- Advertisement -spot_img
Friday, February 3, 2023

Accounts in the US: Compromise begins January 1st and reaches tax havens

Clarin has agreed to document that will be part of a proposal to be presented by AFIP in the next few hours.

Information exchange agreement with the US for undeclared Argentine accounts in that country will go into effect January 1, 2023 and will arrive in the 50 North American states, including Delaware and South Dakota, that are considered tax havens, These are some of the key points included in the memorandum signed with the US government, according to a document they accessed Bugle.

Details were known hours before AFIP Introduce the resolution by which the initiative to expand the Sergio Massa collection base will go into effect Based on information provided to Argentina by the US Treasury Secretariat. The other major phase project will be laundering that the Minister of Economy will present to Congress, A door that would open to take out part of the dollars located in those accounts.

In a memorandum issued by the Ministry of Economy, it was established that the agreement is “reciprocal”Therefore, “Each party undertakes to obtain the indicated information with respect to all declared accounts and shall annually exchange automatic method”. The US will provide data such as the account holder, the financial institution where it is located, the total amount of interest and dividends, and other associated income.

The two countries had already signed a Financial Information Exchange Agreement (FATCA), although the agreement that came into force earlier this year had different implications. In 2017, the Tax Information Exchange Agreement (TIEA) came into force. Now, “Argentina’s obligations have changed with respect to what they were accomplishing when they did not have an agreement,” the letter details.

Financial institutions with operations in the US had an obligation to report US citizens’ accounts in Argentina through agreements with the IRS (the agency with the same name as the AFIP in that country), because if they did not do so, They were subject to withholding of 30% of their income generated in the US. Now, “the 30% withholding approval will no longer apply” and Argentine entities will “Under the supervision of AFIP”.

In this framework, local banks “should not submit compliance certificates (audits) to the IRS.” considers compromise A “transition” plan for Argentine financial institutions And it establishes that “they must report directly to the IRS in 2023 (March) as they were doing for the 2022 fiscal period and directly to the AFIP reporting platform for subsequent years.”

What changes for Argentine taxpayers?

The document emphasizes that the US “commits all countries with which it has entered into Model 1 IGA agreements to match the information it receives.” IGA 1 is an agreement between governments (the “Inter-Governmental Agreement”) and stipulates that the US administration report any “financial account opened at a US financial institution subject to reporting”.

AFIP will receive as “All information on where American income is derived received by a resident of a contracting country”. This occurs when it is a deposit account owned by a resident of Argentina and in which interest is paid to the said account in excess of US$10 in any calendar year, or deposit accounts In addition to a financial account, payments in the name of an Argentine resident or entities with financial residence in Argentina in respect of recognized income.

For the government, “most relevant may be custodial accounts (where, for example, there are investments in the United States stock market, even through corporate or fiduciary structures).”

According to officials, the implications for Argentine taxpayers are:

  • In general, a non-resident in the US (in this case, an Argentinian) pays taxes in that country for two types of income: (1) FDAP income, also known as fixed, fixed, annual, periodic (FDAP) goes. acronym in Spanish) in English) and which includesinterest, dividend, rent, royalty, e.t.c. consists primarily of passive income); by the nature of local properties and interests in the partnership; (2) ECI income effectively attributable to the conduct of a business in the United States of America (ECI).
  • For payment of these taxes by non-residents, the United States generally applies a Governance and withholding information in charge of the paying North American subject.
  • For entities that are classified as non-US partnerships, certain types of non-US trusts, and non-US transparent entities They also have to identify the residence of the ultimate beneficiaries.

the latter will allow Identify anonymous shareholders of such funds, including Delaware and South Dakota, where companies are formed and partly facilitated by tax secrecy. Tax expert Cesar Litvin cautioned, however, that its scope would be limited because “if the Argentine taxpayer has an account located in the US but held in the Bahamas, Cayman Islands or Panama, a company name in Argentina. Data will not be received.”

see also

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
Latest news
Related news
- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here