A millionaire tax adjustment case occurred in Argentina after the AFIP (Administración Federal de Ingresos Públicos – Federal Administration of Public Revenues) audited the transactions and determined a tax Transfer Pricing adjustment for a company in the agro-industrial chain in the province of Córdoba.
The company would have carried out transactions with entities located in non-cooperating jurisdictions, free zones, and countries with low or no taxation at prices lower than those agreed between independent parties.
The Dirección General Impositiva (Tax Revenue Agency of Argentina), in charge of Carlos Castagneto, audited the transactions carried out by this company with related ones from abroad during the fiscal period 2018.
Transfer Pricing Adjustment
Due to this audit process, it was determined that this company exported at prices lower than those agreed between independent parties, thus, determining a Transfer Pricing adjustment.
Likewise, the interest lost on received loans from a related entity for pre-financing exports with an interest rate higher than that of the independent comparables was added.
The audited company filed an amended income tax affidavit, increasing its net taxable income by $120 million.
Other Evasion Cases with Grain
The DGI carried out transactions in storage facilities in the Buenos Aires locations of Tres Arroyos and De la Garma that did not have the corresponding documentation evidencing the entry of the products, detecting a transaction with an exporting firm that reported a lower stock than the real one.