On 26 July 2021 the OECD published the stage 2 peer review report on Argentina in relation to making dispute resolution mechanisms more effective under action 14 of the action plan on base erosion and profit shifting (BEPS).

The minimum standard under BEPS action 14 aims to make tax dispute resolution more effective, and member countries of the OECD’s Inclusive Framework are being reviewed and monitored in the peer review process in relation to compliance with the minimum standard.

The report notes that Argentina has a modest tax treaty network with just over 25 tax treaties and has an established mutual agreement procedure (MAP) programme, with 16 cases pending on 31 December 2019. All but one of Argentina’s tax treaties contain a provision relating to the MAP. The treaty network is generally consistent with the requirements of the minimum standard, with some exceptions.

Around 30% of the tax treaties do not include a provision stating that mutual agreements should be implemented notwithstanding any time limits in domestic law as required under Article 25(2); and do not include the alternative provisions for Article 9(1) and Article 7(2) to set a time limit for making transfer pricing adjustments.

Around 27% of the tax treaties do not contain the equivalent of Article 25(3) of the OECD Model providing for the competent authorities to consult together for the elimination of double taxation in cases not provided for in the tax treaty.

In order to be fully compliant with the minimum standard, Argentina therefore needs to amend some of its tax treaties. Argentina has signed the Multilateral Instrument (MLI) to implement tax treaty related BEPS provisions in bilateral tax treaties, through which some tax treaties will be updated. Where treaties are not covered by the MLI, Argentina intends to update all of its tax treaties through bilateral negotiations, and for some of these treaties it has already begun to take action.

Argentina does not currently have a bilateral APA programme, but has reported that it is preparing a regulation to enter into bilateral APAs and to allow the roll-back of such APAs, which would then comply with the minimum standard.

Argentina provides access to the MAP to eligible taxpayers; and has a bilateral notification process for situations where the issue raised in a MAP request is not considered to be justified. Currently this process is not documented with regard to the steps to be followed when this decision is made, and there is no guidance on the availability of the MAP and its practical application, though this is currently being prepared.

In 2016-19 MAP cases were closed on average within a timeframe of 24 months, which is the targeted time frame, as the average time actually taken was 13.44 months. As the MAP inventory at 31 December 2019 has increased substantially, additional resources are necessary to cope with the increased MAP cases, and to resolve them in a timely and effective manner.

The competent authority operates independently of the audit function in the tax authorities and takes a pragmatic approach to resolving MAP cases effectively. Argentina monitors the implementation of MAP agreements and no problems have been raised on this.