The competent authority agreement went into effect on 27 January 2021, which means Argentine entities will not have to file country-by-country (CbC) reports if their ultimate parent entities (UPEs) in the United States filed the reports.
With no guidance on the retroactive enforcement of the competent authority agreement that went into effect on 27 January 2021, Argentine entities with controlling UPEs in the United States that have not filed the local CbC report due before 27 January 2021, should review their circumstances and determine whether they need to do any additional CbC report-related filing in Argentina.
Background
On 27 January 2021, the United States Internal Revenue Service (IRS) and Argentine tax authorities (AFIP) signed a competent authority agreement on Base Erosion and Profit Shifting (BEPS) Action 13 (see EY Global Tax Alert, Argentina and US agree to exchange country-by-country reports on large multinationals, dated 9 February 2021). The agreement went into effect on the date it was signed and is currently available for download at the IRS and AFIP’s website.
The agreement states that the competent authority of both countries intend to annually exchange the CbC reports required in Argentina by General Resolution (GR) 4,130/2017 with respect to fiscal years of multinational enterprise (MNE) groups commencing on or after 1 January 2018. The CbC reports are intended to be automatically exchanged no later than 15 months after the last day of the MNE group’s fiscal year to which the CbC report relates.
Argentine entities with controlling UPEs in the United States should not file CbC reports in Argentina for fiscal years starting on 1 January 2018, and onwards if the UPE submitted the report in the United States before the Argentine local filing deadline (i.e., the last business day of the 12th month after the UPE´s fiscal year end). Those Argentine entities will have to comply, however, with the rest of the GR 4,130/2017 requirements, such as the first and second CbC notifications.
Retroactive enforcement
The Argentine tax authorities have not published any regulations or other guidance on the retroactive enforcement of the competent authority agreement.
In addition, the agreement establishes that each competent authority must notify the other when there is reason to believe that (1) the taxpayer made an error that may have led to incorrect or incomplete information reporting or (2) the taxpayer did not comply with its obligations under domestic law to file the CbC report.
Implications
Argentine entities with controlling UPEs in the United States should review their circumstances to determine if they need to do any additional CbC report-related filing in Argentina for tax years ending before 27 January 2021.
For additional information with respect to this Alert, please contact the following:
Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires
- Carlos Casanovas
- Gustavo Scravaglieri
- Milton González Malla
- Esteban Kacanas
- Manuel Val Lema
- Mariano Rodríguez Morán
- María Florencia Panichella
- Ángeles Crespi
- Pablo Schuckman
- Marcelo Damián Gros
- Patricio Castells
Ernst & Young LLP (United States), Latin American Business Center, New York
- Pablo Wejcman
- Agustina Paula Paradiso
- Ana Mingramm
- Enrique Perez Grovas
Ernst & Young Abogados, Latin American Business Center, Madrid
- Jaime Vargas
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
- Lourdes Libreros
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
- Raul Moreno, Tokyo
- Luis Coronado, Singapore
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
