Since 2017, Argentina has implemented formal transfer pricing documentation requirements, mandating the submission of the master file, country-by-country reporting, and local file, along with other local transfer pricing forms. The legislation is primarily based on Argentina’s Income Tax Law (ITL) and ITL Regulations, with references to the Arm’s Length Principle in specific articles of the ITL.
Furthermore, the Argentine Internal Revenue Service (AFIP) has introduced Regulatory Decree N°862/2019 and General Regulation N°4717/2020 (as amended by several regulations), which outline the documentation requirements. Argentina follows the OECD rules as recommendations and uses them to interpret local rules.
Related party definitions are detailed in various articles, encompassing ownership, capital relationships, shared parties, influence, exclusivity, technology transfer, and more. These definitions help determine which transactions fall under transfer pricing regulations.
Transactions with entities in tax havens are also subject to transfer pricing rules. A new process to determine “tax havens” has been established, with a list of non-cooperative countries for fiscal transparency purposes.
In June 2021, AFIP introduced a simplified transfer pricing regime for insignificant intercompany cross-border transactions, offering relief from extensive transfer pricing studies. Taxpayers need to meet specific conditions to qualify for this procedure.
There are no provisions for Advance Pricing Agreements (APAs) in Argentina, leaving taxpayers without the option to negotiate with tax authorities.
The risk of transfer pricing audits in Argentina is notably high, with AFIP scrutinizing multinational companies with international related party transactions, losses, or low profits.
Transfer pricing documentation requirements are comprehensive and involve detailing activities, risks, assets, transactions, foreign related parties, methods for price justification, comparables, and more. An industry and macroeconomic analysis is recommended for better context.
Argentina offers various transfer pricing methods aligned with the OECD Guidelines, including CUP, Resale Price, Cost Plus, Profit Split, TNMM, and a unique “sixth method” for certain transactions.
Financial information for comparables is often sourced from international databases, with a preference for pan-American comparables. The lack of supporting information may lead to the exclusion of comparables from the analysis.
Record-keeping and penalties for non-compliance are also addressed in this article, with stringent requirements for timely submission and penalties for violations.