Argentina's tax agency on Monday broadened a crack-down on what it says is rampant tax evasion by multi-national grain exporters, suspending three more companies from a key grain trading registry.
In a press release, the agency, Afip, said it has suspended Louis Dreyfus, Bunge Argentina and Oleaginosa Moreno from the registry for evading taxes by triangulating their grain trading operations through other countries, among other measures.
Exclusion from the registry will cause the income tax withheld on domestic grain trades to rise from 2% to 15% and the imposition of a 10.5% sales tax, Afip said. The affected firms will also have limits imposed on the number of permits they can obtain from Afip for domestic shipping.
Representatives of the three companies declined to comment, but international grain exporters complain that they are being singled out by Afip.
Earlier this month, Afip suspended units of Cargill Inc., Archer Daniels Midland Corp. (ADM) and Toepfer International GmbHp from the registry for similar reasons.
Afip agents also raided 117 offices of 48 different exporters on the suspicion that they had created phantom companies to hide grain sales. The companies quickly denied any wrongdoing.
"It is totally false and unfounded to think that the so-called 'phantom companies' could be linked or created by or associated with exporters," the grain and oilseed export chamber Ciara-Cec said Mar. 2 in a press release.
The government of President Cristina Fernandez has turned up the heat on grain exporters, who the administration says have evaded hundreds of millions of dollars in taxes in recent years.
Last year, Afip accused four of the country's 10 largest grain exporters of using shell companies in neighboring Uruguay for accounting purposes that left minimal profits on the books of their Argentine units.
At the time, Bunge issued a blunt statement saying the government had pressured the grain exporters to make advanced income tax payments for 2011 or face "serious problems for the companies and their directors."
Agriculture exports were largely responsible for Argentina's $12.06 billion trade surplus last year, while taxes on farm exports accounted for a significant percentage of the federal government's tax revenue. Argentina is the world leader in soymeal and soyoil exports, ranks No. 2 in corn exports, and third in soybeans.
Cargill Inc. is the leading exporter of grains in Argentina by volume, followed by Bunge Ltd. (BG), Archer Daniels Midland Corp., Louis Dreyfus Commodities, Nidera Handelscompagnie B.V., Toepfer International, the Argentine Cooperative Association, Noble Group Ltd. (N21.SG), Aceitera General Deheza SA and Oleaginosa Moreno SA.
