International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Argentina: A decisive focus on customs valuation and TP matters is imperative

Sponsored by


Silvana Blanco of Deloitte Argentina overviews Argentina’s increased focus on customs valuation and TP issues, with key lessons for multinational corporations.

Argentina’s economy has been troubled for decades, its history punctuated by various episodes of crises, hyperinflation, booms and busts. Though, Argentina has natural resources in energy and agriculture, it has fertile lands, gas, lithium reserves, and also has great potential for renewable energy. In addition, Argentina is a leading food producer with large-scale agricultural and livestock industries, and it has significant opportunities in some high-tech innovative services industries.

In this uncertain context, multinational companies doing business in Argentina are adopting different strategies to survive until the economy shows signs of recovery. In this paradigm, the Argentine tax authorities are increasingly focusing on customs valuation and TP issues.

Recent experience suggests that exchange of information between AFIP (the Argentine tax authority) and DGA (the Argentine customs authority) does occur. In fact, the DGA is paying special attention to those transactions between related parties that involve a related-party international intermediary between an Argentine importer and the (related) foreign manufacturer and supplier of the goods.

In many of these transactions, the DGA argues that such an intermediary does not have any substance. Therefore, it does not perform any business activity, render any service or add any value that may justify the price differential in the final step of the supply chain.

On May 15 2020, the Argentine tax authority released the general resolution GR- 4717/2020. This GR particularly focuses on transactions of imports and exports of goods carried out through international intermediaries.

According to local regulations, the remuneration of the international intermediary should be supported and consistent with the functions performed, the assets employed, and the risks assumed. The local tax authorities are requesting more details on activities carried out through international intermediaries. In addition, the taxpayer must demonstrate that the assets, functions and risks of the foreign intermediary are in accordance with the volume traded, which will be established by AFIP.

Nevertheless, according to the customs authorities, some taxpayers unnecessarily include intermediaries in the supply chain to artificially increase the controlled prices in import transactions, thereby transferring foreign currency abroad (or, vice versa, to reduce prices in case of exports). According to customs authorities, the consequences of artificially interposing intermediaries are serious and may constitute an administrative infringement or, in more serious cases, a felony, depending on the interpretation of the facts by the customs authorities.

Taxpayers should prepare a defence file to be able to shift the burden of proof to inspectors in customs and TP examinations. Take, for instance, if the Argentine importer/exporter submits information regarding the international intermediary.

For substance purposes:

Specify the number of:

  • Employees;

  • Sales;

  • Assets;

  • Filings of financial statements;

  • Agreements that the international intermediary may have with the owner of the IP, or with a contract manufacturer in the country of origin; and

  • Accounting certifications regarding the costs borne by the international intermediary with respect to the goods sold to Argentina, among other documents.

For functional analyses of the international intermediary purposes:

  • Describe in detail the functions performed in the transactions, and risks assumed by the international intermediary.

It could be challenging for many taxpayers to obtain this information from their international intermediaries, given its sensitivity and confidentiality. In fact, it is not uncommon that headquarters of multinational companies are reluctant to share this information and documentation with local customs and tax authorities.

As such, taxpayers must undertake a basic sensitivity analysis when they have this type of transaction and consider obtaining the required information in advance of any official request. Lacking a clear understanding of the international intermediaries’ rules risks significantly limiting the chances of success of any future defence. Companies doing business in Argentina should carefully assess this AFIP and DGA trend, especially considering the existing economic uncertainty.

Another way to mitigate risks of a potential customs audit is to engage the special process presented by General Resolution 4419 published, in the Official Gazette, on February 7 2019. In this regard, related sellers and importers commonly enter into agreements with price review clauses, which allow for changes to the price of imported goods after they clear customs. Many of these import transactions use a third-party operator related to the seller and the importer. To avoid taxpayers underreporting the tax liabilities associated with imports and overbilling for imports, the tax authorities have issued GR 4419. This provides provisional import values a declaration that will become definitive at the end of each year, after the corresponding TP adjustments are performed. Nevertheless, because of the amount of information taxpayers must provide to the DGA, to qualify for this special regime, most companies have been reluctant to join.

Customs and tax authorities will continue focusing on customs valuations and TP issues. Multinational corporations must stay on top of these matters to avoid misunderstandings.

more across site & bottom lb ros

More from across our site

PwC publishes detailed accounts of its behaviour in the tax scandal in Australia, while another tax trial looms for pop star Shakira.
The winners of the ITR Europe, Middle East, and Africa Tax Awards 2023 have been announced!
The winners of the ITR Asia-Pacific Tax Awards 2023 have been announced!
Mauro Faggion appeared cautiously optimistic as the European Commission waits to see whether all 27 member states will accept its proposal.
The global minimum rate also won’t entirely stop a race to the bottom, according to a tax director speaking at an ITR conference in London.
The country’s tax authorities are not interested in seeing transfer pricing studies any more, it was claimed at an ITR industry conference in London.
The controversial measure is being watered down after criticism from the European Central Bank.
More than 600 such requests were made in 2022, while HMRC has also bolstered its fraud service, it has been revealed.
The General Court reverses its position taken four years ago, while the UN discusses tax policy in New York.
Discussion on amount B under the first part of the OECD's two-pronged approach to international tax reform is far from over, if the latest consultation is anything go by.