Bloomberg Transfer Pricing Forum. April 2021 Edition

Analysis of General Resolution 4717: The New Transfer Pricing Framework

This report, published in Bloomberg's Transfer Pricing Forum, reviews the main technical developments that marked 2020 and projects the scenario for 2021 in Argentina. Specialists from Rosso Alba & Rougès highlight seven critical aspects of GR 4717:

• Tested Party: It is established as a general rule that the tested party is the Argentine affiliate, with specific exceptions for profit split methods.

  
  

• Business Restructurings: The tax consequences of moving functions, assets, or risks out of the country are regulated in detail, requiring arm's length remuneration for such transfers.

  
  

• Triangular Transactions and Intermediaries: Strict rules are imposed to prove the substance of foreign intermediaries who do not take physical possession of goods, requiring certified financial statements and detailed functional analyses.

  
  

• Intra-group Services: A "benefit test" is introduced, where the taxpayer must demonstrate that the value obtained from the service outweighs the price paid to allow its deductibility.

  
  

• COVID-19 Impact: The analysis addresses the need for extraordinary loss adjustments resulting from the pandemic and permanent establishment risks due to reduced employee mobility.

  
  

• Technical Documentation: New requirements for the Local Report, Master File, and form F. 2668 are explained, which increase the compliance burden for companies.

  
  

The article also examines material court cases concerning commodity exports and the re-characterization of debt to equity by the tax authority.