Automatic Exchange of Information in 2017

Encouraged by international bodies such as the Organization for Economic Cooperation and Development (OECD), and inspired by economic globalization, in recent years several countries around the world have shown an increasing interest in international fiscal transparency. For such purpose, efforts to improve the automatic exchange of information are being made.   

In 2010, the OECD amended by the Protocol “Convention on Mutual Administrative Assistance in Tax Matters” (developed in 1988). By means of this Convention, parties are encouraged to adopt different actions to collaborate in the exchange of fiscal information. 

The Convention was implemented focusing on international tax avoidance and evasion. It was firstly opened for OECD parties and European Union members to sign, and later on it was opened up for non-party countries.

The Convention parties committed to provide administrative cooperation to exchange information (which might be requested, spontaneously presented or automatically sent), carry out fiscal audits, assist each other in collecting taxes, etc. A series of measures to safeguard the confidentiality of the exchanged information and certain limits on the obligation to provide assistance are also set.

Following the international trend, Argentina signed:

1. Tax Treaties to avoid double taxation, which are bilateral and include exchange of information clauses;
2. Tax Information Exchange Agreement ( TIEAs), also bilateral;
3. The abovementioned “Convention on Mutual Administrative Assistance in Tax Matters” proposed by the OECD, multilateral and in which context our country assumed the commitment to implement the automatic exchange of information in relation with bank accounts as from September 2017.

On November 3, 2011, Argentina subscribed to the “Convention on Mutual Administrative Assistance in Tax Matters”, which was ratified on August 31, 2012 by the Executive Branch of Argentina’s government.

The ratification involved the acceptance of the Agreement on Exchange of Information on Tax Matters (“AEOI”) (on May 6, 2014); the acceptance of the Multilateral Competent Authority Agreement (on October 29, 2014), by means of which Argentina assumed the obligation to automatically exchange information related to bank accounts, pursuant to the rules set in the Common Reporting Standard (CRS); and the acceptance of the subscription to the Joint Declaration by means of which Argentina committed to automatically exchange information in September 2016 as an “early adopter”.

The CRS, along with the Model Competent Authority Agreement, are part of the Standard for Automatic Exchange of Financial Account Information in Tax Matters (Standard Report), published by the OECD in July 2014.

This Standard Report sets out the procedure to carry on the automatic and periodic exchange of information between the Convention parties. It includes information on remaining balances to December 31, 2015, and all kind of information related to payment of interests, dividends, income, results arising from the selling of financial assets, and other kinds of income that assets might generate.  

Currently, over 50 jurisdictions adhered to the Standard Report committing to carry on with the necessary actions for implementing the automatic information exchange by 2017. Other than Argentina, the involved countries are: Anguilla, Barbados, Belgium, Bermuda, the British Virgin Islands, Bulgaria, Cayman Islands, Colombia, Croatia, Curação, Cyprus, the Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Hungary, Iceland, India, Ireland, the Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Montserrat, the Netherlands, Niue, Norway, Poland, Portugal, Romania, San Marino, Seychelles, the Slovak Republic, Slovenia, South Africa, Spain, Sweden, Trinidad and Tobago, Turks and Caicos Islands and the United Kingdom.

In addition, another 47 jurisdictions committed to promote its implementation by 2018: Albania, Andorra, Antigua and Barbuda, Aruba, Australia, Austria, the Bahamas, Bahrain, Belize, Brazil, Brunei Darussalam, Canada, Chile, China, Cook Islands, Costa Rica, Dominica, Ghana, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Lebanon, Marshall Islands, Macao (China), Malaysia, Mauritius, Monaco, Nauru, New Zealand, Panama, Qatar, Russia, Saint Kitts and Nevis, Samoa, Saint Lucia, Saint Vincent and the Grenadines, Saudi Arabia, Singapore, Saint Maarten, Switzerland, Turkey, United Arab Emirates, Uruguay and Vanuatu.

The Argentine Tax Authority (AFIP), on December 30, 2015 issued General Resolution No. 3826/2015 through which it established information on foreign bank accounts’ regime for financial entities to provide the information required in the above-mentioned context.

The AFIP coordinated its actions with other Argentine entities. The Argentine Central Bank (by means of Communications “A” 5581 and “A” 5588), the National Securities Commission (by means of General Resolution No. 631), and the Argentine Superintendence of Insurance (by means of Resolution No. 38632), during 2014, it issued resolutions for the financial entities to take actions to identify holders of bank accounts reached by the Standard.

Regarding the steps that must be complied with to definitively implement these exchanges of information, many questions arise taking into special consideration banking secrecy and the confidentiality of the information provided in this context.