Registry of Related Parties
On December 19 2013, the Tax Authorities issued the General Resolution No. 3572 (the “Resolution”). The Resolution sets forth the creation of a Registry of Related Parties (the “Registry”), in which the following information must be provided to the tax authorities: taxpayers and/or those responsible resident in Argentina whose earnings are of the third rate, and who keep certain relations with any other individual domiciled, established, or located in Argentina or abroad. The registration must be performed by electronic data transfer using the tax code, through the Tax Authorities website (www.afip.gob.ar) and an affidavit must be completed using the application program.
Furthermore, the Resolution also creates an Information Regime (the “Regime”) in charge of those subjects to this Resolution who must be enrolled in the Registry. These subjects must report operations performed in the domestic market with any subject domiciled, established, or located in Argentina, with whom any of the mentioned entailments is occurring (see “Relation Assumption” below). In addition, parties subject to any Relation Assumption must submit detailed supporting documents about the reported operations.
The Resolution sets that the total or partial breach of the above obligations will be penalized applying Law No. 11,683 of Fiscal Procedures.
The Resolution came into force on January 3rd 2014, inclusive. However, obligations of registration and information shall be considered fulfilled in due term if formalized before the dates listed below:
– Those registered in the jurisdiction of the Direction of Large Operations National Taxpayers: until April 1st 2014, inclusive, regarding expirations up to March 31st 2014, inclusive.
– Other individuals: until July 1st 2014, inclusive, regarding expirations up to June 30 2014, inclusive.
Parties must file the registration within ten (10) administrative days after the occurrence of any of the following circumstances:
RELATION ASSUMPTIONS
a) A party owns the total amount or the majority of the capital of another party.
b) Two or more parties have alternately:
1. A common party as full or majority holder of its capital.
2. A common party with full or majority participation in the capital of one or more parties, and a significant influence on one or more of other parties.
3. A common party who holds significant influence over them at the same time.
c) A party holds the necessary votes to configure social will, or prevail in the meetings of shareholders or members of another.
d) Two or more parties who have directors, officers or administrators in common.
e) A party enjoys exclusivity as an agent, distributor or dealer for the sale of goods, services or rights by another.
f) A party provides another technological property or technical on which the latter builds on his activities and business.
g) A party involved with another in associations without legal existence as legal entities, among others, condominiums, joint ventures, business collaboration agreements, no corporate grouping or otherwise, through which it exercises significant influence on pricing.
h) One party agrees with another contractual terms which assume the character of preferential, granted in relation to others in similar circumstances, such as trading volume discounts, or financing of operations, or consignment delivery, among others.
i) A party significantly involved in setting corporate policies, among others, the supply of raw materials, production and/or marketing of another.
j) One party develops an important activity only in relation to another party or its existence is justified only in relation to another party, verifying situations such as single supplier or single client relationships, among others.
k) A party substantially provides the funds required for the development of commercial activities of another, among other, by granting loans or providing guarantees of any kind, in the case of financing provided by a third party.
l) A party takes over losses and expenses of another subject.
m) The directors, officers or managers from one party receive instructions or act on behalf of another.
n) The existence of agreements, circumstances or situations for which the direction is given to an individual with minority participation in the capital.