It is well known that in the last decades the different multinational companies have carried out different types of tax planning, in order to reduce their tax burden in a legal way, through the use of the gaps or shortcomings that many times the different tax systems may have.
The use of this tax planning often leads to a detriment of the tax base in the place where the operation is carried out and the transfer of profits to more tax favorable jurisdictions.
Therefore, it is a priority for the different States to know these, in order to verify that the taxpayer in the jurisdiction where the taxable event is actually perfected.
Therefore, on October 20, 2020, General Resolution 4838/2020 issued by the Federal Administration of Public Revenues (hereinafter, AFIP) was published, establishing a Tax Planning Information System in Argentina.
The purpose of this article is to briefly explain the main aspects of such regime.
Types of Tax Planning Included
The standard covers both national and international tax planning.
International Tax Planning
This type of planning comprises any scheme, plan and other activity with which an advantage or type of benefit is obtained in favor of taxpayers involved in it and which involves the Republic of Argentina and another jurisdiction abroad.
Such tax planning shall be deemed to exist when any of the following situations are incurred:
- Use of companies in order to take advantage of agreements to avoid double taxation, measures are adopted so as not to establish as a permanent establishment, double non-taxation is generated.
- Jurisdictions considered to be non-cooperative or with low or no taxation are involved in tax planning.
- There is an exploitation of asymmetries of the existing tax laws in two or more jurisdictions regarding the qualification of the subject or the operation, which generates some kind of tax benefit.
- There is a double tax residence by the person, undivided estate, corporation, trust, legal instrument or foreign entity.
- When a subject has rights according to his position as beneficiary, trustor, trustee of trusts (trusts or similar) constituted abroad.
- When they are contemplated in the microsite “Tax Planning Information System”.
National Fiscal Planning
As in international tax planning, it includes any agreement, scheme, plan or other action that is an advantage or type of tax benefit in favor of the taxpayers who are part of it. However, this planning only covers the Republic of Argentina, with respect to its national taxes.
In order to identify them, the AFIP has published the types of planning in the microsite “Tax Planning Information System”, within the web site of such Organization.
About the Tax Advantage or Type of Benefit
The tax advantage will be determined when there is a decrease in the tax base or taxable matter of the taxpayers and/or their related parties, either directly or indirectly. Likewise, it is also considered that a tax advantage will have been incurred when the declaration required by the established information regime is not complied with.
The subjects obliged to make the declaration required by this regime will be the following:
- Those taxpayers who are involved in tax planning covered by the regime.
- The tax advisors, whether human or legal persons, when they help, assist or advise on any activity for the implementation of a tax planning, even if they participate through third parties.
The tax advisor who is protected by professional secrecy must notify the taxpayer of this, through the AFIP’s web page under the option “Régimen IPF- Secreto Profesional” (IPF regime – professional secrecy).
Form of Presentation
In order to be able to present the information corresponding to the fiscal planning the obligated subject will be able to do of the following way:
- By entering the AFIP web page, in the “Régimen IPF” service, which can be accessed with the Fiscal Code.
- On the basis of the “Web Service” by means of an exchange of information.
In both cases an affidavit form will be issued to serve as proof of submission.
Deadline for Submission
The time frame for reporting will depend on the type of tax planning:
- National fiscal planning: Must be reported until the last day of the month following the end of the fiscal period.
- International fiscal planning: Should be reported 10 days after starting its implementation, which should be considered since the first management to perform it.
In the case of fiscal plans implemented from January 2019 to October 20, 2020 or those that would have been implemented before 2019, but whose effects last until the entry into force of this regime, they must be reported until January 29, 2021.
Sanctions for Noncompliance
The taxpayers and tax advisors who do not comply with this declaration may be subject to fines according to the Law of Fiscal Procedure.
They may also be excluded from AFIP’s records.