Nidera S.A. exported commodities (cereals, oilseeds etc.) via group traders domiciled on the British Virgin Islands.
In the absence of evidence to the contrary, in transactions involving entities domiciled in low-tax jurisdictions, it was presumed that prices had not been agreed in accordance with the arm’s length principle.
The tax authorities issued an adjustment by applying the “CUP” method (Sixth method), considering the statistical average prices set as a reference value by the National Secretariat of Agriculture, Livestock and Fisheries, corresponding to the date of shipment (and not to the date of agreement as claimed by the claimant).
However adjustments were only made to those transactions where the quoted price was higher than the one agreed by Nidera S.A.
Judgement of the Court
The National Court accepted Nidera S.A.’s appeal in regards to the approach of the tax authorities were only the unfavorable pricing were being adjusted whereas the favorable pricing were not, and referred the case back to the lower court.
In all other regards the appeal of Nidera S.A. was dismissed and the assessment upheld.
ARGENTINA vs Nidera FALLO CAF 038801_2013_CS001