This Tuesday, 20 October, 2020; the General Resolution No. 4838 (the “Resolution”) issued by the Argentine Tax Authorities (Administración Federal de Ingresos Públicos “AFIP”) was published in the Official Gazette. The Resolution provides that taxpayers must report all the structures, techniques, instruments and mechanisms they use to minimize their tax burden.
The purpose of the Resolution is to supervise the tax strategies of companies and individuals to increase the level of knowledge regarding the operations and structures used in order to avoid tax evasion maneuvers.
Tax Planning Information (TPI)
The tax planning included in the Resolution covers both national tax planning and international tax planning without prejudice to other tax planning of the same nature.
(i) National tax planning
It includes any agreement, scheme, plan and any other action that results in a tax advantage or any other type of benefit in favor of the taxpayers, developed in Argentina in relation to any national tax and / or information regime established.
(ii) International tax planning
It includes any agreement, scheme, plan and any other action that results in a tax advantage or any other type of benefit in favor of the taxpayers that involves Argentina and one or more foreign jurisdictions.
Especially it will be considered that there will be an international tax planning when any of these situations is verified:
- Use of companies to take advantage of agreements to avoid double taxation, adoption of strategies to avoid the existence of permanent establishment status, the location of one or more taxable bases in foreign treasuries is allowed or it is intended to avoid filing any information regime.
- Non-cooperative or low or no taxation jurisdictions are involved.
- Take advantage of asymmetries between tax laws of different jurisdictions with regard to the treatment and / or qualification of an entity or contract or of a financial instrument whose object is a tax advantage or other benefit.
- Human person, undivided succession, partnership, trust, foundation or any other foreign entity or legal instrument that has dual tax residence.
- Any person whose rights arising from a trust of any kind established abroad, or in private interest foundations abroad or in any type of equity of similar transfer located, settled, domiciled and / or constituted abroad.
- It is specifically contemplated in the microsite “Tax Planning Information Regime”.
Persons in charge of the TPI regime
(i)Taxpayers: when they participate in tax planning included in the Resolution..
(ii) Tax Advisors: the individuals, companies and other entities that, in the ordinary course of their activity, help, assist, advise, give their opinion or carry out any activity related to the implementation of tax planning, provided that they participate in said implementation directly or through third parties.
(i) National tax planning shall be reported until the last day of the month following the closing of the fiscal period in which the tax planning was implemented.
(ii) International tax planning shall be reported within ten days of its implementation in cases where it is especially considered that there is international tax planning.
It is considered that tax planning begins its implementation when the first management begins to start tax planning.
Tax plans that have been implemented from 01/01/2019 to the date of publication of the Resolution or implemented prior to the first date mentioned above but that remain until the entry into force of the Resolution, must be reported until 01/29/2021.
The information will be filed in accordance with the amounts, conditions and requirements established in the microsite “Tax Planning Information Regime” available on the AFIP website.
Compliance with the information obligation will be a requirement for the processing of requests made by the obliged subjects regarding the incorporation and / or permanence in the different registries implemented by AFIP, to obtain tax credit certificates and / or tax status or social security certificates , among other requests.
In the event of non-compliance, the obliged subjects may be subject to falling into a growing category of risk of being audited. In addition, it will give rise to the sanctions provided for in Law 11,683, considering such non-compliance as an aggravating factor.