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Tax Information Exchange Agreements Signed with Argentina
In 2000 Argentine income tax regulations implemented a black-list of countries which was made up of no-or-low tax jurisdictions. In line with this, Argentina adopted tax measures to discourage usage of no-or-low tax jurisdictions by Argentine residents. Taxand Argentina details the agreements that are being looked at currently.
The income tax regulatory decree, after listing the no-or-low tax jurisdictions, states that:
- those that enforce the tax information exchange agreement signed with Argentina will be excluded from the black-list
- those signing the agreement cannot allege banking, stock exchange or any other type of secrecy when confronted with a request for information from the corresponding tax authorities.
In the event the jurisdiction included in the black list enters into a tax information exchange agreement with Argentina, investors should:
- take into account the status of such jurisdiction for tax planning purposes to be considered excluded from the so-called black-list
- avoid the discouraging tax measures adopted by Argentina when contracting with no-or-low tax jurisdiction included in the so-called black list.
The international exchange of information is considered to be a method to give a solution to international tax evasion. Before 2009, Argentina had not signed tax information exchange agreements (TIEAs) with no-or-low tax jurisdictions or with banking secrecy rules. However, recently, and following the worldwide tendency, Argentina has signed TIEAs with Andorra, Costa Rica, Monaco, San Marino and the Bahamas (countries deemed to be tax heavens). According to the Argentine tax authorities, the execution of these TIEAs is part of a plan by the Argentine government to prevent money laundering, tax fraud and evasion.
These TIEAs were negotiated following the OECD model on tax information exchange agreements. In this way, Argentine TIEAs cover only exchange of information on request and not automatic or spontaneous exchange of information. The exchange of information under the TIEAs is limited to what is relevant to the administration and enforcement of the taxes covered by the agreement in the contracting states. TIEAs also provide for the performance of tax examinations in the territory of the other contracting party. Lastly, TIEAs are limited to income tax, value added tax, minimum presumed tax and personal assets tax.
It is important to point out that none of these TIEAs have entered into force. They will enter into force once each contracting state notifies the other of the completion of its domestic procedures for the entry into force of this type of agreement and, specifically, on the first day after receipt of the latter of these notifications.
The international trend towards signing tax information exchange agreements ("TIEAs") with no-or-low tax jurisdictions or with banking secrecy rules appears to be growing in Argentina. The execution of these TIEAs aims to create a more efficient set of rules to tackle tax fraud, tax evasion and tax avoidance. Additionally, in certain cases, the execution of theses TIEAs could allow the taxpayer to avoid the discouraging tax measures adopted by Argentina when contracting with no-or-low tax jurisdiction.
Your Taxand contacts for further queries are:
T. +54 11 4021 2300
Lucia Peralta Krogslund
T. +54 11 4021 2300