Through the publication in the Official Gazette of General Resolution No. 5284/2022, the Argentine Federal Tax Authority finally put into effect the “Registry of Foreign Passive Entities” created in 2016 by Section 90 of Law No. 27,260.
The information to be reported annually encompass companies, trusts, private interest foundations and other similar structures, or other entities of any kind incorporated, domiciled or located abroad, which have obtained a passive income higher than 50% of their gross income for the calendar year for which the information is to be reported.
In general terms, passive income is considered to be that which originates from:
- Dividends and any other form of distribution of profits from participations in companies or any type of analogous entity;
- Interest or any type of return from the investments of funds;
- Royalties;
- Lease of real estate;
- Capitalization and insurance operations;
- Derivative instruments, except for hedging operations, or income from FX operations;
- Sale of stocks, shares, memberships, digital currencies, securities, bonds;
- Sale of assets or rights that generate the income indicated above.
The obligation to comply with the reporting regime applies to both individuals or undivided estates owning shares or interests in companies and other entities incorporated abroad, as well as trustees, Argentinian residents, of trusts or foundations incorporated or domiciled abroad.
The information to be reported is as follows:
- Regarding trusts, companies or similar figures: name, type of trust, date of incorporation, domicile, N.I.F. (tax identification number) in the country of residence, CUIT/CUIL/CDI of the Argentine Legal Representative if any.
- Regarding passive income: Total gross income, type of passive income obtained and percentage over the total gross income.
- Regarding the information agent: CUIT/CUIL/CDI, name and surname or corporate name, legal relationship with the entity, tax domicile and percentage of participation in the foreign entity, if applicable.
The information must be provided through the presentation of an annual affidavit, which will be due at the end of July of each year.
Likewise, the resolution establishes that the obligation to report will include passive income obtained in 2018, granting an exceptional term to comply with the periods 2018 to 2021 until the end of March 2023.
This new information regime adds up to the already disproportionate and exorbitant universe of existing information regimes, in certain cases duplicating the information requested; and not even considering that any information related to the assessment of federal taxes should simply be required to the taxpayer when filing its tax return.
This report should not be considered as legal or any other type of advice by Allende & Brea.
