The Income Tax Law ("LIG") in its Art. 17 establishes the methods that may be applied for the analysis of transfer prices. Such methods are also detailed in Art. 29 of Regulatory Decree 862/2019 ("DR 862").
The LIG establishes that for the purpose of determining the prices of the transactions covered by the transfer pricing regime, the most appropriate methods according to the type of transaction analyzed must be used.
In this regard, the methods established by the Argentine regulations are detailed below:
Comparable uncontrolled price method
Resale price method
Costs plus method
Profit split
Transactional net margin method.
These methods are also in line with those established in the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations of the Organization for Economic Cooperation and Development ("OECD Guidelines").
Additionally, the Argentine regulations incorporate the possibility of using "Other methods" for those transactions that involve the transfer of valuable and unique intangible assets or financial assets that do not present comparable transactions with or between independent parties, or the investment in unique assets that do not present comparable and whose activation only produces mediate results through the amortization of such assets, as long as due to the nature and characteristics of the activities the application of any of the previously mentioned methods is not appropriate.
It is important to take into account that, in accordance with the provisions of Article 34 of RG 4717, the use of other methods and techniques of justification must be reported through the "Digital Filings" service by entering the AFIP institutional website with a tax code, under the terms of General Resolution No. 4503, within the fifth month after the end of the fiscal year.
For further details of each of the transfer pricing methods, we invite you to review our profile on LinkedIn and Instagram where you can find the description of each of them
https://www.linkedin.com/company/mcconsultor%C3%ADa/?viewAsMember=true
https://www.instagram.com/mcconsultoria.tp/?hl=es
If you have any doubts, questions and/or concerns, please do not hesitate to contact us, we are here to help you in all matters related to transfer pricing.
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