June 25, 2021
Argentina issues new transfer pricing regulations
Taxpayers should review their operations in light of the changes introduced in the transfer pricing rules.
On June 18, 2021, the Argentine federal tax authorities (AFIP) published, in the Official Gazette, General Resolution 5010/2021 (GR 5010), which includes changes to the transfer pricing (TP) regulations established by General Resolution 4717/2020 (GR 4717), extends the due dates for TP filings and introduces a simplified regime for international transactions. For more information on GR 4717, see Tax Alert 2020-1407.
On May 15, 2020, AFIP published GR 4717, containing the regulations implementing the long-awaited TP provisions enacted as part of the tax reform in December 2017. The regulations mainly cover the filing of the TP report (local file) and master file. Additionally, the regulations introduced definitions and requirements for intercompany transactions involving Argentine companies.
General Resolution 5010
GR 5010 includes changes to the TP regulations established by GR 4717, extends the due dates for transfer pricing filings and introduces a simplified regime for international transactions.
Changes to GR 4717
In a divergence from the OECD Transfer Pricing Guidelines and most countries' rules, GR 5010 adds a new rule stating that taxpayers cannot use an entity with operating losses as a comparable for TP purposes, unless the taxpayer (1) adequately justifies that the losses are a characteristic of the business, due to market circumstances, industry or other comparability criteria; and (2) demonstrates that the conditions leading to the losses are not the result of factors affecting comparability.
In addition, the new rules modify the minimum requirements for the submission of the transfer pricing study and master file as follows:
GR 5010 establishes that the master file may be substituted with a sworn statement attached to the group's applicable tax year consolidated financial statements ratifying that there are no modifications to the information previously reported in the last master file, provided the taxpayer complied with the requirement to file the master file or sworn statement for the prior tax period.
The new regulations include a special provision for tax years ended from December 31, 2020 to December 31, 2021. Under that provision, taxpayers must consider the suitability of the comparables selected, and the financial information provided, in their TP filings within the framework of the COVID-19 pandemic, for the same period (i.e., a tax year ended from December 31, 2020 to December 31, 2021) under analysis and in accordance with the recommendations available on the microsite "International Operations" of AFIP's website.
Compliance obligations due dates
Form 2668 and the TP report for tax years ending December 31, 2020 to December 31, 2021 were due from the 23rd to the 27th of the sixth month following the year-end. GR 5010 extends the filing due dates of those tax years from the 23rd to the 27th of the ninth month following the year-end. For tax years ending after December 31, 2021, the filings will be due as from the 23rd to the 27th of the sixth month following the year-end.
Simplified regime for international transactions
GR 5010 establishes a simplified regime for international transactions, under which the taxpayer is relieved of filing Form 2668 and the TP study.
To opt for this simplified regime, the taxpayer must comply with one of the following conditions in the tax year for which the taxpayer is reporting:
Additionally, GR 5010 excludes from the simplified regime taxpayers that meet any of the two following conditions:
Taxpayers that opt for the simplified regime must file "F. 2672 International Transactions Simplified Regime" for the tax year being reported, stating that the prices of their transactions have been agreed to as if they had been carried out between independent parties, without the intervention of an international intermediary. GR 5010 Annex 1 sets out the information taxpayers must include in Form F. 2672. The filing due date is the same as the due date for Form 2668 and the TP report.
Entities eligible for the simplified regime with operations that exceed the minimum requirements established in GR 5010 for the submission of the transfer pricing study for the tax year being reported, must submit the transfer pricing study with the respective working papers within 45 days of being notified by AFIP of the obligation to submit the transfer pricing study.
Companies doing business in Argentina should carefully assess the new TP regulations, especially considering the rule rejecting operating loss comparables and the TP filing obligations.