Said rule establishes that such subjects will attribute 20% of their income to the jurisdiction in which their administrative headquarters is located, and the remaining 80% to the jurisdiction in which the goods being marketed are located.
Topics under consideration
The themasdecidendums that the CM implementation bodies – Arbitration and Plenary Commission – had to resolve focused on:
- How 20% and 80% of the income are attributed in cases where the jurisdiction of the administrative headquarters coincides with that in which the assets are located.
- To which jurisdiction is 80% of the income attributed, if it is to: 1.- Jurisdiction where the service provided by the intermediary is used economically? 2.- Jurisdiction where the goods are stored?
It should be considered that the aforementioned intermediaries can participate in both purchases and sales of goods. Regarding purchasing operations, the principal instructs them to acquire goods in his name (the principal) or in his own name (the intermediary), but on behalf and by order of the principal (the principal).
Regarding sales, the principal instructs them to sell goods in his name (of the principal) or in his own name (of the intermediary), but on behalf of and by order of the principal (of the principal).
Various situations
- Cases in which the jurisdiction of the administrative headquarters coincides with the jurisdiction of the place where the assets are located.
This situation arose in the “specific case” of Deheza SA (1) in which it acted as an intermediary for Shell, marketing fuel at its service stations, in its own name, but on behalf of and at the order of the oil company.
Periodically, it issued a liquid product to Shell detailing the liters and types of fuel sold, deducting its commission and transferring the remaining funds.
Deheza had two service stations, one in the Province of Buenos Aires (PBA) and the other in the Autonomous City of Buenos Aires (CABA); For the sales of the first, he attributed 20% to CABA instead of the headquarters and 80% to PBA; while on the other hand, 20% went to CABA – the place of the headquarters – and the remaining 80% also went to CABA because the marketed goods were located there.
The application of this criterion was reproduced in other “specific cases” resolved by the Arbitration Commission (CA) and Plenary Commission (CP), including the following resolutions of CEPAS ARGENTINA SA (2) inclusive, in which it was considered that the same criteria were maintained. characteristics than in Deheza, although with the contrary vote of other jurisdictions, such as that of Tierra del Fuego – among others -.
Although the CA resolved in the first “CEPAS” cases with the same criteria as in “Deheza”, the factual situation was totally different and therefore the CP resolved in the “second CEPAS case”(3) with a different criterion considering that in The cases in which both jurisdictions coincide (20% and 80%) correspond to the general regime of the CM.
Already in the GobbiNovag SA case (4) it was the CA itself that considered the general regime applicable, a criterion that was maintained in the resolutions of the specific cases CP No. 9/2020 (5), CA No. 3/2023 (6) and CP No. 8/2024 (7).
In effect, the change in criteria is applied only in cases in which the jurisdiction of the headquarters physically coincides with that in which the marketed good is located, given that in such cases the objective condition provided for in the aforementioned is not met. Article 11 of the CM that requires the existence of two jurisdictions.
Both CM enforcement agencies – both the CA and the CP – maintained criterion (8) envisioned from the second case “Cepas Argentina SA” defining that in such operations the income obtained from said intermediation must be attributed to the different jurisdictions as established. establishes the general regime of the CM.
That is, in the head of the same taxpayer – intermediaries – there may be operations whose income must be attributed in accordance with article 11 and others in accordance with the general regime.
- Operations in which article 11 of the CM applies. To which jurisdiction is 80% attributed? Jurisdiction where the service provided by the intermediary is used economically?
The activity carried out by the subjects included in article 11 of the CM – “auctioneers, commission agents or other intermediaries” – is considered a provision of services that is normally remunerated based on a percentage applied to the amounts of sales or purchases, as appropriate.
As established by RG No. 14/2017 (9) of the CA, the income from the provision of services is attributed to the jurisdiction in which the service was actually provided, which coincides with the one in which it is used economically and where the income comes from.
In the exercise of its intermediation function, the agent intervenes to commercially unite the needs of the seller and the buyer, carrying out marketing management, market analysis, sales, deliveries, collections and customer service, generating an income in their favor that comes from of the jurisdiction in which its service was economically used.
If the principal entrusts the intermediary with the purchase of a good, said operation is carried out when it complies with the entrusted management and makes the acquired good available in the indicated jurisdiction, while, in the case of sales management, the provision of the service is specific when making the sale and/or collection in the buyer’s jurisdiction.
In this context, the intermediary provided the service to the principal in the jurisdiction in which the service was actually provided, or where the service was economically used, which is the jurisdiction in which the operation was carried out.
- To which jurisdiction is 80% attributed? Jurisdiction where the goods are stored?
In the cases resolved after Deheza, the CA decided to attribute 80% of the income to the jurisdiction where the goods were located at the time of sale, which coincided with the jurisdiction in which the goods were stored.
This criterion is not the most reasonable because as long as the assets maintain that condition, the NHI is not generated, which is why it is not appropriate to resort to said attribution criterion.
Precisely, the terms used by the CM when he expresses: “…the jurisdiction where the assets are located may tax 80% of the gross income generated by those operations…” (the highlighted one belongs to me) refer to the jurisdiction where the assets are located at the time the operation is carried out, which is why it expressly says“…the gross income generated by those operations…”referring to sales operations.
Conclusion.
Although the result of this specific case (10) follows the criteria of those resolved since 2016, I consider that it would be appropriate the issuance of an interpretative rule that resolves the treatment that should be applied for cases in which the jurisdictions to which 20% and 80% should be attributed coincide, and some dissidence is observed within the enforcement agencies regarding the case raised.
Public accountant. Partner of Tax&Legal Business Advice SRL
(1) CA, Resolution No. 27/2001, Deheza SA
(2)CA, Resolution No. 26/2016, Cepas Argentinas SA c/Pcia. of Bs. AS., CP, Resolution No. 5/2017, Cepas Argentina SA c/Pcia. of Bs. As., CA, Resolutions No. 44/2017, Cepas Argentina SA c/Pcia. from Bs. As.
(3) CP, Resolution No. 26/2018, Cepas Argentina SA v. Pica. From Bs. As., 11/8/2016.
(4) CA, Resolution No. 25/2019, GobbiNovag SA c/Pcia. from Bs. As.
(5) CP, Resolution No. 9/2020, GobbiNovag SA c/Pcia. from Bs. As.
(6) CA, Resolution No. 3/2023, GobbiNovag SA c/Pcia. from Bs. As.
(7) CP, Resolution No. 8/2024, GobbiNovag SA c/Pcia. from Bs. As.
(8) CA, Resolution No. 28/2023, Cooperativa Defensa de Agricultores Ltada. c/Pcia. from Bs. As.
(9) BO 10/11/2017
(10) CP, Resolution No. 8/2024, GobbiNovag SA c/Pcia. from Bs. As.
Source: Ambito
