General Resolution No. 4697/2020 (the “Resolution”) of the Argentinian Tax Authorities was published on the Official Gazette on 16 April 2020. The Resolution substitutes the annual information regime of shareholdings, registration of transfers of shares, titles and other participations and creates the Registry of Foreign Passive Entities.
ANNUAL INFORMATION REGIME
SUBJECTS BOUND TO REPORT
- Subjects included in subsections a) and b) of section 53 of the Resolution, except for the sole shareholder limited companies, cooperatives and trusts and investment funds not included in point 7 of subclause a) of section 73 of the Income Tax Law and investment funds included in the first paragraph of section 1 of Law No. 24.083, except those mentioned in Annex I of the Resolution, who must act as information agents with respect to:
- Individuals and estates domiciled or located in Argentina and abroad which up to 31 December of each year hold or have some kind of participation in the share capital of the company or its equivalent.
- Companies, enterprises, permanent establishments, affected patrimony or exploitations domiciled or, where applicable, located abroad which, up to 31 December of each year hold or have some kind of participation as described above.
- Subjects different from the ones mentioned in a) and b), for its holdings in share capital of the companies or its equivalent up to 31 December of each year.
- Companies controlled, controlling and/or linked according to General Companies Law No. 19,550.
- With regards to subjects mentioned in b), c) and d) above, the final beneficiary shall be identified, being the individual who holds the shares or voting rights of a company, or any other contractual entity or structure -regardless of its percentage- or that, by any other means, has the direct or indirect control of such entity.
- Directors, managing directors, administrators, receiver and members of the supervisory body or representatives whose mandate or representation was in force during the year being disclosed, whether that representation is still valid when complying with this regime.
Those authorized by using Form F 3283 and those with a general power of attorney included in section 4 of General Resolution 2570 shall not be included in the report.
- Net worth up to 31 December of the year on which the information is being submitted and closure of the fiscal year ended up to the mentioned date.
- In the event the investment fund is included in section 205 or section 206 of Law No. 27,440.
- Individuals domiciled in the country and, where applicable, estates located in Argentina with respect to:
- Their shares in companies or its equivalent in entities incorporated, domiciled or located abroad, including sole proprietorship companies.
- Their performance in managerial positions and/or executive as authorized by any company, structure, entity with or without legal personality, incorporated, domiciled or located abroad.
- Subjects bound to inform owning more than 50% of the shareholdings in companies or any other foreign entities -except for trusts and foundations-, directors, managers, authorized persons, members of the supervisory body or anyone occupying any similar role in such companies or foreign entities, who obtain a passive income higher than 50% of their gross income during the calendar year.
The holding requirement shall be accomplished when such holding of the obliged subject itself or jointly with (a) entities on which he has certain control or connection, (b) spouse, (c) cohabitant or (d) any other taxpayers connected by family relationship in ascendant, descendant or collateral line, by blood or affinity kinship until third grade being it equal or superior to 50% in the patrimony, the results or voting rights of the non-resident company.
At the same time, this requirement will be considered as fulfilled, whichever is the shareholding percentage, when the subjects residing in Argentina, with respect to the foreign entities, fall under some of the following requirements:
- -Have the right to dispose of the assets of the entity, under any entitlement
- Have the right to choose the majority of the directors and/or administrators and/or are members of the board or members of the supervisory body and their votes are the ones which determine the final decisions
- Are entitled to remove the majority of the members of the board or administrators
- Have a current right on the company’s income.
INFORMATION TO BE PROVIDED
The information that shall be reported by the subjects included in (i) must include data until 31 December of the corresponding calendar year and must include the information detailed in Annex II of the Resolution.
With regards of the information about the final beneficiary, where he does not have a direct holding on the company, voting rights or control of the subjects bound to inform, he shall keep the documents that prove the structures until the final beneficiary, identifying the holding intermediary shares between these subjects.
The information to be provided with regards to the subjects referred to in (ii) shall include data until 31 December of the relevant calendar year and will include the information detailed in Annex III of the Resolution.
The information to be submitted by the subjects mentioned in (iii) shall include the data detailed in Annex IV of the Resolution with respect to the income coming from abroad and the entity from which such income comes from.
SUBMISSIONS OF THE INFORMATION
The information shall be submitted by using the service named “Information Regime of Shareholdings and Passive Income” available at the Argentine Tax Authorities’ website.
The submission shall be performed until the date of the next year corresponding to the information, established according to the last number of the tax ID of each subject.
ENTRY INTO FORCE OF THE RESOLUTION
The dispositions of the Resolution entered into force on 15 April 2020 and the Annual Information Regime established there shall be applicable according to the following:
- a) Subjects mentioned in (i) and (ii): information corresponding to 31 December 2019 and subsequent.
- b) Subjects mentioned in (iii): with respect to passive income obtained in 2016 and subsequent years.
The submission of the information corresponding to 2019 and, where applicable, 2016, 2017 and 2018 shall be performed until the date already established according to the termination of the tax ID of each subject.
Complying with the provisions of the Resolution will be required for the process of requirements made by the taxpayers, as from its entry into force, with regards to the incorporation and/or permanence in the different registries implemented by the Tax Authorities, obtaining tax credit certificates and/or evidences of tax or social security situation, among others.
Breaches of the provisions of the Resolution shall be penalized according to Law No. 11,683.