Posts Tagged ‘finance’

Not a problem. Doing my own taxes and looking for information on filing an extension from abroad, I learned that US citizens living abroad get an automatic 2-month extension on their tax return due date, making the official deadline June 15. One simply need attach a statement to their tax return explaining why they qualify. Check out this link for more details.

U.S. Citizens and Resident Aliens Abroad – Automatic 2 Month Extension of Time to File

You may be allowed an automatic 2-month extension of time to file your return and pay any federal income tax that is due. You will be allowed the extension if you are a U.S. citizen or resident alien and on the regular due date of your return:

  • You are living outside of the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or
  • You are in military or naval service on duty outside the United States and Puerto Rico

If you use a calendar year, the regular due date of your return is April 15, and the automatic extended due date would be June 15. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.

Even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return.

This is a bit of a bonus (though the lesser of two evils is still evil) since the IRS also announced that it is closing all of its overseas offices, and expats will no longer have access to local assistance with their tax questions.

Not content with shooting one foot off with the removal of their banking secrecy, Uruguay’s parliament recently ratified (August 26) an absurd new law that bans all cash transactions over US$5000. In addition, special information will need to be filed if said money originates outside the country.

It’s funny, really, because Uruguay’s main movements in real estate for the past decade have been made by flight capital from Argentina and other countries. A couple of years back, they removed banking secrecy as it pertained to sharing information with Argentina, wherein real estate transactions and large bank deposits had to be reported to the AFIP. That wasn’t good enough, because then the deposits just started to become smaller (duh), so in order to curb this awful activity of foreigners paying Uruguayans for their land and construction labor, something must be done, a nuclear option which will screw even the locals!

Movement of any kind will not be tolerated.

Considering that many Uruguayans probably don’t have a bank account at all, let alone a debit card, and 2/3 of them live in rural areas without banks, it will be interesting to see how this pans out. I am guessing that most stuff will just go black-market, and the areas outside of Montevideo will just separate themselves more and more from the stupidity of the little Tupamaro empire.

According to this announcement, the Ministry of Economy and Finance and the Association of Uruguayan Supermarkets are putting a freeze on prices for over 200 supermarket products, in more than 300 stores, “in order to fight inflation.” Not only will the prices be frozen but they will be discounted 10%.

Our old friend Lorenzo, who scared off just about all the big fish from investing in Uruguay with his proposal and subsequent law to tax foreign holdings of UY residents, now thinks he can fix the problem with price controls. Well, it’s not just his idea; it’s the Association of Uruguayan Supermarkets too. They are “volunteering” to the price freeze. Why, who knows. Probably a political stunt. If they can afford to freeze prices *and* discount them, maybe they’ve been doing a bit of scalping. I’ve suspected this for a while.

Let’s see… every single time, ever, in all of recorded history, whenever price controls are enacted, that creates shortages of those goods and hoarding by those who have them. Why sell when the government forces you to do it at a loss? Those products then suddenly find themselves missing and/or not produced in the first place.

I have a prediction, based on this evidence from all of recorded history: those 200+ items will simply vanish from supermarket shelves and not be replaced. Meanwhile whoever actually produces them will either fill warehouses with unsold merchandise, or just stop production.

I also have a better suggestion to fight inflation: stop inflating the currency supply. All it takes is to do nothing, which Uruguayans are experts at. Doing nothing requires no employees, no printing press, no ledger entries.

I have been wondering for a long time how Uruguayans can afford to feed themselves as these crazy inflated prices. Now we see firsthand. And I don’t think it’s lack of material– there have been absurd prices on things that are sourced and made in-country. My opinion as to the price absurdity: Uruguayan greed. Really there’s no need to charge US$5 for 100 grams of cheese when it’s made in your backyard. Or $5 for a bag of potato chips which contains maybe 5 potatoes which cost a whopping 10 cents apiece from field to fryer?

Thanks to GermanBob for the link.