The Latin American country’s government accused Procter & Gamble of tax evasion.
Argentine authorities this Sunday accused Procter & Gamble of tax fraud and suspended its operations in the country.
The government of the South American country suspended domestic operations for the transnational company Procter & Gamble for fiscal fraud and capital flight in import operations from Brazil for US$138 million that were being billed through a Swiss subsidiary.
The Argentina Tax Bureau (AFIP) stated that the alleged operations allowed for currency to leave the country and to reduce its tax payments.
“Our main goal is for P&G to return the dollars taken out of the country to the central bank and to pay customs penalties and the income tax that was evaded by manipulating transfer prices,” Ricardo Echegaray, the chief tax collector said in the statement.
Procter & Gamble has been conducting business in Argentina since 1991 and currently manages three manufacturing plants and two distribution centers.
Meanwhile, Argentine President Cristina Fernandez has been enhancing efforts to fight against tax evasion and capital flight to boost tax collections.
Last week, Argentina was among 51 countries to sign an agreement to automatically share tax information as part of an OECD and G20 initiative to tackle tax evasion.
Argentina made up the group of 48 nations who pledged to launch their first information exchanges by September 2017, with the three remaining countries on the list expected to follow in 2018.
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