CPM®, CMCA® - CEO at HEXAGON CRE

     

    Note: Some of the language used in this article was extracted from material provided by CAI® The Community Association Institute.

     

       The author of this article, Alejandro Haiek, is founder and Chief Executive Officer  the company HEXAGON Commercial Real Estate, in the state of Texas and the state  of California, providing professional services of Commercial Property Management and Homeowners Associations since 2004.



  • 30 Sep 2019 4:19 PM | Lucas Lombardi (Administrator)

    Culture as a Business Driver


    Just as every country has its own culture, every company has its own culture. In the case of multinational companies, both national and corporate culture can impact everything from business strategy to workplace relationships. And the best way to learn how to make the transition from one cultural setting to another is simple, according to Ariel Bosio: you must experience it.

    A founder and former president of ATCC, Bosio has worked for 11 years for Occidental Petroleum in the US. He first joined Oxy in 2006 in his native Argentina, after working for seven years for Repsol-YPF. Despite Repsol and Oxy both being multinationals he has learned that there is a big difference between working for such companies at the local level and in their home countries.

    Each company has its own culture” he says, “but that culture is deeply influenced by local conditions” and an understanding of the differences that can be found around the world is essential if one wants to succeed in companies that move their people around a lot.

    The business environment drives business goals,” he remarks. “For example, Argentina’s volatile economy and politics challenge companies to manage short term and liquidity while reducing focus on long-term growth. The US’s highly competitive, stable economy challenges companies to focus on growth”.

    Country culture drives relationships and business practices”, he adds. “Understanding the country’s culture is key to knowing how people understand business, do business and collaborate. In Argentina, people might have deep relationships with co-workers, customers and suppliers. In the US, people are warm and polite at work, but everybody understands that it’s just business.”

    The difference is not surprising given that in Argentina business relationships are often rooted in long-standing social relations, whereas in the US people tend to move between jobs and geographic locations far more frequently. “A country’s politic and economic history also give you hints on what to expect in business with regard to the role of the government, and relations among companies, unions and other social groups.

    Building a company culture requires driving local results and achieving global results, which are the link across local operations”, he states. “In the case of Oxy and Repsol, they had very innovative and extensive programs to achieve a seamless people integration around the world. One critical piece in those programs is cultural immersion

    Job scope and location, without exposure to international business or work, might limit your capabilities to drive results by effectively managing other cultures, having a beyond-the-boundaries vision and incorporating best practices,” he emphasizes. People based in Argentina or the US working in the local market might have issues dealing with international business. “It might be hard for them to get more than a partial vision of how business is done in the rest of the world and really internationalize themselves,” he states.

    His international business travels in Repsol-YPF and the transfer to the US, home to Oxy’s headquarters, gave him insight into how companies view their business on a global basis. He was particularly impressed by what he calls “the orientation to the bottom line” in USA.

    In order to get the best out of an international career experience, it is critical to prepare yourself”, he points out. No matter which way one makes that first big cultural transition – be it from a country like Argentina to the US or vise versa – success depends on the same factors, beginning with learning the local language. Understanding the difference in business drivers and conditions is obviously important, but almost as important as learning about the local culture and “good manners” for doing business in that culture. “People appreciate it if you show you know about the history, current events and other aspects of their country and culture. Always, it is good to have in mind that, at the end of the day, you are a kind of ambassador of your country.” he says.

    Finally, no matter how open-minded one is when making a cultural transition, there will be frustrations and misunderstandings. The key, Bosio says, is to not let yourself be overcome by those complications and try to learn from them given that they are part of the process of becoming fully integrated and immersed.

    By Dan Krishock


  • 23 Sep 2019 1:17 PM | Lucas Lombardi (Administrator)

    The Expatriation Tax (Part One)


    Are you a green card holder planning to go back to your home country? Are you a U.S. citizen planning to retire in a foreign country? These actions trigger a tax problem: the expatriation tax (a.k.a. the exit tax).

    The exit tax rules impose an income tax on someone who has made his or her exit from the U.S. tax system. The defining feature is that assets are treated as if they are sold on the day before citizenship or resident status is terminated.

    Net capital gain (after an exemption) from the deemed sale is taxed immediately. There are other rules that accelerate income for a person leaving the United States. These rules apply to things like IRAs, pensions, deferred compensation plans, and beneficial interests in trusts.

    The United States is not alone in having an exit tax, but it is unique in tying its exit tax to a change in visa or citizenship status. This is called “citizenship-based taxation.” If you are a U.S. citizen or resident alien, you are taxed on worldwide income. Every other country (except Eritrea and a few other limited case exceptions) follows a residence-based taxation system. If you are a resident (however defined) of that country, you are taxed. If you are a nonresident (however defined), you are not taxed. This is why it is easy for Canada, which has residence-based taxation, to allow its citizens to live abroad and be taxed as nonresidents, while it is impossible for the United States, which has citizenship-based taxation, to do so.

    The citizenship-based tax principles in the DNA of the IRC are the reason that giving up citizenship or residence is a tax recognition event—and the reason that the exit tax rules exist.

    The exit tax applies to two categories of people:

    • U.S. citizens who terminate their citizenship
    • long-term residents—lawful permanent residents of the United States (holders of a “green card” visa)—who terminate that status after holding it for many years

    If you do not fall into one of those two categories, you do not need to worry further about the exit tax rules. Thus, for instance, someone living for decades in the United States under other visas (student, H-1B, L-1A, etc.) will never have a concern about paying exit tax.

    Citizens of the United States trigger the exit tax rules when they voluntarily or involuntarily terminate that status. By giving up citizenship, they become expatriates under the IRC. It is usually simple to determine your U.S. citizenship. If you are born in the United States, you are a U.S. citizen. It is sometimes a bit complex to determine whether someone born outside the United States (with U.S. citizen parents) is a citizen or not. A naturalized citizen will have a vivid memory—and some paperwork—to prove acquisition of U.S. citizenship. People will almost always know whether they are citizens of the United States or not.

    Dual citizenship does not matter. Acquiring citizenship of a second country will not terminate U.S. citizenship, unless you successfully persuade the State Department that your acquisition of citizenship in another country is a relinquishment of your U.S. citizenship.

    People who are not citizens of the United States can also be subjected to the exit tax. They must be long-term residents of the United States.

    • Resident status means that they are lawful permanent residents of the United States: green card holders.
    • Long-term means that they have held lawful permanent resident status—even for a split-second of time—in at least eight out of the last 15 years. In making this “eight out of 15” calculation, there are special rules for disregarding years in which these people lived abroad and filed U.S. income tax returns claiming nonresident status under the terms of an applicable income tax treaty.

    DISCLAIMER
    This communication is not intended to be tax advice and should not be treated as such. Readers should contact your tax professional to discuss your specific situation.

    Oscar Eduardo Mary is a founding member of RCBM, an international tax and business consulting firm headquartered in Buenos Aires, Argentina and with a branch office in Carrollton, Texas. RCBM assists companies that want to operate in Argentina and / or United States. You may contact him at o.mary@rcbmgroup.com


  • 20 Aug 2019 4:22 PM | Lucas Lombardi (Administrator)
    We invite you all to be part of the 2019 ATCC webinars educational series!
    This is a unique opportunity to get great visibility by providing powerful and meaningful information to our +13,000  member community.

    Examples:
    • US or Argentina Macro View
    • How to do business in the US, Texas and/or Argentina        
    • Industry or Business Sector Insights (Oil and Gas, Renewable Energy, Technology, Logistics, etc.)
    • Entrepreneurial Case Studies or Success Stories
    • Tax, Legal, Immigration, Translation, Accounting information/guidance.
    • Interviews with key leaders 
    • Instructions or How-Tos
    Conditions:
    • Aligned with ATCC mission
    • English or Spanish
    • 20 min presentation + 5 min Questions and Answers section
    • Must have a Powerpoint presentation (it may be sent to the audience after the presentation if presenter authorizes). You will have to use the ATCC PowerPoint Master
    • No selling any products or services
    • Author Full Name, Company, and Logo (and link) 
    • 6 alternative tentative presentation dates between August and December 2019
    The ATCC provides the webinar tool (WebEx)
    The webinar will be live and can hold up to 200 attendees. We will record the webinar, put it on our web and promote it through our emailing and socials networks.

    The ATCC Marketing committee will select the webinars and coordinate details with the author. 
    If you want to be a speaker in our webinar series write us to marketing@argentinatexas.org

    Thanks in advance for your participation,

    ATCC - Marketing Commission


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ABOUT

The Argentina Texas Chamber of Commerce is the primary advocate of Argentina and Texas business communities and is dedicated to building economic prosperity for both Countries. The Chamber of Commerce is a Member-driven organization.

CONTACTS

5100 Westheimer Rd, Ste 200

Houston, TX 77056

United States

Phone:  +1 (713) 969-5036

Fax: +1 (713) 966-6125

info@argentinatexas.org

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