Tax Bill Enacted

Tax changes, introduced by Law 19,506, which generally applies as from the tax year 1997, are summarised below.

Deduction of foreign expenses

A new rule regulates the substantiation of expenses incurred in a foreign country and provides that supporting documents issued in that country (which must eventually be translated into Spanish) are valid for this purpose. In the absence of supporting documents, the tax authorities may allow the deduction if they find that the expenses are reasonable and necessary for the taxpayer's business.

Transfer pricing rules

The tax authorities may object to the prices of supplies of goods and services between related parties if the prices do not conform to arm's length standards.