Transfer pricing and aggressive tax planning

February 21, 2022

At the beginning of the year, the OECD published new transfer pricing guidelines to pursue aggressive tax planning by multinational companies trying to relocate profits to jurisdictions with low or no taxation.

In this regard, the AFIP (Administración Federal de Ingresos Públicos – Federal Administration of Public Revenues (AFIP) has new international guidelines that promote a fairer, more equitable, and transparent tax system. These transfer pricing rules apply to taxpayers that carry out transactions with related parties and provide that the benefit is calculated according to the arm’s length principle.

Among the changes presented is the new Chapter X on the transfer pricing aspects of financial transactions. Therein, examples are given, the treatments to be applied on risk-free and risk-adjusted interest rates are clarified.

Another change aims to clarify when the transactional profit split method is the most appropriate system to apply. It also replaces Annex II of Chapter II with examples to exemplify the guidance on the transactional profit splitting method.

In addition, the change in the valuation of intangibles and its impact on tax results is presented. These modifications are intended to assist tax administrations in defining the treatment of intangibles under BEPS Action 8.


Refers to tax planning strategies used that, while respecting transfer pricing, take advantage of existing discrepancies and inconsistencies between national tax systems by artificially shifting profits to low- or no-tax locations, where the firm has little or no economic activity.

Therefore, the transfer rules are complemented by the BEPS action plan to counteract multinational companies shifting the income of group companies to countries with lower tax costs.

Source: Bae Negocios 16/02/22