Information requirements

General Resolution No 1375/02 issued by the Federal Administration of Public Revenue (AFIP) was published in the Official Gazette on November 19, 2002.

By issuing this regulation, the AFIP has exercised the powers granted to it by law to appoint as “informing agents” persons or entities which, while not subject to taxable events under tax laws nor responsible for paying tax, are charged with the duty to inform the fiscal authorities of such events.

In this instance, the obligation to inform relates to “economic operations” of any nature, even if gratuitous, “agreed between residents in Argentina and a person acting as representative of a party or entity abroad.”

The Resolution appoints as informing agents in the first place those who act in the transaction as representatives of parties or entities abroad, and in second place those who have taken part in the same transaction in their capacity as “service providers”.

In relation to such events, the AFIP has not yet established the content of the information to be provided by the informing agents to the authority.

However, the Resolution does establish that the information to be provided by those acting as representatives of parties or entities abroad will cover transactions performed as from January 1, 2002.

In the case of service providers, the obligation to inform will only affect transactions carried out as from January 1, 2003.

The terminology used by the AFIP is inadequate, as it indicates that the need to inform covers transactions “agreed between residents in Argentina and those persons acting as representatives of a party or entity abroad.” This terminology is inadequate because it appears to refer to transactions where one of the parties acts in the capacity of representative of the foreign entity. This is evidently not the intention of the law, as the AFIP clearly intends to obtain information on transactions where one of the parties is the foreign entity (and not its representative).

Although the Resolution does not say so expressly, it should be understood that the obligation to act as an informing agent that has been imposed on representatives of parties or entities abroad only applies to those who are resident in Argentina, while holding this capacity. So the regime would not therefore affect persons resident abroad from traveling to Argentina to participate in the agreement of a transaction, act or contract.

In a similar manner, it would seem reasonable to interpret that the obligation to inform does not apply to those who are merely designated as representatives or attorneys, as long as they have not been charged with arranging or participating in any specific transaction. This is so, because the system requires that the representatives of parties or entities abroad should register as such with the AFIP and obtain evidence of “registration” for each party or entity they represent from the entity. Those registered will be required to notify of the termination of the “representative-represented” relationship, indicating the date when the mandate ceased to act as representative. It should also be noted that the representatives of foreign entities, once “registered”, must make a four-monthly filing, even if they have no transactions to inform of during the period.

In view of the above, it would seem reasonable to interpret that the tax authorities only wish to hold records of persons who not only hold a mandate but also perform procedures and “agree transactions” when exercising such representation.

In the case of the obligation to inform that is imposed on those participating in the same transactions in their capacity as “service providers”, it should be noted that the regulation defines them in that manner alone, providing a listing which consists merely of examples, such as “notaries, banks, stock markets, insurance companies, exchange traders, etc.”.

In these cases it is important to point out that the obligation to inform covers “economic transactions agreed between residents in Argentina and persons acting as representatives of parties or entities abroad”, that is to say that the obligation refers to transactions that have taken place (been “agreed”). So it would seem reasonable to conclude that the service provider should not inform of its participation in mere actions, negotiations or consultations not specifically included within a transaction that has actually been carried out.

However, it should be added that the Resolution includes a requirement that affects the providers of services since they began participating in transactions. This requirement is included in section 7 of the Resolution, and establishes that service providers must request the presentation of the document “evidencing the link between the representative and the represented party, retaining a copy” (if the “evidence” is not presented, the provider of the service is not prevented from participating but must inform such circumstance to the AFIP).

No registration requirements are foreseen for service providers, and as has been said, the obligation to inform only affects transactions carried out as from January 1, 2003.

In the case of representatives of parties or entities abroad, December 20 has been established as the limit for registration as an information agent.

Lastly, it should be noted that the obligation to inform that has been imposed on service providers does not prevail over the requirements for secrecy derived from laws of a higher rank, such as that covering professionals.