Argentina implements new mandatory disclosure regime for international transactions

• The new informative regime establishes certain international transactions to be reported by Argentine legal entities up to the due date for filing the annual Corporate Income Tax return.

Executive summary

On 27 December 2022, the Argentine Tax Authority (AFIP) published General Resolution No. 5306/2022 (the Resolution) in the Official Gazette. The Resolution establishes a new informative regime for certain international transactions (RICOI or “Régimen de Información Complementario de Operaciones Internacionales”, in Spanish) to be complied with by Argentine legal entities and replaces the suspended mandatory reporting regime for domestic and international arrangements enacted by General Resolution No. 4838/2020.

Detailed discussion

Background

On 20 October 2020, AFIP issued General Resolution No. 4838/2020 establishing a mandatory reporting regime for domestic and international arrangements (planificaciones fiscales, in Spanish) implemented since 1 January 2019 or implemented before that date if the effects of the arrangements subsist as of 20 October 2020. Under Resolution 4838, taxpayers that participated in any domestic or international tax planning arrangements or tax advisors that participated (directly or through related parties) in implementing tax planning arrangements had to comply with this mandatory reporting regime.

On 1 September 2022, AFIP suspended the mandatory reporting regime implemented by Resolution 4838 for 60 calendar days beginning 1 September 2022. This suspension was later extended for an additional 60 calendar days beginning on 31 October 2022 until the regime was finally abrogated by Resolution 5306.1

Reporting parties

The RICOI must be complied with by companies, non-profit entities, trusts, mutual funds, and permanent establishments incorporated or located in Argentina, for the following transactions:

• Transactions performed with legal entities, trusts, permanent establishments, or other parties domiciled, incorporated, or located abroad, if they are related parties.

• Transactions performed with parties domiciled, incorporated, or located in non-cooperating jurisdictions or low or no-tax jurisdictions, even when carried out through their permanent establishments abroad.

The Resolution states that entities categorized as Micro, Small or Medium sized companies -Stage I and II- on AFIP’s website “Sistema Registral” will be exempt from complying with the RICOI.

Reportable international transactions

The international transactions to be reported are those involving one or more of the following situations:

• Cases involving permanent establishments (e.g., local entities that habitually negotiate contracts in Argentina for their execution abroad, local entities acting exclusively or almost exclusively for foreign related parties, among others).
• A transaction that results in double international non-taxation.
• The transfer of benefits to other jurisdictions arising from mismatches in the treatment or qualification of an entity, agreement, or financial instrument under the laws of two or more jurisdictions.
• Any type of agreement, scheme or plan which excludes one or more parties from the obligation to report or be reported in the Common Reporting Standard (CRS) approved by the Organisation for Economic Co-operation and Development (OECD) or The Foreign Account Tax Compliance Act (FATCA) of the United States.
• Business restructurings that have the effect of falling outside the scope of the international Country-by-Country Reporting regime established by AFIP.
• Disposals by nonresidents of shares or equity interests of foreign legal entities that directly or indirectly own assets located in Argentina if thresholds are met.
• Concessions for the exploitation of any activity involving the transfer of capital.
• International leasing transactions treated as a financial loan.
• A payment by a nonprofit entity to a foreign entity.
• When a tax benefit is obtained as a consequence of one of the following:
  • Payments or transactions interconnected that return totally or partially to the entity who made them or to its partners, shareholders, or related parties.
  • An international transaction involving one or more entities that are not subject to income tax (or equivalent) in the jurisdiction of incorporation and their income is directly attributable to their shareholders or partners.
  • Mechanisms that generate uncertainty with respect to the ownership of assets for which taxpayers from different jurisdictions may deduct the tax depreciation of the same asset.
  • Deductible cross-border payments made to parties of the same multinational group that are not tax residents in any jurisdiction.

Characteristics of the information required and filing procedure

For each reportable transaction, the local entity must report the following information:

• Type of international transaction

• Identifying data of the parties involved in the international transaction

The information must be reported electronically on AFIP´s website, through the webservice “Complementary Information Regime for International Transactions” (Régimen de Información Complementaria de Operaciones Internacionales, in Spanish).

Entry into force and reporting due dates

The international transactions to be reported are those carried out during the fiscal years of the reporting entity that close on or after 1 August 2022.

The taxpayers must report such transactions up to the due date for filing the Income Tax return for the fiscal year to which they correspond.

Implications

Taxpayers that do not comply with this regime may be subject to fines as set out in the Tax Procedural Law.

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
• Ariel Becher
• Sergio Caveggia
• Pablo Baroffio
• Sabrina Maiorano
• Juan Ignacio Pernin

Ernst & Young LLP (United States), Latin American Business Center, New York

• Pablo Wejcman
• Agustina Paula Paradiso
• Ana Mingramm
• Lucas Moreno
• Enrique Perez Grovas

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.