The Government sought today to provide details on the agreement for the automatic exchange of financial information signed with the US: despite the skepticism of the experts, it assured that it would end up reaching the final beneficiaries of the Argentine accounts without declaring and reaffirmed that it will include “all states” of that country, more specifically Delaware and South Dakota.
Who provided details was the director of Customs and Sergio Massa’s trusted man in tax matters, Guillermo Michel. “Today, American banks no longer open an account for an Argentine without declaring. Today, all the banks call the Argentine who does not have the declared account and ask him what he is going to do ”, Michel said in statements to journalist Alejandro Fantino on Radio Neura. “This [por el acuerdo de intercambio] includes all 50 US states, including Delaware and South Dakota. It’s an intergovernmental agreement.” added.
The Minister of Economy, Sergio Massa, signed an agreement for the automatic exchange of financial information with the US ambassador to Argentina, Marc Stanley, on Monday at a ceremony at the CCK. In addition, he announced that he will send to Congress a laundering bill, which he will seek to apply from January 1 to September 30.
“With the US you had a bilateral agreement that was case by case. The AFIP had to ask the IRS (for the acronym in English of the Internal Revenue Service) ‘give me Fantino’s account details’. It is now a massive exchange. This goes into effect on January 1, 2023. We are going to receive the information massively every year. Income, interest, dividends will arrive; among other things, that they are going to be informed to the AFIP”, affirmed Michel in a one-on-one with the journalist.
He explained that the US incorporated the country into the Foreign Account Tax Compliance Act (Fatca), a network created by that country, since it did not enter into the multilateral agreement with the OECD. “I give you the information under my rules. With my computer system, with my conditions. The AFIP people who manage Fatca information work in an office with cameras,” revealed Michel, who also said that the agency directed by Carlos Castagneto had to buy special software.
The official clarified that there are 68 exchanges investigated by the AFIP (prior to the signing on Monday) with the US and said that they are “relevant amounts”. He also clarified that they are working on updating the amounts of the criminal tax law.
Then he referred to the doubts that tax experts and specialists currently have, who affirm that it will not be possible to reach the final beneficiaries of some complex companies. “You have to open an account and they make you fill out a form in a bank, which is W8 flame. That’s what an account holder does. If it is a company, the box must also be filled in account holder [titular de cuenta]. We will receive all the information that is loaded in the bank’s form. All the information from the W8 is going to arrive, be it from its own head or from a company”, Michael added. “They will not be able to avoid us,” he completed. However, he pointed out that if someone puts the money in a safe deposit box in the name of another person, it is impossible to reach it. “But, how many people have money in a bank and it is someone else who signs?”
In addition, it was clarified that when an Argentine sets up a company to have American bonds, they must complete the form 1042-s not to pay as a resident in that country. When the stock exchange pays the coupons, it reports who ends up receiving the interest on the bond. That information also goes to the IRS, official sources said.
The tax experts affirm that the IGA forms signed between the US and other countries (such as with Brazil) do not reveal information on the final beneficiaries of foreign companies that have accounts opened in the United States or bank account balances in banks in that country. owned by Argentine resident individuals.
The bilateral intergovernmental agreement was signed on December 23, 2016 between the Argentine and United States governments. It entered into force on November 13, 2017. It allows the exchange of information that may be of interest for the administration and application of national laws related to all national taxes administered by the AFIP, as well as federal taxes of the USA. It contemplates the exchange of information for fiscal purposes in its three modalities: upon request, spontaneous and automatic.
For the automatic exchange of information to take place, the competent authorities must agree on the information to be exchanged and the exchange procedure. This is what Massa and his team have negotiated since their first trip to the US and what was signed earlier this week. The periodicity with which the information is exchanged is annual. Colombia and Brazil already have this modality in agreement with the United States.
The agreement will allow -every year, more precisely, on September 30- to have information collected by the United States on certain accounts opened in US financial institutions whose holders are residents of Argentina. The information that would arrive, strictly speaking, is the identification of the account holder, the gross amount of interest, dividends and other income from a US source received by Argentine residents in accounts in that country, estimated sources familiar with the negotiations, although it is expected the fine print that hasn’t been published yet.