The country-by-country report is an annual information report regarding the entities that are part of the MNE Groups and their fiscal jurisdictions in which they operate. It must be submitted by the reporting entity of the MNE Group, according to the report model established in Annex II of General Resolution No. 4130 and according to the tax regulations of the fiscal jurisdiction of the entity.

The report must be prepared for each fiscal year to be reported for each jurisdiction in which the MNE Group operates and for each entity that is part of the MNE Group within each of the aforementioned jurisdictions.

It shall be submitted annually until the last business day of the twelfth month immediately following the closing date of the fiscal year to be reported, of the last controlling entity of the MNE Group.

Who are the reporting entities of the MNE Groups?

The following subjects are required to act as reporting entities of the MNE Groups, regarding a fiscal year to be reported:

1. The ultimate controlling entity resident in the Argentine Republic for tax purposes.
2. A substitute entity resident in the country, designated by the ultimate controlling entity for the submission of the report on behalf of the latter.
   • Only entities with a net worth equal to or greater than $50,000,000 or possessing an operational and/or functional structure allowing them to gather the necessary information to comply with the country-by-country report submission terms as stipulated herein may be designated as substitute entities. A “substitute entity” is understood as an entity that is part of the MNE Group and has been designated by the latter as the sole substitute for the ultimate controlling entity to submit, on behalf of the former, the country-by-country report in the fiscal jurisdiction of that substitute entity or in the one where it is subject to tax payment regarding its economic activity.
3. An entity resident in the country that is part of an MNE Group, which does not correspond to the subjects mentioned in points a) and b), provided that at least one of the following conditions is met:
   • The ultimate controlling entity is not required in its fiscal jurisdiction to submit the country-by-country report.
   • By the deadline for the submission of the said report, the jurisdiction of the ultimate controlling entity has an international agreement in force of which the Argentine Republic is a party, but does not have an agreement on competent authority currently in force.
   • There is a systematic non-compliance by the fiscal jurisdiction of the ultimate controlling entity.

When an MNE Group has more than one entity resident in the country and one or more of the established conditions are met, the group may designate one of these entities to submit the country-by-country report, without prejudice to the penalties applicable to the obligated subjects under this regime in case of non-compliance by the designated entity.

An entity resident in the country owned or operated by more than one MNE Group subject to the regime, and if one or more of the established conditions are met for each group, must submit a report for each of them.

An entity included in point c) above is exempt from submitting the country-by-country report for a fiscal year if the report has been submitted by a non-resident substitute entity to the tax authority of its own fiscal jurisdiction, provided that:

1. Such jurisdiction has established a regime for the submission of the country-by-country report, according to the provisions of General Resolution AFIP No. 4130/2017.
2. As of the date set for the report submission, there is an in-force agreement on competent authority of which the Argentine Republic is a part.
3. There has been no reporting of systematic non-compliance by the entity resident in that jurisdiction or such non-compliance has not occurred.
4. The resident entity in that jurisdiction has been notified of its designation as a substitute entity.

What data should the report contain?

The country-by-country report must be prepared for each fiscal year to be reported, taking into account the provisions of Annex II of General Resolution No. 4130 and including the following data:

For each jurisdiction in which the MNE Group operates:

• The total amount of group revenue, distinguishing between that obtained from related entities and independent parties.
• The result -profit or loss- obtained before income tax or similar taxes.
• The amount of income tax or similar taxes paid, including any withheld taxes.
• The amount of income tax or similar taxes accrued in the current fiscal year.
• Share capital.
• Undistributed accumulated earnings.
• Number of employees.
• Tangible assets, excluding cash and cash equivalents.

For each entity within each of the mentioned jurisdictions:

• Tax identification number (CUIT or NIF) in the country of fiscal residence if the entity is foreign.
• Name or corporate name.
• Fiscal jurisdiction and country of incorporation, where applicable.
• Principal economic activities and description of their nature.
• Any other information considered relevant, along with an explanation of the data for better understanding of each point.

Presentation of the report: The report can be submitted through one of the following options:

• Electronic data transfer of the sworn statement form F. 8097, accessing the service with “Presentación de DDJJ y Pagos” fiscal key. For this operation, you must have a level 3 fiscal key.
• Via the Web Services named “Presentación de DDJJ – perfil contribuyente”. Once the information is submitted, the Federal Administration will conduct the corresponding systemic checks to issue the definitive acknowledgment of the submitted data.

The validation process result will be made available to the reporting entity through the Electronic Tax Domicile or the Web Services named “Webservices Consumir/Comunicaciones de Ventanilla Electrónica”.

If the submission is rejected, the system will reflect the detected inconsistencies, which must be corrected, and a new submission must be made.

Non-compliance

Failure to comply with these obligations will result in the application of sanctions provided for in Law No. 11.683. Additionally, those responsible may jointly or separately be subject to one or more of the following actions:

Placement in an increasing risk category for tax audit, as provided for in General Resolution No. 3,985, Risk Perception System (SIPER). Suspension or exclusion, as applicable, from the Special Tax Registers of this Agency in which they are registered. Suspension of processing of Exclusion or Non-Retention Certificates requested by the responsible party, in accordance with current provisions.

Automatic exchange of country-by-country reports

Argentina began its exchanges of Country-by-Country Reports (CbC) starting from the fiscal year 2017, and since then, the International Taxation Directorate has carried out extensive work in accordance with the provisions of OECD BEPS Action 13 Report.

The AFIP automatically exchanges the Country-by-Country Report annually with the competent authorities of jurisdictions with which it has signed a competent authority agreement. This applies to jurisdictions where one or more entities belonging to the MNE Group referred to in the report are considered tax residents.

The information reporting regime was implemented through General Resolution No. 4130/2018 and its amendments, which establish the forms, deadlines, conditions, and obligated subjects.

As of 2021, a total of 81 jurisdictions, including Argentina, are part of the competent authority agreement for the exchange of country-by-country reports.

Exploitation of Received Information

With the information obtained through the CbC exchange, combined with that held by the Agency, the aim is to identify:

• Multinational groups with significant revenues in the country.
• High-risk jurisdictions engaging in transactions with Argentina.
• High-risk groups (determined based on established systemic indices) operating with local entities.
• Evolution of patterns associated with base erosion and profit shifting risks.

The OECD’s Manual on Effective Use for Tax Risk Assessment provides recommendations for possible analyses based on the data from the Country-by-Country Report.

In this regard, the fact that a company generates high revenues with related parties but has limited human resources (employees) raises a situation to be considered in the risk analysis, especially when the percentage of pre-tax profit is low.

In an initial risk analysis based on the FY 2018, 46 sets of firms belonging to MNE Groups considered at risk were identified, located in 24 jurisdictions.