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Argentina's White List Now Available

by Mike Godfrey,, Washington

17 January 2014

On January 7, 2014, Argentina's tax authority (AFIP) issued Resolution No 3576, which finally makes publicly available a list of "cooperative" jurisdictions. This white list can be found on AFIP's website, and is effective from January 1, 2014.

Any country not included in the white list shall be treated as "not cooperative" for tax purposes. Accordingly, this would automatically trigger the undesirable tax treatment for "low or no tax jurisdictions" under Argentinian domestic law.

Alongside many other countries, Argentina has the notion of 'tax havens' in its tax law. Since Decree No. 589/2013, however, Argentina has chosen to switch from a blacklisting system to a white-listing one, which is fairly uncommon by international standards. Now the white list is published, there is much more clarity for taxpayers regarding this matter.

Under Argentinian law, punitive measures for low- or no-tax jurisdictions include for example: higher withholding taxes on outbound payments, tougher transfer pricing regulations and applicability of Argentinian CFC rules. There is also a so-called "60 percent tax" on all payments received from low- or no-tax jurisdictions, as these are presumed to have evaded Argentinian income tax, VAT and excise duties.

For transfer pricing purposes, Resolution No 3576 provides that a country included in the white list at the beginning of a tax year shall be treated as such for the entire tax year. Put simply, a country listed on January 1, 2014 will remain white-listed throughout 2014 for transfer pricing purposes. Any removal during the year may however have immediate effect for other tax purposes.

Although Argentinian law stigmatizes "low- or no-tax jurisdictions", there is no low-tax test, but a tax transparency test. Thus, a country will generally be viewed as "cooperative" if it effectively shares information with the Argentinian tax authorities. Needless to say, many reputable offshore centers such as Jersey, Singapore or the British Virgin Islands are included in the white list. Accordingly, international tax planners might wish to closely monitor this area.

TAGS: tax | tax authority | offshore | transfer pricing | withholding tax | Argentina

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