The tax authorities had recharacterized debt to equity and disallowed deductions for interest payments etc.
Decision of the Supreme Court
The Court decided in favour of Transportadora de Energía SA and set aside the debt to equity re-characterisation. The court also points to the relevance of transfer pricing studies. The Court noted that the tax authorities had failed to properly review the transfer pricing documentation and benchmarking of the intra-group financing for transfer pricing purposes, and on that basis set aside the assessment.
Argentina 26 dec 2FALLO CAF 039109_2014_3_RH002