Double Tax Treaty with France Updated

Law 27814, published in the Official Gazette on July 17, 2026, approves the Amendment Protocol to the Double Tax Treaty between Argentina and France. The Protocol was signed on December 6, 2019, and amends the Treaty entered into on April 4, 1979, as amended by the protocol dated August 15, 2001. This is the second amendment to the Treaty, and its main purpose is to reduce the tax limits applicable to passive income and capital gains.

The main changes the Protocol introduces are:
 

1. Permanent establishment. The definition of permanent establishment is updated to include construction sites or installation projects lasting more than six months, as well as the provision of services, including consulting services, when performed in connection with the same project or a connected project for more than 183 days within a 12-month period.
2. Dividends. The withholding tax limit is reduced from 15% to 10% when the beneficial owner is a company that directly holds at least 25% of the capital of the company paying the dividends for a 365-day period. In all other cases, the 15% limit remains unchanged.
3. Interest. The general source taxation limit is reduced from 20% to 12%, provided that the recipient is the beneficial owner of the interest. The Protocol also includes cases of exclusive taxation in the State of residence for certain interest connected, among others, with States, public entities, or central banks, loans or credits guaranteed or subsidized by a State, financed sales of industrial, commercial or scientific equipment, and loans granted on preferential terms.
4. Royalties. The single 18% limit is replaced by a structure of different rates: 3% for payments for the use of—or the right to use—international news; 5% for certain copyrights on literary, artistic or scientific works; and 10% for all other cases.
5. Capital gains. A specific rule is introduced for the sale of shares, rights or interests whose value derives, directly or indirectly, by more than 50% from immovable property located in the other State at any time during the 365 days preceding the sale. In these cases, the gains may be taxed in the State where such immovable property is located. For these purposes, immovable property used in the entity’s own business activity will not be considered.

For other sales of shares or interests representing the capital of a company resident in the other State, source taxation is limited to 10% of the gain when the seller holds at least 25% of the capital, and to 15% in all other cases.
 

6. Most favored nation clause.  Under the new wording of this clause, if Argentina agrees with another State, after December 6, 2019, to a lower tax rate or a more favorable treatment than the one provided for dividends, interest, royalties, gains from the sale of interests, permanent establishments for the provision of services or independent personal services, such treatment will apply to the bilateral relationship with France under the same conditions set out in that agreement.
7. Entry into force. Although France already approved the Protocol internally in 2022 and Argentina completed its internal procedure by publishing Law 27814, the Protocol will not enter into force immediately. For this purpose, both States must notify each other through diplomatic channels that their respective internal procedures have been completed. The Protocol will enter into force 30 days after the last diplomatic notification between both States and will apply as of January 1 of the following calendar year for withholding taxes on payments made as of that date and for other taxes on income and capital for fiscal years beginning as of that date.