All the papers are ready and the governments have already been notified diplomatically. The automatic financial exchange agreement with the United States will enter into force on January 1 and the first wave of data on undeclared Argentine accounts in that country will arrive in September 2024.
The information was confirmed to Nation By the US Embassy in the country and sources from the Ministry of Economy. Although the agreement was signed weeks ago, the steps are still missing, and the warnings continue. If these procedures are not completed and on January 1, IGA 1A (for Intergovernmental agreement in English) in full force, the first media package from the northern country will not arrive until the end of 2025.
As determined by the US Treasury Department when it posted the signed IGA 1A – along with a specific memorandum to banks – on its website, in the ninth month (September 2024) An information package containing only the identification of the account holders (natural person) and financial institutions and the total amounts of interest, dividends and other income balances – will not be identified – will arrive from a US source received by Argentine residents and credited to US accounts.
On December 22, through General Decision 5303/22, AFIP led by Carlos Castagneto adapted the rules that Argentine financial entities must comply with when collecting information necessary for the Argentine collection entity to exchange it with the Tax Authority (tax authority). On the other hand, they emphasized in the Department of the Economy during those same days that the publication of IGA 1A by the North American Treasury Department does indeed serve as a notification to Congress (it does not require Senate approval, like other treaties). But Not only were those steps missing, but also notifications that those procedures had been completed through diplomatic notes. That’s over. As mentioned earlier, the lack of translations – being made – was not an obstacle.
The intergovernmental agreement will enter into force on January 1. The US Embassy press office confirmed this outlet. This means, according to the signed text message, that the first exchange will take place in September 2024.
the Foreign Account Tax Compliance Act FATCA was signed in 2010, but entered into force in 2014. The United States has already concluded agreements under this information exchange act with 114 countries, after it was closed with Argentina at the beginning of this month. But, There are complaints in Europe about the lack of information sent from that country, as well as statements by US officials and experts that no states or the federal government currently have the necessary number of personnel to send such a wealth of information.
This agreement is universal – more precisely, standard – and does not include idiosyncrasies by country, not even in the case of Argentina. It is mutual and is not retroactive (will not include 2022 information). However, on this last point, some tax experts and tax attorneys recall that Tax information exchange agreements It was signed in December 2016. This is the previous and required step for IGA 1A. It is the bilateral agreement under which Argentina can request information from the United States, but on a case-by-case basis.
Months ago, no one seriously believed that the United States could close the IGA 1A agreement with the current government. This achievement was a triumph for Sergio Massa. Weeks ago, there was suspicion that the agreement had actually been signed. Despite this achievement, the scope of the agreement is temporarily and practically limited. It will only include information from Form 1042-s (Informational Return Filed by Financial Institutions to the IRS which state the North American source of income received by non-residents) and nothing from the W8.
All North American states, as with any federal state, are included in the agreement. Only American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the US Virgin Islands are excluded, because they don’t have the same relationship as the other 50 states with the IRS. These citizens do not pay dividends in the United States. Computer Safeguards for IGA 1A entry into force was complied with by AFIP following a US visit in 2019.
The Ministry of Economy believed that there was a whitewashing process approved by Congress before the end of the year, but the political short circuits between the ruling party and the opposition in the House of Representatives after the maneuvers of the Kirchners following the ruling of the Supreme Court in the House of Representatives. The judiciary hindered the possibility of moving forward with the initiative. In fact, legislative sources said the project has yet to enter parliament.
On the other hand, The President of the National Commission for Securities (CNV), Sebastian Negri, has signed with the President of the Supervisory Authority for Financial Services (SSF) of the Central Bank of Uruguay (BCU), Juan Pedro Cantera, an agreement for mutual cooperation, consultations and exchange of financial information.
CNV said in a statement that the text complements the International Organization of Securities Commissions (Iosco) Multilateral Understanding Agreement on Consultation, Cooperation and Exchange of Information.
“The agreement is part of the Ministry of Economy’s policy to reach agreements that allow access to relevant information on Argentine companies or individuals abroad to fulfill our functions of regulation, supervision, oversight and promotion of fair, efficient and transparent stock markets, protecting investors and reducing systemic risks,” Negri confirmed.
The statement added, “The initiative will provide a tool that allows quick access to information on cross-border operations related to registration, registration or authorization processes for companies and individuals to operate in stock markets.”