The Argentine government will receive tax information on undeclared financial accounts in the US belonging to Argentine citizens, but not until September 2024. The exchange comes after the countries signed a deal known as a FATCA agreement (Foreign Account Tax Compliance Act) earlier this month.
The fine print of the deal, which was released on Tuesday on the Treasury Department’s website, states that the information shall be exchanged no later than nine months “after the end of the calendar year to which the information relates or the next September 30”. Since the US Internal Revenue Service will start collecting the data in January 2023, it will be sent in 2024, if and when Argentina fullfils “the protocols of computer security and confidentiality”, according to what tax expert César Litvin wrote on his Twitter account. “It could even be extended for an extra year,” he added.
Since there are elections in November 2023, this means the information would arrive during the next government’s administration. The fine print also reveals that the US government will share information on depository accounts held by individual residents in Argentina and, in the case of financial accounts, also from entities which pay taxes in the South American country.
🇦🇷🇺🇸 Con la firma junto a Marc Stanley, embajador de Estados Unidos, de un acuerdo para el intercambio automático de información fiscal, dimos un gran paso en materia tributaria que nos permitirá conocer el estado de las cuentas que los ciudadanos argentinos tienen en su país. pic.twitter.com/mSrEbVsXH9— Sergio Massa (@SergioMassa) December 5, 2022
The newspaper La Nación reported that the government will submit an amnesty bill later this year so tax evaders can start to report their accounts to the AFIP without facing legal action after the information from the US is shared. “We don’t know if it will pass in December, but we want the whole measure package to be finished by January 1, 2023, when the agreement with the US starts being applied,” an official source told the paper.
“The money Massa is after is not what could come from [tax evaders’ information revealed by the deal] but from what he might catch through the amnesty bill, as a result of the scare,” economist José Siaba Serrate told Ámbito Financiero.
But a lawmaker from Juntos por el Cambio told La Nación that this opposition coalition won’t back the amnesty bill, a position far-right blocks are expected to emulate. In early December, deputies José Luis Espert and Pablo Torello, together with right-wing economists, signed a petition asking the US government not to share tax evaders’ information with the Casa Rosada.
Different government officials estimate that Argentines hold some US$100 billion dollars in the US that haven’t been declared to the domestic tax authority, AFIP. Of that, the Ministry of Economy calculates a minimum yearly collection of a billion US dollars in taxes. It is an attractive money pool for a government and central bank thirsty for dollars. However, these new developments further hampered the possibility of getting those funds any time soon.