An increasingly cautious Administration

By Joint Resolution of the Ministry of Economy and Public Finance and the Ministry of Foreign Affairs, International Trade and Religion No. 56-80/2011 (hereinafter the “RC 56-80/2011”) the Comisión Evaluadora y Revisora de Convenios para Evitar la Doble Imposición has been created to take responsibility for analyzing existing and proposed international tax treaties (hereafter the “Commission”).

Double tax treaties (hereafter referred to as “DTTs”) are bilateral treaties designed to eliminate or mitigate the conflict produced by the superposition of taxes in the case of international operations.

Despite the lack of an active role played by Argentina in the signing of new DTTs since some time ago, certain serious disputes have arisen from the treaties in force which triggered the termination of the DTT signed with Austria.

According to RC 56-80/2011, the Commission will consider the following aspects of existing DTTs:

1. The impact on federal taxation.
2. The appropriate and effective relationship between fiscal sacrifice and the objectives pursued.
3. The probability of improper taxation due to abuse of DTTs.
4. The probability of double non-taxation under the domestic law of the other party.

To summarize, the Public Administration is showing a more alert attitude to abuses and seems to be making an effort to consider new drafts of DTTs which promote economic transactions with Argentina and thus increase the movement of capital.