Argentina Ratifies OECD – BEPS Multilateral Instrument 

Law 27788 was published in the Argentine Official Gazette on May 28, 2025, to ratify the OECD – BEPS Multilateral Instrument (MLI). By approving it, Argentina positions itself in a global framework which strives for tax systems’ modernization and toughens the fight against aggressive tax planification. Law 27788 could thus have an impact on corporate structures, business models, and transnational transactions. 

What is the MLI and how does it work?

Within the BEPS Action Plan framework, pushed by the Organization for Economic Co-operation and Development (OECD) and the G20 group, the Instrument was approved in France on November 24, 2016. Argentina signed it on June 7, 2017. 

The Instrument allows member states to amend double taxation conventions in force without needing to re-negotiate every convention bilaterally. In broad terms, states will be able to introduce anti-abuse clauses, address artificial avoidance of permanent establishment status, and improve dispute resolution among states as is shown below: 

Which are the implications of the MLI?

•    Prevention of treaty abuse: The main anti-abuse clause is the Principal Purpose Test (PPT), which keeps abusive corporations or transactions from accessing the convention’s benefits. In addition to the PPT, the MLI allows member states to choose one extra benefit-limit rule, known as the Simplified Limitation on Benefits (S-LOB). This clause limits the access to the convention’s benefits specifically to “qualified residents,” such as humans, states, political subdivisions, and others. 
•    Redefinition of permanent establishment: the MLI introduces changes to the definition of “permanent establishment” to address artificial corporate structures whose goal is to avoid taxation. 
•    More regulation to dividends: the reduced tax rates will depend on shareholding level and time. 
•    New rules regarding transparency and dual residency. 
•    Tax dispute resolution: the Instrument establishes new minimum standards for dispute resolution and arbitration, which brings more legal certainty. 
•    Specific procedures to solve interpretation doubts and implementation: If difficulties arise regarding the interpretation or application of a tax agreement, the contracting parties will have to solve them through the dispute resolution mechanisms established in the Multilateral Instrument (such as conciliation), without discarding the MLI’s own arbitration process. However, a Conference of the Parties may be convened by member states when the doubts refer to the interpretation or implementation of the Instrument. 

Which tax conventions does the MLI modify?

The Instrument shall only apply to Double Tax Conventions in which each State designated the other as “covered convention” and agreed upon which specific dispositions to apply. In this way, the effective application of each agreement will depend on the specific situation of each Member State. 

When does the MLI enter into force?

The Instrument will enter into force the first day of the month following the expiration of a three-month period beginning on the date the instrument of ratification is deposited, accepted, or approved. The effective application may vary depending on the type of taxation: 
-    Regarding taxes withheld at source (dividends, interests, and royalties): for these, the MLI will become enforceable on January 1 of the next year after the latest of the dates on which the MLI enters into force for each of the contracting jurisdictions to the Covered Tax Agreement.

If Argentina were to deposit its ratification before the end of October, 2025, the MLI would enter into force on February 1st, 2026 (assuming that this is the most recent date of entry into force of the MLI between two jurisdictions), affecting all taxes withheld from January 1, 2027.

-    Regarding all other taxes: for these, the MLI will become enforceable at the start of the taxable periods beginning on or after the expiration of a period of six calendar months (or a shorter period, if convened) from the latest of the dates on which this Instrument enters into force for each of the contracting jurisdictions to the Covered Tax Agreement.

If Argentina were to deposit its ratification before the end of October, 2025, the MLI would enter into force on February 1, 2026 (assuming that this is the most recent date of entry into force of the MLI between two jurisdictions), affecting tax periods beginning in August 2026.