Argentina has published General Resolution 4838 of 19 October 2020, which provides for the introduction of a mandatory tax planning disclosure regime (Régimen de Información de Planificaciones Fiscale - IPF Regime). Under the regime, taxpayers are required to disclose their use of certain tax planning strategies. The main objective of the disclosure is to increase the level of knowledge regarding the operations and structures that companies use and assess the tax risks associated with the tax planning strategies implemented by taxpayers.
Covered Tax Planning
The IPF Regime covers national tax planning, international tax planning, and other tax planning of a similar nature. National tax planning 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 taxpayer that is carried out in Argentina in relation to any national tax and/or information regime. Specific types of national tax planning for this purpose will be provided in the IPF microsite on the tax authority website (http://www.afip.gob.ar).
Similarly, international tax planning 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 taxpayer that involves Argentina and one or more foreign jurisdictions. In particular, this includes the following situations:
- Companies are used to take advantage of agreements to avoid double taxation, strategies are adopted to avoid permanent establishment status, a result of international double non-taxation occurs, or it is intended to avoid the presentation of information under any information regime;
- Non-cooperative jurisdictions or low or no taxation are involved;
- Existing asymmetries in the tax laws of two or more jurisdictions are taken advantage of with regard to the treatment and/or qualification of an entity or contract or a financial instrument, which has the effect of a tax advantage or any other type of benefit;
- A natural person, undivided succession, partnership, trust, foundation, or any other foreign entity or legal instrument has dual tax residence;
- Any subject has rights inherent to the nature of a beneficiary, settlor, trustee (or similar) of a trust (or similar) of any type constituted abroad, or in foundations of private interest abroad, or in any other type of estate of similar affectation located, settled, domiciled, and/or constituted abroad;
- The planning is specifically referenced in the IPF microsite.
Tax Advantage or Benefit
For the purpose of the regime, a tax advantage or any other type of benefit is considered to be any decrease in the taxation of a taxpayer and/or related parties. Non-declaration by taxpayers under an information regime is also considered a tax advantage.
Obligation to Report
The obligation to report applies for taxpayers that participate in tax planning covered by the regime, as well as tax advisers that are involved in the implementation of tax planning, either directly or through third parties. Further, tax advisers are responsible for complying with the regime when other associated/connected tax advisers are involved in the implementation of tax planning covered by the regime, regardless of the jurisdiction where such other advisers are based, incorporated, or domiciled.
The obligations apply for all obligated subjects and compliance by one does not release the others from the obligation to report. However, a tax adviser may rely on professional secrecy, in which case they must notify the taxpayer.
The deadlines for reporting depend on the nature of the tax planning:
- National tax planning must be reported by the last day of the month following the close of the fiscal period in which the tax planning was implemented; and
- International tax planning must be reported within 10 days of implementation.
For this purpose, it is considered that the implementation of tax planning begins from the moment management begins to start the tax planning.
Prior tax planning must also be reported, including tax planning that has been implemented between 1 January 2019 and the date the General Resolution was published (20 October 2020). Information on such tax planning must be reported by 29 January 2021.
Reporting must be completed in accordance with the requirements established in the IPF microsite, with submissions made either through the IPF Regime service or through a "WebService" exchange. Once submitted, an acknowledgment of receipt will be issued by the system.
Information reported on tax planning must include exhaustive information in clear and precise language that fully describes the tax planning in question and the way in which a tax advantage or any other type of benefit results in favor of any of the parties included in said planning or a third party. The reporting duty is fulfilled when a complete description is provided of the relevant events, the details regarding the parties involved, and each relevant element or transaction of the tax planning. Further, a detailed analysis of the applicable legal and regulatory provisions, including foreign regulations, must be provided.
Failing to comply with the regime will impact a taxpayer's ability to make certain requests with the tax authority, including requests for tax credit certificates and certificates of tax and social security status. Further, non-compliance will result in an increased tax audit risk.
Failing to comply will also result in sanctions as provided for in Law No. 11,683 and will be considered an aggravating factor in determining sanction amounts. General Resolution 4838 does not specify which sanctions under Law No. 11,683 will apply, although it is assumed to include the sanctions for non-compliance with information regimes. This includes a standard fine of up to ARS 10,000 for non-compliant companies, as well as an additional fine of ARS 500 to ARS 45,000.