On January 14, 2014, a new Tax treaty to avoid double taxation between Spain and Argentina was published.
We want to remind our readers that the former treaty was denounced by the Argentinean Government and had no effects during 2013. This new Treaty will certainly promote mutual relationship between the two countries and should facilitate cross-border transactions between companies and individuals residing either in Spain or in Argentina.
✔ The role of Double Taxation Treaties is extremely important as they facilitate the exchange of information between the two countries, provide for the taxation rights of incomes and capital gains obtained by a company or individual residing in one state but generated in the other contracting state at reduced rates and also establish methods to avoid double taxation.
✔ As an example, the new Treaty allows the State of source (where income is generated) to tax the following reduced rates: (i) dividends, 15 or 10%; (ii) interest, 12%; or (iii) royalties, 3, 5, 10 or 15%, depending on the type of income.
✔ We welcome this new Treaty, with retroactive effects to Jan.01, 2013, as it resolves the gap period in which no Treaty protection was provided to transactions between the two countries.