On July 16, 2012 the decision of the Argentine Republic to terminate the treaty executed with the Republic of Chile for the purpose of avoiding double taxation was published in the official Gazette.
The treaty was executed between Argentina and Spain in 1992 with the purpose of avoiding double taxation and preventing tax evasion of income and capital taxes.
Persuant to this treaty, Spanish residents with equity interests in local companies enjoy a preferential tax treatment by which tax on personal assets is not applicable to them. This tax is paid on an annual basis by Argentine Companies acting as “substitute obligors” of their shareholders. The mentioned preferential treatment will cease its effect as of January 1, 2013.
Argentina has decided to denounce the end of the Treaty with Spain, understanding by “denouncement” one of the allowed methods to end up with the legal effects emerging from an International Treaty.
