January 7, 2021
Argentina's tax authorities launch the "Régimen IPF" service to ensure compliance with mandatory disclosure regime
Taxpayers and tax advisors can now report certain international tax-planning arrangements through the tax authorities' recently launched website.
On December 21, 2020, the Argentine tax authorities (AFIP) launched the "Régimen IPF" service on their website to ensure compliance with the mandatory disclosure regime (MDR) for domestic and international arrangements (planificaciones fiscales, in Spanish), as established in General Resolution No. 4838/2020.
The following parties are considered reporting parties:
Both parties must comply with the regime and one party's compliance does not exempt the other party from the obligation.
Domestic and international tax-planning arrangements implemented from January 1, 2019, and those implemented before that date but effective as of October 20, 2020, should be reported.
The Bar of the City of Buenos Aires and various Professional Councils of Economic Sciences have challenged the legality of the MDR regime in court. Taxpayers should follow the progress of these challenges, as the MDR regime may be found partially or entirely invalid.
New web service
The "Régimen IPF" microsite is not yet available on the AFIP's website to date. Therefore, domestic tax-planning arrangements and international tax-planning arrangements that must be reported under Section 4(f) of General Resolution No. 4838/2020 cannot yet be reported. Currently, only the following types of international tax-planning arrangements (included in Section 4 of General Resolution No. 4838/2020) can be reported:
If an international tax-planning arrangement included in Section 4(a) is reported, taxpayers and tax advisors should specify which of the following apply:
When reporting an international arrangement in the AFIP's system, taxpayers and tax advisors (if they were involved in the implementation) should report each arrangement separately, indicating which of the following implementation periods the arrangement falls under:
They also should report the date the international tax- planning arrangement was entered and the date of implementation. The system does not allow the entry of dates before January 1, 2014.
Additionally, the taxpayers and tax advisors should include a clear and detailed description of the international tax-planning arrangement (ranging between 500 and 1500 words in Spanish) and a clear and detailed description of the tax advantages or benefits.
The taxpayer should report whether tax advisors were involved in the planning. If tax advisors were involved, the taxpayers should report the tax advisors' tax identification number and name/business name.
Tax advisors should report the taxpayer's taxpayer identification number, name/business name and tax residence status. They also should report whether they participated in the implementation of the arrangement directly or through third parties. If through third parties, the tax advisors should indicate whether the third party is a tax resident (in which case the taxpayer identification number and name should be indicated) or nonresident (in which case, the tax identification number, name/business name, country where it is based and domicile abroad should be detailed).
The system allows the tax advisor to invoke professional confidentiality to not be required to report its client's international tax-planning arrangement. The taxpayer, however, may waive professional confidentiality.
Regardless of the previously mentioned uncertainty on the legality of the MDR, General Resolution No. 4838/2020 had established that international tax-planning arrangements implemented from October 20, 2020, should be reported within 10 days of when the arrangement is implemented. Domestic tax-planning arrangements implemented from that date should be reported on or before the last day of the month following the end of the tax period in which they were implemented. In addition, international and domestic tax-planning arrangements implemented from January 1, 2019, through October 19, 2020, and those implemented before January 1, 2019 that remain effective as of October 20, 2020, should be reported no later than January 29, 2021.
Taxpayers should continue to monitor the progress of legal and administrative proceedings on the MDR regime. We will issue additional Tax Alerts as more information becomes available.