Tax Information Exchange Agreement Could Boost Ties Between U.S., Argentina
A new agreement between the U.S. and Argentina allows for greater collaboration between the two countries’ tax authorities and is expected to create tax transparency, curb tax evasion, and help to identify money laundering. Argentina’s new president, Mauricio Macri, is also hoping the agreement signed on December 23, 2016 will strengthen ties with the U.S.
“This agreement furthers Argentina’s reintegration in the global economy and marks an important next step in the new era of the U.S.-Argentina relationship,” U.S. Treasury Secretary Jack Lew said in a statement.
The Tax Information Exchange Agreement (TIEA) comes a few months after Argentina opened a tax amnesty program (“blanqueo”), which allows Argentina’s taxpayers to declare unreported overseas assets at a reduced penalty rate of up to 15%. Argentina’s tax authorities hope that taxpayers will view the agreement as another important factor to weigh in the decision to enter the amnesty program and become tax compliant before the program ends in March.
A Tax Information Exchange Agreement is a bilateral agreement whereby two countries establish an official system for the exchange of information related to taxes. A TIEA is not an automatic information exchange system, but rather a specific request for information from one country to another. Countries usually determine conditions that would trigger the requirement to exchange information and the agreement usually details guidelines and criteria related to the exchange of information that must be followed by the requesting party.
Officials will release the details of the TIEA explaining the tax information to be exchanged in the next few months, and the implementation is set to begin in 2017. The TIEA could be a sign of more changes to come, with many experts expecting that a U.S. tax treaty between Argentina and the United States could be signed in the near future.
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