Argentine Tax Authority Establishes New Mandatory Reporting Regime for International Transactions

The Argentine Tax Authority (AFIP) has issued General Resolution No. 5306/2022, published in the Official Gazette on December 27, 2022, which establishes a compulsory reporting regime for international transactions. This Regime repeals the reporting regime established by General Resolution No. 4838/2020 and replaces it by the Regime called “Régimen de Información Complementario de Operaciones Internacionales” (RICOI). The Regime applies to fiscal years ended on or after August 1, 2022.

Reporting parties. All Argentine companies and local trusts must comply with the Regime, regarding legal entities, for the following operations or transactions:

1. Transactions made between foreign related parties (legal entities, assets of affectation, establishments, or trusts located or incorporated abroad) or foreign permanent establishments they own.
2. Transactions entered with entities located or incorporated in a “non-cooperative jurisdiction” or in a “nil or low-tax jurisdiction”.

 

Micro, small, and medium-sized business categories I and II in all their subcategories are expressly excluded from this Regime.

Reportable transactions. The following international transactions must be reported:

1. Cases involving permanent establishments in Argentina, including the following situations:

1. When there are local parties that habitually negotiate contracts and the execution or authorization to execute them takes place abroad.
2. When there are local parties acting exclusively or almost exclusively on behalf of foreign related companies.
3. When the global activity of the local reporting entity results from combining activities carried out by two or more related companies that carry out complementary operations part of the operation of a single or related business.
4. When a foreign entity carries out a work, construction, assembly or installation project or supervision activities connected with them and carries out such activities in Argentina through the successive execution of agreements, either by itself or through one or several related entities, all of them related to the same activity and project, with a duration exceeding 6 months.

2. In case of a transaction resulting in double international non-taxation.
3. When there is a mismatch between two or more jurisdictions regarding the tax treatment of an entity, agreement, or financial instrument that results in a tax advantage or other tax benefits.
4. In case of any kind of agreement, scheme, or plan excluding one or more parties from the obligation to report or be reported under the Common Reporting Standard (CRS) or The Foreign Account Tax Compliance Act (FATCA), including:
   1. Use of an account, product, or investment that is not a financial account, but has features that are substantially similar to it.
   2. Transfer from a financial account, money, and/or financial assets held in a financial account to a non-reporting institution or to a jurisdiction that does not exchange information in the CRS or FATCA, with at least one of the jurisdictions of tax residence of a reportable subject under the terms of General Resolution No. 4056 (AFIP), as amended.
   3. Transfer from a financial account, money, and/or financial assets held in a financial account, to a non-reportable account under the terms of General Resolution No. 4056 (AFIP), as amended.
   4. Reporting incomplete information regarding: (1) an account holder and/or a controlling person; or (2) all jurisdictions of tax residence of an account holder and/or controlling person.
   5. Classifying a payment made to an account holder or controlling person as income that is not reportable under the international standard of CRS or FATCA.
5. In case of business restructurings that fall outside the scope of the international reporting regime “Country-by-Country Report" established by AFIP.
6. When there is indirect Disposal of assets or rights located in Argentina.
7. When there is a concession for the exploitation of any activity involving an economic transfer of capital.
8. When there is an international leasing transaction treated as a financial loan.
1. In case of payments by a non-profit entity to a foreign entity.
10. When a tax benefit is obtained as a result of one of the following:

1. Interconnected payments or transactions that fully or partially return to the person who made them or to any of his partners, shareholders, or related parties.
2. An international transaction involving one or more entities and/or legal entities that do not have tax personality within the jurisdiction in which they are incorporated, domiciled, or located, and their income is directly attributed to their shareholders, partners, participants, owners, controllers, or beneficiaries.
3. Mechanisms causing uncertainty regarding the ownership of an asset for which taxpayers from different jurisdictions may compute a tax deduction of the same asset.
4. Deductible cross-border payments made to companies of the same multinational group that are not tax resident in any jurisdiction.

 

Reporting due dates and filing procedure. The international transactions listed above made during the fiscal year must be reported at the due date for filing the Income Tax return.

The information must be reported electronically on AFIP's website.

This Regime applies to fiscal years ended on or after August 1, 2022.

Characteristics of the information required. When reporting international transactions, taxpayers must report details of the parties involved such as tax ID number, domicile, country of tax residence, and/or jurisdictions involved in the operation.

It is worth noting that the information submitted under this Regime does not imply acceptance or rejection on the side of AFIP regarding the tax treatment of the international transactions reported.

Penalties. Taxpayers that do not comply with this Regime may be subject to fines, as set out in the Tax Procedural Law.