Undeclared dollars in the US: Massa goes out to look for US$100,000 million with a new tax agreement and aims at a double objective

The Minister of Economy, Sergio Massahas everything ready to sign the agreement for the automatic exchange of tax information between Argentina and the United States next week, with which it hopes detect some US$100,000 million undeclared Argentines before the AFIP and have a tool that can be as useful for your economic plan as for internal politics.

The agreement, which will be signed between November 28 and December 2, according to sources from the Economy and AFIP before iProfesional, It would not only favor the objective of strengthening the Central Bank’s battered reserves, but it would also bring Massa’s management in line with the type of measures proposed by Vice President Cristina Kirchner to go after the “fleeing” dollars..

The estimate in the Government is that in the United States there are around US$100,000 million individuals and Argentine companies in accounts that have not been declared. On this basis, in the economic area they calculate that they could tax an additional $5 billion a year hand in hand with the new agreement.

In addition, Massa would score a point in favor in the internal of the Frente de Todos since he had started looking for this tax information agreement on his first visit to the United States as Minister of Economy.

Undeclared dollars: what is the agreement that Massa will sign about?

Although at first it was expected that Massa would travel to the United States again to sign the agreement the appointment will finally be at the Embassy of the northern power, according to the sources consulted. will sign the minister -with the delegation of powers signed by the president Alberto Fernandez to adhere on behalf of Argentina – and the ambassador Mark Stanley.

the deal will come into effect on January 1 and it will work within the framework of the Foreign Account Tax Compliance Act in force in the United States known as Fatca, by its name in English (Foreign Account Tax Compliance Act). The AFIP on the Argentine side and the IRS, its American counterpart, will be the central bodies for its execution.

Undeclared account information in the US will be sent automatically every September 30

The objective of the Ministry of Economy with this agreement is to identify, based on the data sent by the IRS, all accounts of individuals and legal entities that have tax obligations in the United States -where there are strong sanctions for customers who do not comply with this obligation- to find those that were not declared before the AFIP.

The Information will be sent annually every September 30 by the North American collecting agency and will contain everything registered during the previous year. The sharing of these data it will be automatic and the government would no longer need to send out special requests or go through the complex bureaucratic procedures that usually require dealing with specific cases.

Massa is confident that the agreement will also allow the Government to overcome some elusive maneuvers such as the change of ownership because it also provides information on companies and companies created as offshore. The states of Florida and Delaware are usually the most chosen as “tax havens” by those who seek to avoid the Argentine tax authorities in the United States.

Massa and a double objective: why does the agreement strengthen his alliance with CFK?

In addition to going out and looking for the dollars that the Argentine economy so greedily needs, the agreement will assure Massa to maintain the support of Cristina Kirchner and his political troop, which started out tacit but in recent times both the vice president and deputy Máximo Kirchner have become more explicit.

Faced with the difficulty of avoiding the fiscal adjustment that irritates Kirchnerism for contradicting its historical discourse, Massa aims to find the dollars that “leaked during the previous management”as repeated by the central figures of that sector of the ruling party that for a long time has been trying to set that guideline for Alberto Fernández without success.

The Minister of Economy himself anticipated days ago that, within the framework of this agreement with the United States, he will seek to apply the spirit of a bill presented a few months ago by Senator Oscar Parrilli, a close associate of the vice president, to go in search of of undeclared funds and assets and create a Special Fund to pay the IMF.

The minister aligns his plan with that of Cristina Kirchner to search for “escaped dollars”

The initiative, which was colloquially known as “Fund for the Fund” either “flight tax”gives a period of 6 months to people who have not declared these assets to do so voluntarily and pay a rate of 20% of what has been externalized, in a sort of money laundering. It was approved in the Senate but was stopped in the Chamber of Deputies.

Now Massa is trying to use the information-sharing agreement with the United States to adopt and reformulate that idea: a bleaching with a special aliquot and some incentive for those who externalize their dollars without voluntarily declaring that they would have as deadlines June 30 and September 30, the same day that the Government will receive the information from the IRS. Rate and penalties are still under analysis.

“The United States will no longer be a haunt for Argentines who want to evade taxes”, Massa sentenced days ago in an interview. For his part, the head of the AFIP, Carlos Castagnetoone of Cristina Kirchner’s officials in the Executive, stressed that the agreement “is a path started” by the vice-president “with the agreements signed with the OECD in 2014”.

And he stressed: “Thanks to the joint work of our management with that of Minister Sergio Massa we are going to end the living who cry tax pressure but live from the flight of foreign currency and tax fraud”.

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