In July 2005 the Federal Tax Authority issued General Resolution 1907/2005. The resolution aimed to combat tax evasion and under-invoicing practices by creating a system for controlling the value of goods through the establishment of 'reference values'.

Reference values are established by the analysis division of the Valuation Technique Bureau of the Argentine Customs Service, based on the information derived from:

  • values declared by other importers for identical or similar goods;
  • public or private databases; or
  • specialised companies.

The inclusion of goods in the reference values regime may be based on any of the following parameters:

  • goods for which the declared value does not match the usual and reasonable prices in the relevant trade or industry;
  • goods for which the declared value does not match the values of identical or similar goods;
  • at the request of chambers, federations or similar intermediate entities;
  • at the request of the Argentine government; or
  • goods for which the values have been previously adjusted by the valuation areas of the Customs Service and which are not yet included in the reference values regime.

At the time of reporting an import, if the importer's declared value for the goods is below the reference value, the goods must pass through the Red Channel in order to clear Customs. This includes a thorough review of the documents and physical inspection of the goods, with resulting delays in the clearance process. Furthermore, clearance will take place only if a bond is previously posted that secures the tax difference between the paid amount and the amount resulting from considering the respective reference value.

Once the bond is posted and the goods have cleared customs, the importer will have 15 days in which justify the declared value. The value reported by the importer may then be adjusted.

Furthermore, General Resolution 1908/2005 of the Administración Federal de Ingresos Públicos (AFIP) (as amended) establishes that imports in which the reported free-on-board value per unit is lower than 95% of the reference value established by the Customs Service, the income tax rate will be raised to 7% for all imported goods not allocated to the importer's own use or consumption (from an original rate of 3% or 6% respectively, depending on whether the importer has the relevant Importers' Data Validation Certificate).

A recent panel of the World Trade Organisation (WTO) has had the chance the analyse a similar system of reference values established by the Colombian authorities.(1) Following the general principles set forth by the panel, it can be argued that the reference value system established by General Resolution 1907/2005 is not WTO-compliant, as the reference values established by the Argentine Customs Service follow none of the valuation methods set forth in the Valuation Agreement of the General Agreement on Tariffs and Trade. Furthermore, the system detailed in the resolution automatically triggers the application of the reference value (and the corresponding disregard of the transaction value) when the declared value is below the reference value.

In a number of cases, the Argentine Fiscal Court has also criticised the way in which the Customs Service determines and applies the reference value system, along similar lines to those set forth in the Colombia panel report.

The reference value system makes importing into Argentina more expensive (by forcing the importer to automatically post a bond whenever the declared value is below an arbitrarily fixed reference value), and hence constitutes a violation of Argentina's obligations as a member of the WTO.

For further information on this topic please contact Esteban P Rópolo at Baker & McKenzie SC by telephone (+54 11 4310 2200), fax (+54 11 4310 2299) or email ([email protected]).


(1) 'Colombia - Indicative Prices and Restrictions on Ports of Entry', complaint brought by Panama against Colombia, Document WT/DS366/R, dated April 27 2009.