The great grain robbery
Since 2008 the Argentine tax authorities have been using recently signed tax information exchange agreements to cross-check export prices against prices in importing countries. According to senior revenue authorities these checks have revealed systematic false declarations of sales, occasionally involving phantom purchasers located in tax havens; Uruguay, a prominent secrecy jurisdiction in the Southern Cone, seems likely to have featured heavily in this profits shifting role. At the same time inflated costs have been charged to the Argentine exporting subsidiaries to reduce declared profits and/or claim tax credits.
The ABCD four, who dominate global trade in corn, soya and wheat, have vigorously denied any wrongdoing, claiming their actions rest within the letter of Argentine tax laws, but this case could well become a landmark investigation into transfer mispricing and the role of tax havens in corporate tax abuse. One to watch.