Worldwide transfer pricing reference guide 2014

Argentina
Taxing authority and tax law
Tax authority: Internal Revenue Service (Administración Federal de Ingresos Públicos, or AFIP).
Tax law: Income Tax Law (ITL) and Regulations.
Relevant regulations and rulings
Regulations currently in effect:
• AFIP–DGI (AFIP — Dirección General Impositiva) Regulation No. 1,122 (published on 31 October 2001, but applicable for fiscal years
beginning on 31 December 1999), as amended by several regulations: No. 1,227/02; No. 1,296/02; No. 1,339/02; No. 1,590/03;
No. 1,663/04; No. 1,670/04; No. 1,918/05; No. 1,958/05, No. 1,987/05, No. 3,132/11, No. 3,149/11, No. 3,476/13 and External
Note No. 1/08
• Binding tax rulings for general application are not provided
• Opinions from the tax authority are scarce and non-binding
OECD guidelines treatment
Argentina is not an OECD member country, and the OECD Guidelines are not referenced in Argentina’s ITL and Regulations. However,
the tax authority usually recognizes the OECD Guidelines in practice as long as they do not contradict the ITL and Regulations.
Several first level court cases also recognize the use of the OECD Guidelines, so far as they do not contradict the ITL and Regulations.
Priorities/pricing methods
The tested party must be the local entity (i.e., the entity based in Argentina). The taxpayer selects the most appropriate method, but the
AFIP may oppose the selection. Pursuant to the ITL, the accepted methods for transactions with related parties and tax havens are
the CUP, Resale Price, Cost Plus, Profit Split and TNMM. The ITL does not prioritize methods. Regulation 1,122/01 articulates the best
method rule.
The use of an interquartile range is mandatory. However, market price must be used for tangible goods transactions between both
related and independent parties where there is an international price in transparent market, unless there is evidence to the contrary.
For transactions involving grains, oleaginous products, other soil products, oil and gas and all other goods with well-known prices in
transparent markets and where the local company operates through international intermediaries who are not the final consignees of the
goods, the applicable price is the prevailing price in the respective market on the day goods are loaded for shipment or, the agreed-upon
price, if higher. This method may not apply, if the local exporter is able to prove the substance of the operations of the consignee abroad
following certain specific tests included in the regulations. The AFIP has the power to limit the application of this method or extend it to
other transactions, depending on the circumstances.
Export and import transactions with independent parties not located in tax havens are subject to information requirements if the annual
amount of the transaction exceeds ARS1 million, or if the transactions are exports and imports of commodities. The requirements
depend on the different annual transaction amounts and, in some cases, may include calculations of profit margins.
Transfer pricing penalties
For unpaid taxes related to international transactions, the taxpayer is fined 100% to 400% of the unpaid tax. This fine is graduated,
depending upon the level of compliance with the formal duties related to the control of taxes derived from international transactions.
Penalties for fraud are two to ten times of the unpaid taxes.
Criminal tax law stipulates imprisonment for two to six years if the unpaid tax exceeds ARS100,000 for each tax and fiscal year.
If the unpaid tax exceeds ARS1 million, the prison term will increase, ranging from three-and-a-half to nine years.
For late filing of tax returns containing international transactions involving the export/import of goods with independent parties,
the taxpayer will be fined ARS9,000. For late filing of tax returns concerning other international transactions, the taxpayer will be fined
ARS20,000. For the application of penalties related to late filing or lack of filing, it is irrelevant whether or not the transactions were
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