The Tax Planning Information Regime was implemented in Argentina on Oct. 20, 2020. Its main purpose is to allow tax authorities to easily access detailed information on national and international transactions considered by the legislation as tax planning is carried out to reduce or eliminate taxes in Argentina. The obligation to provide such information applies to tax advisers and taxpayers.
This article provides an overview of the regime, which was implemented by General Resolution No. 4838/2020 of the Argentine Federal Tax Administration, or FTA.
The resolution provides for the tax planning that is subject to the regime. Tax planning is any agreement, scheme, plan, or other action that results in a tax advantage or other type of benefit in favor of the taxpayers, which takes place in and/or involves Argentina and one or more jurisdictions regardless of whether it is national or international tax planning.
In addition, “tax advantage or any other type of benefit” means any direct or indirect decrease in the taxable matter of the taxpayers and/or their related parties.
National tax planning involves only legal entities and/or individuals residing in Argentina. Meanwhile, international tax planning subject to the regime includes any agreement, scheme, plan, and any other action that results in a tax advantage or in a benefit in favor of the taxpayers, which involves Argentina and one or more jurisdictions.
The resolution contemplates certain situations that are considered as international tax planning: when strategies are adopted to avoid the configuration of a permanent establishment; when they lead to double non-taxation; and/or they allow the taxation to be allocated to foreign jurisdiction, among other situations. The FTA website also includes international tax planning in section “Tax Planning Information Regime.”
Although the regime is based on the Action No. 12 of BEPS, it differs from the action because it is not limited to the potentially “aggressive” or “abusive” tax planning, but to any kind of tax planning that results in a tax advantage. Because the resolution contemplates such a broad definition of tax planning, the FTA is expected to include a comprehensive number of cases in the regime.
The mere existence of the situations provided for in the resolution or on the FTA website does not trigger, per se, the obligation to report under the regime. Based on a reasonable interpretation of the resolution, it is possible to conclude that the reporting obligation will apply only if the taxpayer obtains a tax advantage or any other type of benefit, because of the implementation of the transaction. If the reporting obligation applies, the information must be provided to the FTA in clear and precise language, describing in detail the tax planning and the way in which a tax advantage or benefit favors any of the parties.
The regime applies to taxpayers who participate in the tax planning and tax advisers who carry out any activity related to the implementation of such tax planning. The resolution defines tax advisers as individuals, legal entities, and other entities that—in the usual development of their business—help, assist, advice, give their opinion, or carry out any activity related to the implementation of a tax planning, provided they participate in such implementation directly or through third parties.
When tax advisers rely on professional confidentiality that prevents them from reporting the information related to tax planning, they must notify the taxpayers of such circumstance through the FTA website.
The taxpayers may relieve the tax advisers of professional confidentiality for the particular or permanent case through the same service. If the tax advisers are relieved, they must provide the information related to the taxpayer’s tax planning to the FTA.
The deadlines for reporting national and international tax planning are different. The national tax planning must be reported until the last day of the month following the closing of the fiscal period in which it was implemented. The international tax planning must be reported within 10 days of the start of its implementation, which generally is a much shorter period when compared to the national plannings.
Compliance with the regime is required for the progression of the incorporation requests and/or the maintenance of the regimes implemented by the FTA, as well as for the taxpayer to obtain tax credit certificates and/or tax situation and forecast certificates. Compliance will not result in the express or implicit acceptance or rejection of the tax planning by the FTA.
For noncompliance, the responsible party may risk being audited (higher SIPER category) and penalized under Tax Procedure Law No. 11,683. Data related to tax planning may be subject to reciprocal exchange of information agreements signed by Argentina.
Non-cooperative or With Low or No Taxation
The resolution also establishes that transactions with non-cooperative jurisdictions or jurisdictions with low or no taxation, or LNTJ, will be considered as international tax planning and hence will be subject to the regime. Non-cooperative jurisdictions do not have an information exchange agreement on tax matters with Argentina nor a double tax treaty to avoid international double taxation.
As a consequence of various provisions of the Argentine tax legislation in force, the list of LNTJ published by the FTA includes jurisdiction that apply income tax rates lower than 15%.
To sum up, the regime is a relevant tax matter in Argentina. The resolution has been challenged by tax advisers based on several legal grounds, such as violation of the principle of legality, the non-retroactivity of laws, normative hierarchy, right to privacy, professional confidentiality, illegal interference in the professional practice, reasonableness, and equality.
This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Martin Barreiro is a partner at Baker McKenzie. His practice focuses on general tax planning, international private banking, global tax planning, and transfer pricing, and he provides tax advice for mergers and acquisitions transactions.
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