The main features of the “Anti-evasion Plan II”

Some of these measures are very controversial, especially the one related to undercover agents, which has raised different opinions, because it could violate some constitutional rights of taxpayers.

The main amendments are:

1.     “Undercover Agent (agente encubierto)”: The new law authorizes agents of the AFIP to work as undercover agents (i.e., pretending not to be agents on duty) and transact business with merchants and shopkeepers in order to control compliance with their basic invoicing obligations, i.e., giving receipts or equivalent documents, for the relevant transaction. Undercover agents must obtain an express authorization from a senior official of the AFIP, which must be granted based only on the record of the relevant taxpayer. If the undercover agent verifies that the taxpayer did not issue the relevant receipt, he/she is enabled to issue a statement in order to apply the relevant sanctions.

The mechanism is basically aimed to control small retailers, restaurants and the like, and independent professionals.

2.     Alternative domicile (domicilio alternativo): In case the AFIP finds out a domicile or residency other than the one registered for tax purposes (i.e. the one where the taxpayer receives credit card statements), the law sets forth that the tax authority could declare it (by means of a grounded resolution) as the taxpayer’s alternative domicile, being valid and binding any notice or requirement sent there.

3.     Electronic fiscal domicile (domicilio fiscal electrónico): The law enables taxpayers to declare an electronic fiscal domicile, where he/she could receive any sort of notice or requirement from the AFIP.

4.     Binding administrative ruling: This regime existed prior to the amendment, set forth by the General Resolution of the AFIP No 858. With this amendment, the regime was included in the law, with some variations. The main issues to comment are:

    (i)     the administrative ruling request must be submitted before the occurrence of the taxable event or before the expiration of the term for it to be declared; the previous regime did not provide for this limitation, meaning this that the taxpayer could submit the request at any time;

    (ii)     the ruling must be issued within ninety calendar days from the filing of the request; the previous regime allowed a longer term of ninetybusiness days.

    (iii)     the ruling will be binding for both, the AFIP and the taxpayer, as long as the facts and circumstances governing the request and the opinion remain the same;

    (iv)     the rulings issued by the AFIP will be public and will have to be published; and

    (v)     taxpayers will be able to appeal the rulings before the Ministry of Economy and Production; the appeal must be filed within a ten-day term.

5.     Seizure of goods: the law sets forth a new procedure for cases of goods being transported without the proper supporting documentation. Should this be the case, the tax agents must summon law enforcement officers and witnesses and proceed with the interdiction (interdicción) or seizure (secuestro) of the relevant goods. Furthermore, the law enables the AFIP to declare the confiscation (decomiso) of the goods.

6.     Joint liability: the law sets forth the joint tax liability of partners of business associations which have not been formed pursuant to formal legal requirements (sociedades irregulares) and of de facto business associations (sociedades de hecho).

7.     Fines for not submitting returns related to information regimes: the law sets forth the applicability of fines ranging from $ 5,000 to $ 10,000 for cases where the taxpayer does not submit returns required by information regimes.