Argentina is adapting its Transfer Pricing and related Information Regimes to international standards, mainly based on the document issued by the Organization for Economic Cooperation and Development (“OECD”) in 2015, which details an exhaustive action plan to prevent base erosion and profit shifting, known as “BEPS”. In this sense, the Federal Administration of Public Revenues (“AFIP”) puts rigor to compliance with General Resolution 4130-E/2017 (“G 4130”), through requirements to taxpayers for lack of compliance with said information regime.
GR 4130 established the following obligations:
1) Information Regime for Argentine entities which are part of a Multinational Group of Entities MGE.
2) Country by Country (CBC) Report filing.
3) Confirmation of the CBC Report filing in other jurisdictions, other than Argentina.
The mentioned obligations are applicable to all the ultimate parent entity of the MGE’s fiscal years beginning 01/01/2017.
1) INFORMATION REGIME FOR ARGENTINE ENTITIES WHICH ARE PART OF MGE
(FORM F.8096) – GR 4130 – SECOND TITLE
Who is obliged to file Form F.8096?
All the Argentine entities that are part of an MGE should comply with this information regime.
An MGE is any group of entities related through the ownership or the direct or indirect control, that is either obliged to prepare consolidated financial statements or would be so obliged if equity interests in any of the enterprises were traded on a public securities exchange, which includes at least 2 (two) or more entities located in different tax jurisdictions, or an entity located in one tax jurisdiction and is subject to tax with respect to the business carried out through a permanent establishment of its property in another jurisdiction.
When a MGE has more than one Argentine entity taking part of it, it could delegate to one of them the filing of this Form (“member entity”).
Content of the Form F.8096
Due date
The form F.8096 could be filed by the last working day of the third month after the ultimate parent entity’s fiscal year to be informed ends. For example, if the ultimate parent entity’s fiscal year end was 12/31/2017, this form could be filed by 03/29/2018.
Sanctions
The failure to file this form or filing it partially, e.g.: without informing which the ultimate parent entity is, would constitute grounds for AFIP to apply the following fines[1]:
- If the total annual consolidated revenues of the MGE, accrued during the previous fiscal year before the one to be informed, is equal to or higher to EUR 750,000,000[2] (seven hundred and fifty million euros): the fine could range between ARS 80,000 (eighty thousand Argentine pesos) and ARS 200,000 (two hundred thousand Argentine pesos)[3].
The mentioned fine would also be applicable if the reporting entity is not informed.
- If the total annual consolidated revenues of the MGE, accrued during the previous fiscal year before the one to be informed, is lower than EUR 750,000,000[4] (seven hundred and fifty million euros): the fine could range between ARS 15,000 (fifteen thousand Argentine pesos) and ARS 70,000 (seventy thousand Argentine pesos)[5].
- CBC REPORT FILING (FORM F.8097) – GR 4130 – FIRST TITLE
Threshold
The MGE with a total consolidated revenue, accrued during the previous fiscal year before the one to be informed, equal to or higher than EUR 750,000,000[6] (seven hundred and fifty million euros) must file the CBC Report.
Who is obliged to file Form F.8097?
The ones that are obliged to file Form F.8097 are listed below:
- The Argentine ultimate parent entity.
- An Argentine surrogate entity, designated by the ultimate parent entity for the filing of the CBC Report on its behalf. The only ones that could act as surrogate entities are:
- Entities which have a shareholders’ equity that is equal to or higher than ARS50,000,000 (fifty million Argentine pesos); or
- Entities which have an operative and/or functional structure in-line with the processes that have to be performed so as to obtain all the information needed to file the CBC Report.
- An Argentine member entity, that is not mentioned above, as long as it complies with at least one of these criterions:
- The ultimate parent company is not obliged to file the CBC Report.
- At the due date established by the AFIP for the filing of this form, the tax jurisdiction where the ultimate parent company is located has not yet signed an agreement of “qualifying competent authority” in which Argentina is part of, even though both tax jurisdictions are parties to an international treaty.
- The tax jurisdiction where the ultimate parent company is located is not complying with the agreement of “qualifying competent authority” signed with Argentina.
When an MGE has more than one Argentine entity taking part in it, it could delegate to one of them the filing of this Form (“member entity”).
When an Argentine entity takes part in more than one MGE that is obliged to file the CBC Report, if the Argentine entity complies with one or more of the criterions listed above, it has to file one Form F.8097 for each one of the MGE it takes part in.
Moreover, if the CBC Report was filed by a non-Argentine surrogate entity designated by the ultimate parent company to do so, with the tax jurisdiction where the surrogate entity is located, the entities mentioned in paragraph c) above, are not obliged to file the Form. F.8097, as long as that tax jurisdiction:
- Has established an information regime for the CBC Report filing, in accordance with the provisions of the GR 4,130.
- Has signed an agreement of “qualifying competent authority” in which Argentina is party to, at the due date established by the AFIP for the filing of this form.
- Is complying with the agreement of “qualifying competent authority” signed with Argentina.
- Has been informed by the surrogated entity that it was designated by the ultimate parent company to file de CBC Report in this tax jurisdiction.
Content of the Form F.8097
[1] Section 192, par. a)i) and par. a)ii) – Law 27,430 (Tax Reform Law), in force since 12/29/2017.
[2] Idem footnote 2.
[3] The fine could range between USD 4,000 and USD 10,000, considering a currency exchange rate of
USD 1 = ARS 20.
[4] Idem footnote 5.
[5] The fine could range between USD 750 and USD 3,500, considering a currency exchange rate of
USD 1 = ARS 20.
[6] Idem footnote 7.
Due date
The form F.8097 could be filed by the last working day on the twelfth month after the ultimate parent company’s fiscal year to be informed ends. For example, if the ultimate parent company’s fiscal year end was 12/31/2017, this form could be filed by 12/31/2018.
Sanctions
The failure to file this form, doing so it after its deadline, filing it partially or submitting information that is incomplete, wrong, or inconsistent, would constitute grounds for AFIP to apply a fine that could range between ARS 600,000 (six hundred thousand Argentine pesos) to ARS 900,000 (nine hundred thousand Argentine pesos).[1]
- CONFIRMATION OF THE CBC REPORT FILING IN OTHER JURISDICTION,
DIFFERENT FROM ARGENTINA
The Argentine entities that take part in an MGE must confirm that the CBC Report was filed in the tax jurisdiction that was informed in Form F.8096.
Due date
This information could be submitted by the last working day of the second month after the due date for the filing of the CBC Report. For example, if the due date operates on 12/31/2018, the Argentine entities could confirm the filing of the Report by 02/28/2019.
Sanctions
Failure to confirm the filing of the CBC Report would constitute grounds for AFIP to apply a fine that could range between ARS 80,000 (eighty thousand Argentine pesos) and ARS 200,000 (two hundred thousand Argentine pesos).[2]
Other Sanctions
Beside the sanctions mentioned in the Annexes, failure to comply with these regulations could result in the application of the following penalties:
Operative Penalties
- The Argentine entities could be included in a higher category of the Risk Perception System (“Sistema de Percepción de Riesgo – SIPER”), governed by the General Resolution 3,985 issued by AFIP, thus it increases the possibility of a tax audit.
- The Argentine entities could be suspended or excluded from the Special Tax Registries (“Registros Especiales Tributarios”) in which they are enrolled.
- The AFIP could suspend the process to obtain Exclusion or Non Withholding Certificates (“Certificados de Exclusión o de No Retención”), in accordance with legislation in-force.
Formal Penalties
The failure to comply with AFIP’s requirements would constitute grounds for AFIP to apply the following fines:
- CBC Report complementary information requirements: the fine could range between ARS180,000 (one hundred eighty thousand Argentine pesos) and ARS 300,000 (three hundred thousand Argentine pesos)[3].
- Form F.8096 and/or F.8097 filing requirements: ARS 200,000 (two hundred thousand Argentine pesos). This fine could be combined with the ones mentioned in the Annexes regarding the forms F.8096 y F.8097.[4]
[1] Section 192, par. b) – Law 27,430 (Tax Reform Law), in force since 12/29/2017. The fine could range between USD 30,000 and USD 45,000, considering a currency exchange rate of USD 1 = ARS 20.
[2] Section 192, par. a) iii) – Law 27,430 (Tax Reform Law), in force since 12/29/2017. The fine could range between USD 4,000 and USD 10,000, considering a currency exchange rate of USD 1 = ARS 20.
[3] Section 192, par. c) – Law 27,430 (Tax Reform Law), in force since 12/29/2017. The fine could range between USD 9,000 and USD 15,000, considering a currency exchange rate of USD 1 = ARS 20.
[4] Section 192, par. d) – Law 27,430 (Tax Reform Law), in force since 12/29/2017. The fine would be USD 10,000, considering a currency exchange rate of USD 1 = ARS 20.