New transfer pricing information regimes
On September 20, 2017, General Resolution (AFIP) 4130-E was published, implementing two new information regimes referred to transfer pricing regulations.
These regimes were enacted within the scope of the OECD and G20 countries’ Base Erosion and Profit Shifting (BEPS) Action Plan, which entails a series of measures to be adopted by the subscribing countries in order to mitigate double non-taxation or less than single taxation situations for multinational enterprises.
The two new regimes are:
1. Country by country report
This regime includes the annual obligation to report to the Argentine tax authorities (“AFIP”) certain information for each tax jurisdiction in which multinational enterprises do business, provided that the total consolidated group revenue amounts at least 750 million Euro during the preceding fiscal year.
The reporting entity for the purposes of the country by country report is the Argentine ultimate parent entity, other Argentine entity appointed as a substitute for the ultimate parent entity to report the information, or other Argentine entity under set circumstances.
The information to be reported contains: (i) amount of revenue, profit (loss) before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees, and tangible assets other than cash or cash equivalents with regard to each jurisdiction in which the group operates; and (ii) an identification of each entity of the group, their jurisdiction of tax residence, and their main business activity.
The regime is applicable for fiscal years beginning on or after January 1, 2017, and the report must be filed no later than 12 months after the last day of the fiscal year-end of the ultimate parent entity of the group (i.e., for fiscal year beginning on January 1, 2017, the information must be filed in December, 2018).
Argentine entities part of multinational groups but which are not obliged to act as reporting entities before AFIP should inform AFIP that the ultimate parent entity of the group has filed the report in its country of residence. This information must be filed no later than 2 months after the deadline for the filing of the country by country report (i.e., for ultimate parent entity’s fiscal years beginning on January 1, 2017, the information must be filed in February, 2019).
2. Argentine entities which are part of multinational enterprises
This regime applies to all Argentine entities which are part of a multinational group.
Such entities are obliged to provide to AFIP certain information referred to the ultimate parent entity of the group, including name, tax ID, kind of entity, address, place and date of incorporation, jurisdiction of tax residence, date of fiscal year end, amount of total consolidated revenue of the preceding fiscal year, and if the group is obliged to file the country by country report.
The regime is applicable for fiscal years beginning on or after January 1, 2017, and the information must be filed no later than 3 months after the last day of the fiscal year-end of the ultimate parent entity of the group (i.e., for ultimate parent entity’s fiscal years beginning on January 1, 2017, the information must be filed in March, 2018).
Failure to comply with any of the information regimes is subject to fines, suspension of exclusion from tax registries and certain benefits, and face a higher risk of tax audits.