Tuesday, February 27, 2024

ECONOMY | 09-11-2022 21:34

Argentina will sign tax info exchange deal with United States soon, says AFIP chief

Head of Argentina’s tax agency confident that Argentina will sign an agreement with the United States government regarding the exchange of tax information later this month.

The head of Argentina’s tax agency says he is confident that the government will sign an agreement with the United States government regarding the exchange of tax information this month.

Speaking to a local radio station, AFIP head Carlos Castagneto said that he expects the deal to be inked in November. The move will allow the authorities to investigate undeclared foreign currency holdings, which officials believe could total more than US$100 billion.

"We are about to sign the agreement. The agreement has already come and gone several times and we have reached an agreement with our counterparts," said Castagneto.

"There is at least US$100 billion undeclared and to that we must add the assets, which are also part of the agreement," he remarked.

The AFIP chief emphasised that after the signing of this agreement "there will be a before and an after" as far as tax administration is concerned, given the scope of the regulation.

"The difference is that now we consult on specific cases. We ask for [information on] 'Juan' and they answer us [about] 'Juan'. After the signing of the agreement we will have all the necessary information," he said.

The tax info exchange deal was at the heart of talks last month that involved US senators and Economy Minister Sergio Massa. Under it, the United States will share information from the Internal Revenue Service (IRS) with the authorities in Argentina via an automatic exchange of financial data.

Castagneto also said that the investigations into the payment of tax by companies will be deepened, insisting there is no relation between what companies and individuals pay.

"Commercial companies account for 52 percent of tax payments and human beings, plus the self-employed and freelancers, 30 percent. The equation is unreasonable given that everyone pays 35 percent," Castagneto explained.

The head of the AFIP recalled that after a series of analyses carried out by the technical teams, a total of 222 companies were found to have paid “zero” income tax and therefore investigations had been expanded.

Castagneto said that "there is a group of companies that are paying very little income tax." He claimed that there are cases in which firms were paying between four and six percent of the 35 percent that should be paid.

The AFIP official also revealed that tax agency authorities had identified “fraudulent manoeuvres in manufacturing and cigarette companies” that had seen the state’s coffers lose out on “almost one billion pesos in tax evasion.”

He said cigarettes for sale would soon move from the existing manually stamped system to “a digital system so that each pack is registered with the agency.”

"We see a lot of tobacco smuggling, with this system we are going to eradicate evasion with respect to the marketing and production of cigarettes," said Castagneto.



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