New Tax Information Regime: Beneficial Owners and Registry of Foreign Entities Obtaining Passive Income

The Argentine Tax Authority (the “AFIP” after its acronym in Spanish) issued Resolution No. 4697/2020 (“GR 4697”), which was published in the Official Gazette on April 15, 2020.

 

GR 4697 revoked, as of the day of its publication, Resolution No. 3293/2012 (“GR 3293”), which regulated three information regimes:

 

• Title I: Annual information regime for Argentine individuals and entities.
• Title II: Registration regime to inform any transfer of corporate participations or equity interest.
• Title III: Information regime of corporate authorities and its modifications.

 

These three regimes are now regulated by GR 4697.

 

In principle, the regimes provided in Titles II and III did not have any amendment and continue to be as they were regulated by former GR 3293.

 

Regarding the annual information regime provided in Title I, the GR 4697 expands its scope and requests to provide additional information. The main additions are:

 

• Mutual funds will have to provide additional information in accordance with the provisions established in the Productive Financing Law No. 27,440.

 

• Argentine entities will have to inform the “Beneficial Owners” of their shareholders and/or related entities. GR 4697 defines “Beneficial Owner” as the individual who: (i) owns the equity; or (ii) holds the voting rights of a company, legal entity or any other type of legal structures –regardless of the percentage of its participation-; or (iii) by any other means, holds direct or indirect control over such legal entity or structure. In addition, the regulations provide certain alternatives for those cases in which it is not possible to identify the beneficial owner.

 

• Individuals domiciled in Argentina will have to inform the performance of management or executive positions or attorney in fact of any foreign entity, as well as the already existing obligation of reporting their participation in any of those entities.

 

• The Registry of foreign entities obtaining passive income, established by section 90 of Law No. 27,260 (Tax Amnesty Law, published in the Official Gazette on June 22, 2016) is finally implemented. Through this new Registry, Argentine-resident entities and individuals will have to inform if they have a corporate participation or perform any management or executive positions in any foreign entity which obtains passive income higher than 50% of its gross income during each calendar year (excluding trusts and foundations). The obliged entities and individuals will have to report certain information regarding the foreign entity and their participation in such entities.

 

Regulations included in GR 4697 have been in force since the day of its publication in the Official Gazette (April 15, 2020). However, the Annual Information Regime provided in Title I will be applicable as follows:

 

1. Taxpayers obliged to comply with the annual information regime for Argentine entities or individuals (in accordance with section 1, points 1 and 2 of Title I of GR 4697) should provide information corresponding to December 31, 2019 and onwards.

 

2. Taxpayers obliged to comply with the annual information regime of foreign entities obtaining passive income (in accordance with section 1, point 3 of Title I of GR 4697) should provide information in relation to those entities and their participation since year 2016 and onwards.   

 

To such extent, for the current year, a special deadline for the filing of the information included in Title I, corresponding to year 2019 is established, and, if applicable, years 2016, 2017 and 2018. Such deadline is determined by the final digit of the information agent’s Tax ID number, as follows:

 

Information agent’s tax ID final number	Deadline
0, 1, 2 and 3	Until October 28, 2020
4, 5 and 6	Until October 29, 2020
7, 8 and 9	Until October 30,2020