ARGENTINA Law and Practice Contributed by: Sebastián P. Vedoya, Sergio Arbeleche and Dolores Cattaneo, Bruchou & Funes de Rioja
Exemptions The exemption on the sale of Argentine shares applies only to the extent that the foreign benefi - cial owners reside in, and their funds come from, jurisdictions considered as co-operative for tax purposes. Non-cooperative jurisdictions are those listed under Article 24 of the ITL’s imple - menting decree. If the exemption does not apply because the seller resides in a non-cooperative jurisdiction or channelled its funds through a non-cooperative jurisdiction, the gain derived from the disposition of shares is subject to Argentine income tax at an effective 31.5% rate on gross income. CFC Regulations It should be noted that in Argentina there are Controlled Foreign Corporation (CFC) regula - tions by which foreign vehicles could be consid - ered transparent for tax purposes. In this regard, the CFC legislation implemented under Act No 27,430 requires specific and detailed analysis to determine whether the Argentine resident inves - tor should be taxed on an accrual basis, even where no dividend or profit distributions were made by the foreign-controlled vehicle. Other Taxes The sale of mining projects could also involve other transfer taxes, such as tax on debits and credits in Argentine bank accounts, turnover tax and stamp tax, as the case may be. 5. Mining Investment and Finance 5.1 Attracting Investment for Mining The main features for attracting investment for mining are a stable and long-lasting mining legal framework, the solid title investors can obtain over mineral deposits which have no time limit,
and the promotional investment regime appli - cable to mining embedded both in the Mining Investment Law and under the recently enacted RIGI regime. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors Argentine legislation welcomes foreign invest - ments in productive and industrial activities, as well as in those areas requiring the rendering of services. The current legal framework is based upon the principle of non-discrimination among local and foreign investors, clearly evidenced by the fact that no legal authorisation is required to make a foreign investment in productive and industrial activities, foreign companies are not prevented from engaging in productive and industrial activities, and it is explicitly stipulated that foreign investors will not be subject to dis - crimination. The legal framework specifically applicable to the development of mining activities in Argentina particularly favours investment, either foreign or local. Due to the current global and local situation, important foreign exchange-control restrictions remain in place, particularly regarding outflows of funds from Argentina and proceeds from Argentine exports. However the RIGI regime provides interesting exemptions to the restrictive general rules. Moreover the current government is gradually loosening such FX restrictions. 5.3 International Treaties Related to Exploration and Mining It is worth mentioning that Argentina has entered into Bilateral Investment Treaties (BITs) with several countries, including Australia, Austria, Canada, Chile, China, Croatia, Denmark, Fin -
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