A data-sharing agreement was recently signed between the governments of Argentina and the United States that would help boost cooperation in the tax arena.
Argentina’s minister of economy, Sergio Massa, signed the agreement on behalf of his country and March Stanley, the US ambassador signed on behalf of the United States.
As per the agreement, the national tax authority in Argentina would be able to obtain information on trust beneficiaries and accounts of Argentines in the United States.
An automatic tax data-sharing agreement was signed between the Argentine government and of the US.
This would benefit the Argentine national tax authority because they would be able to get access to data associated with societies and accounts that are managed by Argentine citizens offshore.
The agreement in question was signed by the economic minister of Argentina and the ambassador of the United States to Argentina on December 5th.
This indicates that a high volume of data will now be shared between the Internal Revenue Service (IRS) and the Argentine tax authority (AFIP).
A similar agreement had already been signed between the two nations back in 2017, which was part of the Foreign Account Tax Compliance Act (FATCA).
However, the approach used in that agreement had been a different one and they had dealt with sharing of information on a case-to-case basis.
According to Massa, the Argentine economy minister, as there were these limits in place, they were only able to get information related to 68 citizens in 2022.
In order to share data in accordance with the new agreement, the tax regulatory authorities of the two countries would be required to convene their systems.
In this way, the protocol will involve creating joint databases that will be followed and make data sharing easier.
Massa also spoke about the new system and said that it was a huge deal. The economy minister said that it would provide about citizens of Argentina who had deposited their funds in an account in the US.
These citizens would have signed a declaration when doing so, which is required of foreigners. This applies to individuals, along with those who are part of trusts and companies.
In addition, Massa also gave clarification that earning products of societies and trusts will also be disclosed in accordance with the agreement.
The agreement in question is going to go into effect from January 1st, 2023, but the minister of economy in Argentine wants to complement it with the introduction of new legislation.
He wants the new regulations to permit citizens to move their funds and assets to other countries legally, but they also want to ensure that the new legislation can dole out punishments for capital flight and money laundering.
Massa said that the purpose of the new law was to eliminate the concept of a witch hunt. The AFIP was interested in going after those who do not pay taxes, so those who do pay are not burdened.
Back in April, a bill had also been proposed in the senate that demanded that Argentine citizens pay taxes on undeclared goods that they keep offshore.
This was to help the country in paying off its debt to the International Monetary Fund (IMF). In the same month, the head of the AFIP demanded that a global system be created for registering crypto holdings and electronic money.