AFIP Offices (photo: Beatrice Murch)
In a press statement, AFIP said that it had inspected more than 2,600 operations and detected that the company had exaggerated its import bill for products from Brazil by US$138m. According to AFIP the company allegedly billed for the goods using an affiliate in Switzerland, thereby avoiding taxes in Argentina. It also found US$19m worth of discrepancies in the company’s import tax declaration.
The tax office said it had suspended P&G’s unique tax code and license to import and export as a “preventative” measure. It also requested that the judiciary prevent the company’s Argentine directors from leaving the country until the situation is resolved.
“We have to end these tricks by global companies, which imply malicious tax planning in foreign trade operations,” said AFIP head Ricardo Echegaray. “Global companies cannot manage their profits by cheating the state, evading taxes and sending capital abroad. This irregular conduct impedes the development of the nation, denying its citizens resources for public services, health, education, justice, transport, pensions, and other social investments.”
P&G responded in a statement last night: “We take complying with Argentine laws very serious, as we do in every country we operate in. We do not pursue aggressive nor questionable tax/fiscal practices, which do not produce sustainable results; P&G pays all of its taxes, in Argentina and across the world.”
The company, which owns brands such as Gillette, Duracell, Pantene y Pampers, added that it was working with local authorities to find an “immediate solution” and continue to supply the Argentine market with its products.
According to its own company profile, P&G conducts business in 80 countries worldwide, and has been operating in Argentina since 1991.
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