Transfer Pricicing International in South America

transfer pricing in the case of Argentina when the case is FX

Taking into account that FX gains or losses generated have their origin in credits and debts, principally between related parties, it is extremely important to analyse those transactions to determine whether they have been made acting as non-related parties.

Although we do not know of any local precedent related to this subject, the analysis of transfer pricing is oriented to determine whether the interest rates related to a credit/debt of an Argentine resident company fulfil the arm's length principle.
On this subject, the tax authority may inquire not only about the computed interest, but the FX losses related to the interest and the principal, if it considers the rate agreed higher than a market rate, in the case of a loan