Guest blog: should Argentina sign a tax treaty with Switzerland?

   0   0 Aid, Tax & State-building, Blog, Tax Treaties

Argentina flagNot long ago we published a Switzerland edition of our newsletter Tax Justice Focus, in which a contributor wrote:

“Developing countries wanting OECD-type tax agreements with Switzerland risk being forced into tax concessions on Swiss foreign investments, in exchange for information sharing on tax evaders.”

And the quality of the information they were likely to receive in exchange for those enormous concessions is likely to be exceedingly poor. Now we see a recent article in the Buenos Aires Herald, which looks at an imminent new Double Tax Agreement between Argentina and Switzerland, which we understand is due to be signed tomorrow in Berne:

“The agreement has the objective of eliminating double taxation on income and capital, especially on dividends, interests and royalties,” Switzerland Ambassador in Argentina Johannes Matyassy, told the Herald. “It restores the legal framework on double taxation after Argentina decided in 2012 to not continue applying the agreement.”

In light of what was said in Tax Justice Focus, this needs to be examined carefully. Now, a guest blog by Jorge Gaggero in Argentina, researcher at the CEFID-AR and member of the Red de Justicia Fiscal de America Latina y el Caribe:

Argentina, Switzerland, and tax treaties

In the past years the Argentine Tax Authority AFIP has been signing TIEAs with tax havens, along with making unclear reforms to the Income Tax Law Annex regarding these jurisdictions.

Argentina has been consistently condemning tax havens in international fora (mainly G20 and UNASUR), trying to limit their actions and means to foster capital flight. Yet AFIP’s actions stand in contrast to an acknowledgement by the G8, the G20 and the OECD about the grave limitations of TIEAs: they require specific requests to be made, on a case by case basis and frequently depend on a previous judicial process.

The G20 and the OECD have now decided to endorse a new, much stronger global standard of automatic information exchange, either bilateral or multilateral. Only this will actually be useful for Southern countries like Argentina.

Indeed, top U.S. tax expert Lee Sheppard recently recommended in a strongly worded speech in Norway:

“Do not sign DTAs with tax havens.”

The European Commission has recently recommended that EU members do not sign treaties with tax havens. Even TIEAs with tax havens are useless.

To understand how inconvenient DTAs with developed countries are for Argentina, Jorge suggests reading a paper by tax expert Antonio Hugo Figueroa entitled “Tax treaties to avoid international double taxation or to transfer resources from developing countries to developed ones?”. It is available (in Spanish) here: see page 128.


Related Posts

New estimates reveal the extent of tax avoidance by multinationals

Price Waterhouse CoopersNew figures published today by the Tax Justice Network provide a country-level breakdown of the estimated tax losses to profit shifting by multinational companies. Applying a methodology developed by researchers at the International Monetary Fund to an improved dataset, the results indicate global losses of around $500 billion a year. The figures appear in a […]

READ MORE →

Banking Secrecy in China, its related territories and Taiwan

Hong Kong from Sky 100Foreword. The Tax Justice Network is a non partisan network of experts working towards transparency, so we do not take any position about countries’ territorial and political claims. However, we do expect countries with a de jure (legal) or de facto (in practice) influence over other territories, to take responsibility for their power. We point […]

READ MORE →

Is tax avoidance at the heart of Ireland’s economic miracle?

AIB International Finance Centre Dublin - By Estoy Aquí (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia CommonsComing out of the economic crisis Ireland was one of the best performing economies, with GDP growth rates of 8.5% in 2014 and an extraordinary 26.3% in 2015. But how much of this economic activity was real, and how much a fiction created by Ireland’s tax haven status? A new paper by Heike Joebges of the University […]

READ MORE →

New Report: HMRC’s “Building our Future” programme

bigben-mcbigbenfaceYesterday the Tax Justice Network was in the UK Parliament to launch a report it co-produced with the Public and Commercial Services Union. The report, entitled “HMRC, Building an Uncertain Future” is a study of HMRC’s (the UK tax authority) reform plans which it is calling “Building our Future”. The report published yesterday analysed the […]

READ MORE →

Financial secrecy in football: time for action

bigben-mcbigbenfaceEveryone has known for years that football is rotten to the core and financial secrecy is at the heart of the problem. Why then is no one doing anything about it? This post from the Offshore Game project originally features in the Independent. 

READ MORE →

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top