Argentina and Brazil’s Treaty to Avoid Double Taxation: Amendment

I. Introduction

In 1980, the Argentine Republic (“Argentina”) and the Federal Republic of Brazil (“Brazil”) signed a Treaty to Avoid Double Taxation and Avoid Tax Evasion (the Treaty), specifically regarding Income Tax and the Tax on prospective and analog benefits of Brazil that were then in force.

As time went by and commercial developments followed, a need arose to update the rules included in the Treaty in the light of a new international context and, in particular, to standardize the different treaties executed by Argentina. Therefore, a Protocol to the Treaty was signed by the Foreign and Finance Ministers at the Mercosur Summit held in Mendoza on July 21, 2017.

The Protocol was passed into law by the Argentine Congress on May 9, 2018 and published in the Official Gazette on May 23, 2018.

II. Main amendments

The main changes were related to the scope of the text, permanent establishments, contracting state, dividends, interest, royalties, double taxation avoidance mechanism and limitation to benefits. For more information see Amendment to Argentina and Brazil’s Treaty to Avoid Double Taxation.

III. Effective date

The Protocol will enter into force 30 days after the last notification of the approval of the protocol, on the taxable events as of January 1, of the following calendar year.