Global Tax Alert (News from Americas Tax Center) | 12 November 2013

Argentina updates on new tax treaty developments

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New tax treaty between Argentina and Spain to be voted on by the Argentine Congress

The new tax treaty between Argentina and Spain, which was signed on 11 March 20131 and recently approved by the Spanish Congress, has been given a favorable verdict by the relevant commissions of the Argentine Congress. As a result, the treaty will be voted on in the next sessions.

This new Tax Treaty for the Avoidance of Double Taxation and Prevention of Fiscal Evasion will replace the previous treaty in force until the end of 2012.

In summary, the new tax treaty includes – among other changes in relation to the previous treaty – the elimination of the exemption for Spanish shareholders from the Argentine tax on personal assets, modifications to the exchange of information clause, and the elimination of the most-favored nation clause, which established the automatic application of lower withholding rates if Argentina agreed to lower withholding rates in other treaties with OECD countries. Article 28 of the text of the treaty indicates that once the necessary approvals and steps are completed, the entry into force would take place as from 1 January 2013.

New tax treaty initialed between Argentina and Switzerland

As announced by the Swiss Federal Department of Finance, Argentina and Switzerland have initialed, on 5 November 2013, an Agreement for the Avoidance of Double Taxation for taxes on income and capital, which will replace the previous treaty that was abrogated in 2012. The treaty text it is not available and will not be published until the treaty is signed. However, it has been reported that the new treaty includes most of the clauses provided for in the previous agreement (though the prior exemption for Swiss shareholders from the Argentine tax on personal assets will be eliminated) and that the exchange of information provision is in line with the international standard of transparency and exchange of information for tax purposes.

Once the new treaty has been signed, it will have to be approved by the Swiss Parliament and the Argentine Congress and the instruments of ratification will have to be exchanged before it can enter into force. The exchange of notes of 1950 concerning the taxation of shipping and air transport companies should still apply until the entry into force of the new treaty.

Endnote

1. See EY Global Tax Alert, New Tax Treaty signed between Argentina and Spain, dated 14 March 2013.

For additional information with respect to this Alert, please contact the following:

Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires
  • Carlos Casanovas
    +54 11 4318 1737
    carlos.casanovas@ar.ey.com
  • Gustavo Scravaglieri
    +54 11 4510 2224
    gustavo.scravaglieri@ar.ey.com
  • Ariel Becher
    +54 11 4318 1686
    ariel.becher@ar.ey.com
  • Pablo Baroffio
    +54 11 4510 2271
    pablo.baroffio@ar.ey.com
Ernst & Young LLP, Latin American Business Center, New York
  • Alfredo Alvarez
    +1 212 773 5936
    alfredo.alvarez@ey.com
  • Pablo Wejcman
    +1 212 773 5129
    pablo.wejcman@ey.com
Ernst & Young LLP, Spanish Tax Desk, New York
  • Cristina de la Haba Gordo
    +1 212 773 8692
    cristina.delahabagordo@ey.com
Ernst & Young LLP, Swiss Tax Desk, New York
  • Thomas Semadeni
    +1 212 773 8442
    thomas.semadeni@ey.com
  • Eric Duvoisin
    +1 212 773 3091
    eric.duvoisin@ey.com

EYG no. CM3957