Transfer Prices in Argentina, regulations and formal obligations demanded by the AFIP
Since 1998, the companies domiciled in Argentina have to show that the agreed prices in the international operations with subjects connected economically or with subjects domiciled in low or no taxation jurisdictions whether they are economically connected with them or not, are in the market value through the presentation of the sworn statement.
This declaration is based on the range given by the article15.1 of the LIG and in the article 21.7 of the Regulation Decree 1.037/2000. The presentation of this information will let the AFIP, have detailed information about the conditions agreed with taxpayers in the operations performed with their related entities, and in this way, assess the compliance of the regulation in this matter.
1. Those who perform operations with natural people or legal entities domiciled, constituted or located in countries of low or no taxation whether there is connection or not.
2. Those who are resident in the country who perform operations with stable establishments settled down abroad out of their ownership.
3. Those who are resident in the country, owners of stable establishments settled down abroad, for the operations the last ones perform with people or another kind of entities domiciled connected, constituted or located abroad, under the terms foreseen in the articles 129 and 130 of the LIG.
Information to declare
1. Biannual sworn statement. For the first six-month period of the fiscal year with information about the operation subject to evaluation of the transfer prices performed in this period. The F.742 must be used.
2. Annual sworn statement with detailed information about the operations subject to evaluation of the transfer prices, and corresponding to the indication of the complementary adjustment that is performed. The F.743 must be used.
3. Comparability analysis to assess the price “arm´s-length” of the transactions subject to the regulation of the transfer prices. A copy of the financial statements for the fiscal year being informed must also be presented as well as for the two previous fiscal years.
Infractions and Penalties
1. The lack of presentation of the sworn statement within the period established by the AFIP is punished with a fine from $10.000 to $20.000 – 3rd paragraph of art. 38.1 incorporated by Law 25.795 – If the taxpayer was a trust partnership, association or any type of entity constituted in the country (it is not necessary a previous requirement). This fine does not foresee an extenuating circumstance in case of late compliance or voluntary payment. The fine is equally applicable in case the taxpayer just presents the sworn statement without the inform of the transfer Price, even though in this case, there is remarkable doctrine that understands the fine could be the one contemplated in the article 39 – first paragraph – of the Law11.683 which ranges from $150 to $2.500.
2. The lack of presentation of the sworn statement and the inform of the transfer prices after the corresponding request from the AFIP is punished with a fine that can reach $45.000 – art. 39, 2nd paragraph -. This fine is accumulative with the one mentioned above. Finally, in case the AFIP reiterates the request and the taxpayer omits the corresponding presentations again and what is more, he had operations whose gross annual amount is the same or higher than $10.000.000 he will be punished with another fine whose minimal amount will be $90.000 and no more than $450.000 – art. 39.1, 4th paragraph -.
At the same time, the lack of de keeping the documentation will be punished with a fine whose minimal amount is $150 and no more than $45.000 (article 39 of the Law 11.683)
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