VZCZCXYZ0009
RR RUEHWEB

DE RUEHBU #1795/01 2531238
ZNR UUUUU ZZH
R 101238Z SEP 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 9187
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 6546
RUEHCV/AMEMBASSY CARACAS 1482
RUEHMN/AMEMBASSY MONTEVIDEO 6739
RUEHSG/AMEMBASSY SANTIAGO 0766
RUEHBR/AMEMBASSY BRASILIA 6407
RUEHLP/AMEMBASSY LA PAZ SEP SAO PAULO 3525
RUEHRI/AMCONSUL RIO DE JANEIRO 2361

UNCLAS BUENOS AIRES 001795 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
TREASURY PASS IRS FOR HLOUIE, BKISSEL and FNG 
EB/IFD/OIA FOR WSCHOLZ 
TREASURY FOR LTRAN AND MMALLOY 
E FOR THOMAS PIERCE 
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE 
PASS USTR FOR DUCKWORTH 
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 
US SOUTHCOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: ECON EFIN KTFN AR
SUBJECT: ARGENTINE TAX AUTHORITY SEEKS CLOSER TIES WITH IRS AND 
BILATERAL TAX INFORMATION EXCHANGE AGREEMENT 
 
Ref: Buenos Aires 619 
 
¶1.  This is an Action Request for the Department of Treasury/IRS. 
See paragraphs 2 and 8. 
 
------- 
Summary 
------- 
 
¶2. (SBU) The Argentine revenue authority, AFIP, wants to negotiate a 
Tax Information Exchange Agreement (TIEA) with the IRS.  Responding 
to earlier U.S. Treasury guidance that a TIEA could only be 
negotiated as part of a broader Bilateral Income Tax Treaty (BITT), 
AFIP Director Alberto Abad reminded Ambassador that the US had, in 
fact, recently signed a TIEA with Argentina's Mercosur partner 
Brazil based only on the promise of future BITT negotiations.  He 
argued that the exchange of Argentine and U.S. tax data would serve 
not only the interests of both nations' tax authorities, but also 
further our joint priorities in combating money laundering and 
terrorist finance.  He suggested that initial exchanges of tax 
information could be routed through the jointly managed U.S.ICE/AFIP 
Trade Transparency Unit.  AFIP sees the U.S. IRS as a model to be 
emulated and seeks a closer working relationship through a bilateral 
accord.  AFIP will shortly place an attache at Argentina's Miami 
consulate to better coordinate with U.S. Customs authorities on the 
Container Security Initiative and also to better coordinate with IRS 
authorities.  Post requests that senior IRS officials planning to 
attend the October 2007 International Tax Dialogue Conference in 
Buenos Aires come prepared to engage and educate GoA officials on 
U.S. TIEA and BITT priorities and protocols. 
End Summary 
 
--------------------------------------------- ----- 
Seeking a TIEA to Expand AFIP Cooperation with USG 
--------------------------------------------- ----- 
 
¶3. (SBU) In a September 4 meeting with Ambassador, the head of 
Argentina's revenue authority (AFIP) Director Alberto Abad 
re-iterated his original March 2007 (reftel) request that the U.S. 
and Argentina negotiate a Tax Information Exchange Agreement (TIEA). 
 Responding to earlier Embassy explanations (based on guidance 
received from the U.S. Treasury Tax Treaty Office) that a TIEA could 
only be negotiated as part of a broader Bilateral Income Tax Treaty 
(BITT), Abad noted that the US had, in fact, recently signed a TIEA 
with Argentina's Mercosur partner Brazil based only on the promise 
of future BITT negotiations.  AFIP is in regular contact with its 
Mercosur equivalents, he noted, and has already negotiated 
cooperation and information exchange agreements with a number of 
other national tax authorities, including those of Brazil, China (in 
2006), and Italy (recently in 2007).  He also noted close tax 
authority cooperation with Brazil and Chile and close Customs 
cooperation with Uruguay and Paraguay. 
 
4.(SBU) Abad and his DGI Tax Director (equivalent to IRS 
Commissioner) Horacio Castagnola noted current strong and successful 
AFIP cooperation with U.S. ICE on the Container Security Initiative 
and on their joint Trade Transparency Unit (TTU).  They argued that 
the exchange of tax data would serve not only the interests of both 
nations' tax authorities, but also further our joint priorities in 
combating money laundering and terrorist finance. 
 
¶5. (SBU) Abad suggested that initial exchanges of requests of 
individual or company-specific tax information could be flowed 
through the already active TTU jointly run by AFIP's Customs bureau 
and ICE.  He noted that DGI tax officials will shortly be assigned 
to join their Customs colleagues in manning the TTU. 
 
¶6. Background:  Following AFIP's March 2007 TIEA information 
request, EconCouns contacted U.S. Treasury Tax Treaty officer Henri 
Louise who provided background on USG BITT protocols and models as 
 
 
 
well as on the USG's 2007 negotiation of a TIEA with Brazil.  At the 
request of AFIP Tax Director Castagnola, EconCouns then presented 
copies of the 1998 U.S./Venezuela BITT and the 2006 model tax 
treaty.  Also at AFIP's request, EconCouns met on this issue with 
the Ministry of Economy's Undersecretary for Public Revenue Mario 
Presa, whose office develops broad GoA tax policy guidelines.  On 
August 27, the GoA's Ministry of Economy Washington rep Jorge 
Heilpern and Washington Embassy DCM Jose Gabolindo met with Treasury 
Tax Treaty officers Kissel and Louise for exploratory discussions on 
the potential to negotiate a Bilateral Income Tax Treaty (BITT). 
 
------------------------------------ 
AFIP Seeks Closer Ties with U.S. IRS 
------------------------------------ 
 
¶7. (SBU) Argentina does have some contact with the U.S. IRS now 
though Argentina's membership in the Inter-American Center for Tax 
Administration (Centro Inter-Americano de Administracion Tributario, 
which includes Latin nations and the U.S., Canada, Spain, Italy, 
France, Luxembourg and South Africa as members).  But, according to 
Abad, AFIP sees the U.S. IRS as a model to be emulated and seeks a 
closer working relationship through a bilateral accord.  AFIP will 
shortly place an attache at Argentina's Miami consulate to better 
coordinate with U.S. Customs authorities on CSI initiatives, Abad 
said, and also hopefully to better coordinate with IRS authorities. 
 
 
-------------- 
ACTION REQUEST 
-------------- 
 
¶8. (SBU) Post has received country clearance requests for IRS 
Commissioner of the Large & Mid-Size Business Division Frank Ng and 
Commissioner of the Small Business/Self Employed Division Kathy 
Petronchak to attend the International Tax Dialogue Conference to be 
held in Buenos Aires October 15-19.  While post understands that 
these officials' current responsibilities lie in the administration 
of existing tax treaties rather than in their negotiation, it would 
be helpful if the IRS delegation comes prepared to (1) discuss 
existing U.S. BITTs with Mexico and Venezuela; and (2) discuss other 
ways in which AFIP and the IRS can cooperate and work together to 
expand ties. 
 
WAYNE