The competent authority agreement went into effect on January 27, 2021, which means Argentine entities will not have to file country-by-country reports if their ultimate parent entities in the United States filed the reports.

With no guidance on the retroactive enforcement of the competent authority agreement that went into effect on January 27, 2021, Argentine entities with controlling ultimate parent entities in the United States that have not filed the local country-by-country (CbC) report due before January 27, 2021, should review their circumstances and determine whether they need to do any additional CbC report-related filing in Argentina.

Background

On January 27, 2021, the United States Internal Revenue Service and Argentine tax authorities (AFIP) signed a competent authority agreement on Base Erosion and Profit Shifting (BEPS) Action 13 (see Tax Alert 2021-0288). The agreement went into effect on the date it was signed and is currently available for download at the IRS and AFIP's website.

The agreement states that the competent authority of both countries intends to annually exchange the CbC reports required in Argentina by General Resolution (GR) 4,130/2017 with respect to fiscal years of multinational enterprise (MNE) groups commencing on or after January 1, 2018. The CbC reports are intended to be automatically exchanged no later than 15 months after the last day of the MNE group's fiscal year to which the CbC report relates.

Argentine entities with controlling ultimate parent entities in the United States should not file CbC reports in Argentina for fiscal years starting on January 1, 2018, and onwards if the ultimate parent entity submitted the report in the United States before the Argentine local filing deadline (i.e., the last business day of the 12th month after the ultimate parent entity's fiscal year end). Those Argentine entities will have to comply, however, with the rest of the GR 4,130/2017 requirements, such as the first and second CbC notifications.

Retroactive enforcement

The Argentine tax authorities have not published any regulations or other guidance on the retroactive enforcement of the competent authority agreement.

In addition, the agreement establishes that each competent authority must notify the other when there is reason to believe that (1) the taxpayer made an error that may have led to incorrect or incomplete information reporting or (2) the taxpayer did not comply with its obligations under domestic law to file the CbC report.

Implications

Argentine entities with controlling ultimate parent entities in the United States should review their circumstances to determine if they need to do any additional CbC report-related filing in Argentina for tax years ending before January 27, 2021.

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