Menu
  • Locations
  • About Us
  • Services
  • Experts
  • News
  • Knowledge
  • Culture & Career
  • Locations
  • Search
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Seychelles
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & ESG in Taxation
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
  • Real Estate
  • Latest News
  • Pillar Two - Global Minimum Tax
  • Brochures
  • Newsletters
  • Newsletter Subscription
  • Surveys & Studies
  • The Digital Tax Law Center (DTLC)
  • The European Tax Law Center (ETLC)
  • Climate Protection, Green Tax & Energy
  • Sustainability & ESG in Taxation
  • Tax Loss Carryback
  • Real Estate Guide
  • Tax and Investment Facts CEE
  • Assignments to Europe & Asia Pacific
  • Assignments to the Americas
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
  • Pillar Two Team
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
WTS worldwide
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
    About Us

    Here you will find more information on our organization’s structure, experts and global reach.

    Read more
    About Us Our CEO Our Board Our Global Executive Team Quality, Process & Risk Management
  • Services
    Services
    Read more
    Corporate Tax Customs Financial Services Global Mobility Indirect Tax
    International Corporate Tax Mergers & Acquisitions (M&A) Private Clients & Family Office Sustainability & ESG in Taxation Tax Controversy
    Tax Technology Transfer Pricing & Valuation Real Estate
  • Experts
    Experts

    With a representation in over 100 countries, our team offers local expertise on a global scale. Learn more about our experts.

    Read more
  • News
    News

    Find here the latest news 

    Read more
    Latest News
  • Knowledge
    Knowledge
    Read more
    Pillar Two - Global Minimum Tax Brochures Newsletters Newsletter Subscription Surveys & Studies
    The Digital Tax Law Center (DTLC) The European Tax Law Center (ETLC) Climate Protection, Green Tax & Energy Sustainability & ESG in Taxation Tax Loss Carryback
    Real Estate Guide Tax and Investment Facts CEE Assignments to Europe & Asia Pacific Assignments to the Americas
  • Culture & Career
    Culture & Career

    The WTS Global Academy - Bringing value to the whole

    Read more
    Culture and Leadership Diversity WTS Global Academy Career Your Development
    Jobs
  • Locations
    Locations
    Read more
  • Search
16.01.2023

Argentine Tax Court ruling on Transfer Pricing Case

Author
Cristian E. Rosso Alba
Managing Partner
WTS Global Transfer Pricing LATAM Regional Leader
Argentina
View Profile

The Argentine Tax Court has recently ruled on the “Cargill” Transfer Pricing case, concerning the timing for benchmarking the exports of commodities (contract date vs. shipment date) as well as the tax consequences of using a foreign branch in the supply chain of products originating from Argentina.

Cargill Argentine subsidiary (“CSA”) channelled 98% of its commodity exports through a Uruguayan branch (“CSU”). CSA invoiced the exports to CSU, but shipped the goods directly to the final clients (CSU customers). In fact, CSU performed the trader function for the products originating from Argentina, as a branch registered in Uruguay would not be exposed to foreign exchange restrictions, while it would consolidate its income with its head office in Argentina. The prices invoiced by CSU to its clients could be equal to, lower or higher than the price invoiced by CSA to CSU, since the trader would take the pricing risks—and hedge functions—from the date of purchase to CSA until the final sale to each customer.

The Argentine Revenue Service made two Transfer Pricing assessments to CSA, concerning fiscal periods 2000 to 2003: (i) a first one, increasing CSA export price to prevent CSU from experiencing a loss while on-selling such goods to either affiliated companies or deemed related parties (e.g. traders in low tax jurisdictions). For the Argentine Revenue Service, it was unreasonable that the trader, CSU, would be reselling at a loss, despite its risks and functions; and (ii) a second one comparing the value of the transactions carried out by CSU with related companies and traders, with the Argentine-listed “comparable uncontrolled price” published by the Argentine Agriculture Secretary on the date of shipment of the commodities, rather than on the export agreement date.

The Argentine Revenue Service dismissed both assessments. Concerning the first one, the Argentine Tax Court understood that the CSU profit and loss statement was always consolidated in the CSA's annual financial statements, so that the Transfer Pricing adjustment may not be made in the tranche between CSA and CSU. In fact, the Argentine Tax Court rejected the methodology used by the Argentine Revenue Service, since it would overlook the accounting consolidation without providing any sound reason for it. However, the Argentine Tax Court made no elaboration as to the need for the taxpayer's group to create a clear line between CSA Argentine-sourced income and its foreign source, which was collected by CSU.

Regarding the second assessment, related to the adequate timing for pricing commodity exports, the Argentine Tax Court stated that the “Sixth Method” was not in force during the fiscal periods scrutinized by the Argentine Revenue Service, so it was not legal to apply it on a retroactive basis. It should be noted that such a methodology was enacted ex post, namely by a change to the Argentine Income Tax Law in 2003, so as to allow the Argentine Revenue Service to benchmark internationally triangular transactions at the higher price on the export agreement date or the shipment date; whenever an unsubstantiated trader was placed in between. The Argentine Tax Court further noted that if the Argentine Revenue Service sustained that the benchmarking should have been made on the shipment date, it should have adjusted CSA export prices on such date in all cases, not only in those ones that experienced an upward pricing from the agreement date until shipment. In the Cargill case, the latter wouldonly be a minority of the cases, according to the Argentine Tax Court. The taxpayer evidenced that if the Argentine Revenue Service would have benchmarked all CSA commodity exports on the shipment date, consistently, CSA would have experienced a higher loss, rather than a Transfer Pricing deficiency.

The decision of the Argentine Tax Court in connection with the retroactive application of the “Sixth Method” was in line with the ruling of the Argentine Supreme Court in the “Toepfer” case (decision published on March 25, 2015). This ruling set the case law standards for the industry, which were later reproduced in other commodity exporters' cases such as the “Nidera” case (Supreme Court case, August 9, 2016).

Read the WTS Global Transfer Pricing Newsletter here.

Author
Cristian E. Rosso Alba
Managing Partner
WTS Global Transfer Pricing LATAM Regional Leader
Argentina
View Profile
Article published in Transfer Pricing Newsletter #3/2022
Transfer Pricing Newsletter: Update on the recent news and cases in 13 countries
View publication
Newsletter Transfer Pricing
Subscribe here for our Newsletter
Subscribe now
Articles you might be interested in

Read an article from TDM, U.S. alliance partner of WTS Global, on how to avoid pitfalls related to the consistency rule in the allocation and apportionment of deductions to the residual grouping in applying the GILTI high-tax exception.

Common Pitfalls: GILTI High-Tax Exception and Interest Expense Apportionment
Read more

This month marks five years of VAT in the UAE. This document is an excellent report from Dhruva Advisors LLP on how VAT regulations evolved in the UAE, what the challenges are and what the future for VAT will bring.

WTS Dhruva: Five Years of VAT in the UAE - Evolution, Challenges, Future
Read more

Our webinar focusses on the Safe Harbours published by the OECD (interim and permanent) and discusses how these OECD Safe Harbours will impact Pillar Two Compliance Readiness projects.

Webinar: Pillar Two - Deep Dive OECD Safe Harbours
Read more

Get in contact

If you have any questions about WTS Global or our global services, please get in touch.
We will respond to you as soon as possible.

Contact
About Us
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
Services
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & ESG in Taxation
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
News
Knowledge
  • Pillar Two - Global Minimum Tax
  • Brochures
  • Newsletters
  • Surveys & Studies
  • The Digital Tax Law Center (DTLC)
  • VAT Update for the Digital Economy
  • The European Tax Law Center (ETLC)
  • Tax Loss Carryback
  • Real Estate Guide
Culture & Career
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
Exclusive Cooperation With
© 2023 WTS Company Information Data Protection Disclaimer