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Ten keys to understanding the exchange of tax information with the US: what data AFIP will receive

Ten keys to understanding the exchange of tax information with the US: what data AFIP will receive

The IRS confirmed that the AFIP meets the necessary requirements to activate the agreement. What information from Argentines will the AFIP receive?

The controversy among accounting studies Argentines about whether the United States tax authorities had given the go-ahead to the AFIP security systems to begin the tax information exchange agreement It ended.

He Internal Revenue Service (IRS) reported that its Argentine counterpart meets the security requirements so that the North American banks can pass on to the collection agency the data on the accounts of Argentines in that country.

It was the missing step for the The so-called FATCA agreement (Foreign Account Tax Compliance Act) that Argentina and the United States signed in 2022 is put into operation. There was a serious controversy between accounting studies about the validity of the agreement.

The AFIP now officially reported that it has approval from the IRS. Unofficially, through spokespersons, he had been ensuring this almost since the agreement was signed. at the impulse of the former head of Customs, William Michel, during the management of Carlos Castagneto in the AFIP.

Below, we share the 10 key points to take into account from FATCA, as pointed out by the CEO of SDC Tax Advisors, Sebastián Domínguez:

1 – In what cases will the US inform Argentina of data on accounts opened in financial institutions?

  • The United States will send certain information on deposit accounts in banking entities, to the extent that the account holder is a human person residing in Argentina and More than US$10 of interest is paid into that account at any time during the year.

2 – What type of accounts are called deposit accounts?

  • A Deposit Account is considered to be any commercial account, checking account, savings account, term account or savings account or other account documented by a certificate of deposit, savings, investment, debt or other similar instrument, opened in a Financial Institution in the ordinary exercise of its banking or similar activity in the United States.

3 – If interest exceeds US$10 in the year, what information will Argentina receive?

If interest exceeds US$10, the United States will send the following information:

  • a) Name and surname, address and CUIT of the Argentine resident who owns the deposit account.
  • b) Deposit account number.
  • c) Name and identification number of the Reporting US Financial Institution.
  • d) The gross amount of interest paid in the Deposit Account.

4 – What deposit account information will the United States NOT send to Argentina?

  • It will not report deposit account balances, but only interest where applicable.
  • It will not report gross amounts of interest paid if the account is owned by other types of entities resident in Argentina that are not human persons, such as corporations, limited liability companies, trusts, foundations, etc.
  • It will not report information from a savings account owned by a corporation resident in Argentina in which more than US$10 of interest was charged during the year.
  • It will not report information from an open checking account owned by a human person resident in Argentina in which no interest was charged during the year.

5 – In what cases will the US inform Argentina of data on financial accounts opened in financial institutions in that country?

  • The United States will submit certain financial account information other than the deposit accounts mentioned above when U.S.-source dividends and/or other Washington-source income are paid or credited to the account, to the extent subject to reporting. under Chapter 3 of Subtitle A or Chapter 61 of Subtitle F of the United States Internal Revenue Code, in both cases, regardless of the amount.

6 – Is the parameter of more than US$10 also applied to report information to Argentina?

  • No, in the case of the financial accounts mentioned, there is no limit amount up to which the information is not reported.
  • If it falls within the situation described, the information will be sent regardless of the amount of dividends and/or other reportable income.

7 – What financial account information will Argentina receive?

In the case of reportable financial accounts according to the previous point, Argentina will receive the following information:

  • a) Name and surname, company name or name, address and CUIT of the Argentine resident who owns the financial account.
  • b) Financial account number.
  • c) Name and identification number of the Reporting US Financial Institution.
  • d) The gross amount of US source dividends paid in the year in the account.
  • e) The gross amount of other United States source income paid or credited to the account, to the extent subject to reporting under chapter 3 of subtitle A or chapter 61 of subtitle F of the United States Internal Revenue Code Joined.

8 – What financial account information will the United States NOT send to Argentina?

  • It will NOT report financial account balances but only the dividends and other income mentioned when applicable.
  • It will NOT report information on companies that are not resident in Argentina, even if the final beneficiaries are residents of Argentina.
  • It will NOT report the collection of dividends distributed for participation in a European Company since they are not from the United States.

9 – When will Argentina receive the information?

  • The exchange of information is in effect and the information that the United States will send will be from January 1, 2023 onwards.
  • The AFIP has reported on its website that the requirements are met for the first exchange of information to take place in the month of September 2024 with respect to the 2023 information.

10 – Will the information received by Argentina be known before the first stage of laundering ends?

  • The fiscal package project, which has half a sanction from the Chamber of Deputies, contemplates a laundering whose first stage ends on November 30, 2024 with requirements to be met by September 30, 2024.
  • If it becomes law, on that date it will be possible to know if the United States sent the information but not the details of it.
  • Considering previous experience, in which the AFIP takes a considerable time to process and make available the information obtained through the multilateral information exchange agreement “CRS”, there is a possibility that the laundering period will come to an end sooner. that this information is available.

Source: Ambito

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