The milestone of 2020 is certainly the enactment of the new transfer pricing regulations. On 15 May, the Argentine Revenue Service (“ARS”) released the much-awaited general resolution 4717 (“GR 4717”).
In this regard, GR 4717 introduces new transfer pricing documentation requirements, including a TP report, master file and annual transfer pricing form. The minimum requirements of the TP report and the master file are generally consistent with the OECD standards, but with some deviations, such as the mandatory use of the local taxpayer as the tested party.
GR 4717 particularly focuses on transactions of imports and exports of goods carried out through international intermediaries. Taxpayers that carry out transactions of imports or exports of goods through international intermediaries must obtain and keep the following documentation regarding such foreign intermediaries:
→ Evidence providing the actual presence of the intermediary in its territory of residence according to the regulation of that jurisdiction, having to demonstrate its registration as a legal entity, commercial or similar registration in the country and its registration with the tax authorities of such jurisdiction.
→ Audited financial statements
→ Certification issued by a competent professional in the jurisdiction of the international intermediary, certifying the detail of the direct taxes to which the entity is subject in such jurisdiction, and the tax identification of the entity in the jurisdiction of residence.
→ Certification issued by a competent professional in the jurisdiction of the international intermediary, certifying both the remuneration of the international intermediary related to its intervention in the transactions and – if the international intermediary is a related party – also certifying the details of the purchase and selling prices, and expenses associated with the transactions.
As you may note, GR 4717 increases the documentation burden for a greater number of taxpayers alongside the complexity of the required studies, as well as the process for submitting the documentation on an annual basis. The detailed process of submitting transfer pricing documentation will require a solid coordination between the local taxpayer, its advisors, and the parent company. Companies should consider increasing their resources as they strive to comply with local requirements.
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