Argentina publishes new transfer pricing documentation requirements for Country-by-Country reporting

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1 28 September 2017 Global Tax Alert News from Americas Tax Center and Transfer Pricing Argentina publishes new transfer pricing documentation requirements for Country-by-Country reporting EY Global Tax Alert Library The EY Americas Tax Center brings together the experience and perspectives of over 10,000 tax professionals across the region to help clients address administrative, legislative and regulatory opportunities and challenges in the 33 countries that comprise the Americas region of the global EY organization. Copy into your web browser: Tax/Americas-Tax-Center---borderlessclient-service Executive summary On 20 September 2017, Argentina published General Resolution No E in the Official Gazette, which adds requirements for the Country-by-Country (CbC) report under the transfer pricing regulations. The resolution establishes an annual information regime, which consists of filing a CbC report prepared by constituent entities of a multinational enterprise (MNE) group under Organisation for Economic Co-operation and Development Base Erosion and Profit Shifting Action 13. The regime is effective 20 September 2017, and applies to each ultimate parent entity (UPE) of an MNE group for the fiscal year starting on or after 1 January Constituent entities must file the CbC report no later than the last business day of the 12th month following the ending of the reporting fiscal year of the MNE group s UPE. Detailed discussion Liable parties Constituent entities residing in Argentina that belong to an MNE group must file a CbC report in any of the following cases:

2 2 Global Tax Alert Americas Tax Center 1. The constituent entity is the UPE of the MNE group. 2. The constituent entity is appointed as a surrogate parent entity (SPE) by the UPE of the MNE group. 3. The constituent entity does not fall within points (1) and (2), but any of the following circumstances apply: a. The UPE is not required to file the CbC report in its tax jurisdiction. b. As of the due date for filing the CbC report, the jurisdiction in which the UPE is resident for tax purposes does not have a qualifying competent authority agreement to which Argentina is a party, even though both jurisdictions have an international agreement in effect. c. There has been systemic failure by the jurisdiction in which the UPE is resident for tax purposes. The Argentine tax authorities will publish on their website a list of the jurisdictions that do not have a qualifying competent authority agreement and those that have systemic failure. The resolution exempts an MNE group from the CbC reporting requirement if the MNE group has total consolidated revenues of less than 750 million or its equivalent amount converted into the local currency of the jurisdiction in which the UPE is tax resident at the exchange rate effective as of 31 January The resolution also exempts Argentine constituent entities that belong to a MNE group from the reporting requirement if the CbC report has been filed by an SPE not residing in Argentina with the tax authorities of its own tax jurisdiction, provided that such jurisdiction: a) Has established a regime for filing the CbC report b) Has a qualifying competent authority agreement to which Argentina is a party in place as of the date established for filing the report c) Has not notified Argentina of a systemic failure d) Has been notified by the SPE that it has been appointed to file the CbC report These lists on the tax authorities website also apply to points (b) and (c). Information to be provided on the CbC report The reporting entity must include on the CbC report for each jurisdiction in which the MNE group operates: The total amount of group revenue broken down by revenue from related companies and independent companies Income (loss) before income tax or other taxes of a similar nature Income tax paid or other taxes of a similar nature paid, including the related withholdings Current-year income tax accrued or other taxes of a similar nature accrued Declared equity Accumulated earnings Number of employees Tangible assets other than cash or cash equivalents For each constituent entity belonging to the MNE group, the reporting entity must report the: CUIT (Argentine taxpayer identification number) or NIF (tax identification number) in the country of residence for foreign entities Tax jurisdiction and country of organization, when applicable Main activities and description of those activities The reporting entity also should include any other information deemed relevant, as well as an explanation of the data included in the information to facilitate its comprehension. CbC reports must be filed electronically on the tax authorities website. Notifications about UPEs and reporting entities Constituent entities residing in Argentina must notify Argentina s tax competent authority of the following information by the last business day of the third month following the UPE s fiscal year-end. Argentine constituent entities must notify Argentina s tax competent authority about the following information regarding the UPE: CUIT (Argentine tax identification number), CIE (foreign investor identification number) or NIF (tax identification number) in its country of residence Type of company Tax and legal address Place and date of organization

3 Global Tax Alert Americas Tax Center 3 Tax jurisdiction Date of fiscal year-end Amount of total consolidated revenues disclosed in the consolidated financial statements for the fiscal year preceding the reporting fiscal year An Argentine constituent entity also must notify Argentina s tax competent authority about whether the MNE group must comply with this information regime and whether the Argentine constituent entity must act as a reporting entity for the MNE group. An Argentine constituent entity must notify Argentina s tax competent authority of the following information about the reporting entity, if it is not the UPE (regardless of whether the reporting entity resides in Argentina): CUIT (Argentine tax identification number), CIE (foreign investor identification number) or NIF (tax identification number) in the country of residence Type of company Tax and legal address Place and date of organization Tax jurisdiction Date of fiscal year-end Additionally, an Argentine constituent entity must notify Argentina s tax competent authority about whether the reporting entity is filing the CbC report as: (1) an SPE appointed by the UPE or (2) a member company. Finally, an Argentine constituent entity must notify the tax authorities of the actual filing of the CbC report by the last business day of the second month after the due date for filing the CbC report in the corresponding jurisdiction. The prior requirement is also needed to report the existence of the SPE. The Argentine constituent entity, however, is responsible for all other information reporting obligations. An Argentine constituent entity must file this information electronically through the tax authorities website. Penalties Failing to comply with the obligations set forth in this resolution will give rise to the penalties established by Law No. 11,683. Moreover, the liable parties may be subject to any of the following measures: a) Being classified as a company subject to greater risk of undergoing an audit b) Suspension or removal from the special tax registries c) Suspension of the process of obtaining an exemption or non-withholding certificates

4 4 Global Tax Alert Americas Tax Center For additional information with respect to this Alert, please contact the following: Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires Carlos Casanovas Gustavo Scravaglieri Ariel Becher Pablo Baroffio Darío Corrente Juan Manuel Iglesias Milton González Malla Esteban Kacanas Manuel Val Lema Mariano Rodríguez Morán Ernst & Young LLP, Latin American Business Center, New York Pablo Wejcman Ana Mingramm Enrique Perez Grovas Ernst & Young LLP (United Kingdom), Latin American Business Center, London Jose Padilla

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