MercoPress. South Atlantic News Agency

Agreement between Argentina, U.S. on undeclared deposits ready to be signed

Argentine residents are believed to have US$ 100 billion in undeclared accounts in the US

Argentina's “Superminister” of Economy, Industry, and Agriculture Sergio Massa is counting on an agreement to be signed with the United States shortly to detect undeclared bank accounts abroad which would allow holders to evade taxes.

Some US$ 100 billion belonging to Argentine nationals are believed to be in undeclared US accounts, thus evading local taxes, it was reported.

The bilateral agreement is to create an automatic exchange of financial information, according to El Cronista, citing Casa Rosada sources.

The agreement to be signed by Massa and U.S. Treasury Secretary Janet Yellen will regulate “exclusively the automatic exchange of financial information on an annual basis.” The US “Foreign Account Tax Compliance Act” (FATCA), in force since 2013, aims to combat non-compliance by US taxpayers using offshore accounts. Hence, the United States has negotiated bilaterally instruments for the exchange of information for tax purposes, having signed to date FATCA Agreements with over 100 jurisdictions.

El Cronista explained that this agreement was a part of the bilateral relations established by Presidents Alberto Fernández and Joseph Biden, who are expected to meet informally at the upcoming G20 G20 summit in Indonesia. The newspaper also reported that all the details of the agreement have already been finalized.

As per the new instrument, Argentina's AFIP tax bureau would have on September 30 of each year the information collected by the US administration on “certain accounts opened in US financial institutions whose holders are residents of Argentina.” Thus, the Foreign Account Tax Compliance Law will allow the automatic exchange of information with that jurisdiction that Argentina already has in force with the OECD countries, and that allows the exchange of information on Argentine accounts abroad. The agreement is expected to come into force by 2023.