Following Action 12 of the BEPS Action Plan, the Argentine tax authorities (AFIP) issued Resolution 4838/2020 (the resolution), on and effective from October 20 2020, which creates an informative regime with respect to domestic and international tax planning strategies (the regime).
This regime requires to report “any agreement, scheme, plan and any other actions resulting in a tax advantage or any other kind of benefits” in favour of a taxpayer, with respect to any Argentine federal tax – not only income tax – and/or any informative regime in place in Argentina, both in a domestic and a cross-border scenario.
Examples of cross-border tax planning strategies subject to this informative regime, includes the following:
Using legal entity vehicles to get advantage of the benefits of a double tax treaty;
Adopting strategies to prevent creating a permanent establishment in Argentina;
When a strategy results in a case of international double non-taxation, or allows the allocation of taxable income to other jurisdictions, or results in the avoidance of a disclosure requirements through any Argentinian informative regime;
When the planning involves non cooperative jurisdictions, or jurisdictions that are considered of low or no-tax;
Taking advantage of tax asymmetries or involving hybrid instruments; and
Is a tax planning strategy specifically listed in the website of the tax authorities (not yet published).
The resolution considers that a tax advantage is any tax benefit or any other kind of benefit that decreases the taxable income of the Argentine taxpayer and/or its related parties, directly or indirectly. It would be also considered a tax advantage for purposes of this regime, any benefit, including the benefit of not disclosing through other informative regimes established by AFIP.
Please note that even when it is implied that this measure intends to follow the above mentioned BEPS Action 12, its reach seems wider since it does not specifically refer to “aggressive planning” which raises several questions regarding its scope.
They are liable to provide the related information under the regime:
Argentine taxpayers participating in a tax planning process, agreement, scheme, etc. as provided by the resolution;
Tax advisors (individuals and any entity which in the course of their business helps, assists, advises, or performs any activity related to the implementation of a tax planning) when they participate in such planning directly or through third parties. Tax advisors will also be required to fulfil this requirement when other related advisors directly or indirectly implement a tax planification, irrespective of the jurisdiction in which the related advisors are located.
In case of domestic tax planning, the due date for reporting is the last day of the month following the fiscal period in which the planning was implemented. For cross-border planning, reporting must be made within 10 days of its implementation.
The resolution provides a special deadline with respect to tax planning implemented from January 2019 or, when implemented prior to that date, when the planned structure is still in place. In those cases, the tax planning has to be reported by January 29 2021.
The information to be provided must include:
Detailed description of the tax planning and the way in which this planning results in any kind of benefits, including relevant facts, parties involved, any element of the transaction that is relevant for this purpose; as well as
A detailed analysis of the applicable law and regulations, including foreign applicable laws and regulations, as relevant.
The filing must be performed through the AFIP website.
Compliance with this reporting obligation does not imply the acceptance or denial of the planning from the Argentinian tax authorities. The information provided through the regime, can be shared as part of the exchange of information agreements in place with other jurisdictions.
Non-compliance with this reporting obligation may expose the taxpayer to fines of up to ARS 10,000 ($128). Further, failing to report will be considered as an aggravation to establish the tax compliance status of the taxpayer.
Although not surprising, since this is an approach that many tax authorities have taken so far, particularly from OECD jurisdictions, the rules clearly seem to broaden the scope to domestic planning and they do not seem to be limited to so called ‘aggressive’ planning.
Further clarification and developments regarding the type of situations or transactions covered must be closely monitored. Existing and new planning structuring involving Argentina must be evaluated to determine whether they are subject to the new requirements.
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