ARGENTINA Law and Practice Contributed by: Daniel Rinci, Tomas Cabanelas, Fernando García and Marisa Majul, Rinci & Asociados
2. Territoriality, Residence and Permanent Establishment
1.3 OECD Model/United Nations Influence on Treaty Practice Argentina is not an OECD member, though it partici - pates in the OECD’s Base Erosion and Profit Shifting (BEPS) Inclusive Framework. Argentina’s treaty prac - tice draws on both the OECD Model Tax Convention and the UN Model Double Taxation Convention, with a general preference for the latter given its greater source-state taxation orientation – consistent with Argentina’s position as a capital-importing country. Notable deviations from the OECD Model include broader definitions of royalties and expanded source- state taxing rights over technical services fees (which Argentina historically treats as royalties or similar remuneration subject to withholding). Argentina has generally resisted the OECD’s narrower interpretation of the permanent establishment (PE) concept and has maintained source-based taxing rights in line with UN Model preferences. Argentina’s domestic law also imposes withholding taxes on certain payments to non-residents that may not align with treaty-reduced rates, unless the tax - payer actively invokes the applicable convention and complies with its local regulations. 1.4 Multilateral Instrument Argentina signed the OECD Multilateral Convention to Implement Tax Treaty-Related Measures to Pre - vent Base Erosion and Profit Shifting (the “Multilateral Instrument” or MLI). It has been ratified and it came into force on 1 January 2026. Argentina has opted into the MLI’s provisions on hybrid mismatch arrangements, treaty abuse (adopt - ing the Principal Purpose Test as its minimum stand - ard for satisfying the BEPS Action 6 requirement), and dispute resolution. It has made reservations on man - datory binding arbitration under Article 18. The MLI is modifying a number of Argentina’s covered tax agree - ments, though the precise treaties affected depend on the matching positions of counterparty states. Tax - payers and practitioners should review the MLI syn - thesised texts for each relevant treaty to determine the applicable rules.
2.1 General Principle of Territorial Taxation Argentina operates a worldwide taxation system for tax residents – both individuals and legal entities – meaning that Argentine tax residents are subject to income tax on income derived from all sources, whether Argentine or foreign. Non-residents, by contrast, are taxed only on Argen - tine-source income. The concept of Argentine-source income is defined broadly in the Income Tax Law to include income from assets located, placed, or used economically in Argentina; income from activities car - ried out in Argentina; and income from acts performed in Argentina, regardless of the nationality or residence of the parties, or the location where contracts were concluded. Certain special regimes apply to income from financial instruments, international transportation, and news agencies, which have their own source rules. There are no special territorial regimes for particular geo - graphic areas within Argentina that would materially alter these principles, though certain provinces and the City of Buenos Aires impose their own provincial- level taxes – turnover tax – with their own territorial rules. 2.2 Tax Residence of Individuals Under the Income Tax Law, individuals are considered Argentine tax residents if they meet any of the follow - ing criteria: • Argentine nationality – Argentine nationals are gen - erally tax residents unless they have acquired for - eign residence status through the effective change of domicile abroad under the conditions specified in the law. • Foreign nationals with permanent residence – foreign nationals who have obtained permanent residence status in Argentina under immigration law are considered tax residents from the date they obtain such status. • Presence test – foreign nationals who remain in Argentina for 12 months during any consecutive 12-month period are also treated as tax residents,
11 CHAMBERS.COM
Powered by FlippingBook