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Andrés Edelstein |
Ignacio Rodríguez |
In an effort to keep up with international trends in terms of tax transparency and to start aligning local regulations to the OECD's Base Erosion and Profit Shifting (BEPS) action plan, by the end of 2013 the Argentine authorities issued a set of resolutions that are aimed at monitoring intercompany transactions (both local and cross-border) and discouraging the use of allegedly tax abusive practices.
New information regime
The Argentine tax authority (AFIP) issued on December 19 2013 General Resolution 3572 (GR 3572), creating a new database in which local taxpayers must disclose their relationships with domestic and foreign related parties. For purposes of this rule, the definition of related party is broad and goes beyond economic or legal ownership.
Additionally, GR 3572 introduces a new information regime pursuant to which Argentine taxpayers are required to report, on a monthly basis, all their transactions with local related parties.
Issuance of white list
By mid-2013, the Argentine government issued Decree 589/2013, which eliminated the list of no- or low-tax jurisdictions from the income tax regulations (the so called black list) and empowered AFIP to establish a new white list of countries, territories, and tax regimes that are considered to be cooperative with respect to tax transparency. Cooperative countries are those that have signed either double tax treaties (DTTs) with broad exchange of information clauses or tax information exchange agreements (TIEAs) with Argentina, or that are in the process of negotiating a DTT or TIEA.
The white list was finally published in December 2013 as General Resolution AFIP 3576, and took effect January 1 2014. Notably, certain jurisdictions that were traditionally considered tax havens under previous law, such as the Cayman Islands, Bermuda, BVI and Jersey now are viewed as cooperative. The complete list is available on the AFIP website.
Surtax on triangulated exports
By means of General Resolution AFIP 3577, the Argentine authorities introduced a new surtax on income derived from export transactions where there is a mismatch between the jurisdiction where the products are shipped and the jurisdiction where the buyer is located.
The surtax rate is 0.5% on the export's FOB value and is increased to 2% when the buyer is located in a non-cooperative jurisdiction.
Tax treaty with Spain enters into force
The Argentina-Spain double tax treaty recently entered into force and will apply retroactively to January 1 2013. The treaty retains many terms of the previous treaty, but excludes relief from Argentina's 0.5% wealth tax.
This is important for multinational companies that have relied on the Spanish-Argentina treaty to facilitate more efficient holding company structures for their Latin American affiliates. The treaty can help mitigate Argentine withholding tax on certain distributions and payments.
Andrés Edelstein (andres.m.edelstein@ar.pwc.com) and Ignacio Rodríguez (ignacio.e.rodriguez@ar.pwc.com)
PwC
Tel: +54 11 4850 4651
Website: www.pwc.com/ar
