Benefits under the new agreement
On the occasion of President Mauricio Macri's visit to Brasilia, on 7 February 2017, Argentina proposed an update to the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion, as regards income tax between Argentina and the Federative Republic of Brazil.
Although the initial goal was to introduce a tax credit mechanism that would alleviate the tax burden on certain service-exporting sectors of the economy, during the negotiations both countries agreed it was advisable to update the agreement on the basis of the recommendations of the BEPS Project (to prevent base erosion and profit shifting) of the G20 and the OECD. In addition, the countries agreed to adjust the provisions of the Convention to international standards on transparency and exchange of information.
Among the main provisions added to the Protocol were those on the amendment of the method to avoid double taxation, the inclusion of estate taxes, the reduction of Government-imposed tax rates on certain sources of passive income, the inclusion of clauses aimed at preventing abuse of the Convention and the exchange of information.
The Additional Protocol was signed by the Foreign Ministers and the Ministers of Treasury at the MERCOSUR Summit held in Mendoza on 21 July, and will enter into force upon the approval of the National Congresses of both countries.
The Additional Protocol will be a modern and effective instrument to promote and facilitate productive and commercial activities, in line with the joint goal to establish better business conditions between the two countries.
Press release No. 295/17
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