Argentina – USA Income Tax Treaty (1981) (Not In Force)

ARGENTINA — U.S.A.
INCOME AND CAPITAL TAX TREATY
(1981)

Date of Conclusion: 7 May 1981.

Entry into Force: Not yet in force (see Article 28).

Effective Date: Not yet effective.

CONVENTION BETWEEN
THE GOVERNMENT OF THE ARGENTINE REPUBLIC AND
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
FOR THE AVOIDANCE OF DOUBLE TAXATION AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME AND CAPITAL

Article 1
Personal scope

  1. This Convention shall generally apply to persons who are residents of one or both of the Contracting States.

  2. This Convention shall not restrict in any manner any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded–

(a) by the laws of either Contracting State, or

(b) by any other agreement between the Contracting States.

  1. Notwithstanding any provision of this Convention except paragraph 4 of this Article, a Contracting State may tax its residents (as determined under Article 4 (Fiscal Domicile)), and by reason of citizenship may tax its citizens, as if this Convention had not come into effect. For this purpose the term “citizen” shall include a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of income tax, but only for a period of 10 years following such loss.
  2. The provisions of paragraph 3 shall not affect:

(a) the benefits conferred by a Contracting State under paragraphs 1(b) and 4 of Article 18 (Pensions, etc.), Articles 23 (Relief From Double Taxation), 24 (Non-Discrimination), and 25 (Mutual Agreement Procedure); and

(b) the benefits conferred by a Contracting State under Articles 19 (Government Service), 20 (Students and Trainees) and 27 (Diplomatic Agents and Consular Officers), upon individuals who are neither citizens of, nor have immigrant status in, that State.

Article 2
Taxes covered

  1. This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State.
  2. The existing taxes to which this Convention shall apply are:

(a) In the United States:

— the Federal income taxes imposed by the Internal Revenue Code and the excise tax imposed with respect to private foundations, but excluding the accumulated earnings tax and the personal holding company tax.

(b) In the Republic of Argentina:

(i) the tax on profits (impuesto a las ganancias);

(ii) the capital gains tax (impuesto a los beneficios de caracter eventual);

(iii) the tax on capital of enterprises (impuesto al capital de las empresas);

(iv) the tax on net worth (impuesto al patrimonio neto).

  1. The Convention shall apply also to any identical or substantially similar taxes which are imposed by a Contracting State after the date of signature of this Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of substantial changes which have been made in their respective taxation laws.
  2. For the purpose of Article 24 (Non-Discrimination), this Convention shall also apply to taxes of every kind and description imposed by a Contracting State or a political subdivision or local authority thereof. For the purpose of Article 26 (Exchange of Information and Administrative Assistance), this Convention shall also apply to taxes of every kind imposed by a Contracting State.

Article 3
General definitions

  1. For the purpose of this Convention, unless the context otherwise requires:

(a) the term “person” includes an individual, a partnership, a company, an estate, a trust, and any other body of persons;

(b) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

(c) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

(d) the term “international transport” means any transport by a ship or aircraft, except where such transport is solely between places in one Contracting State;

(e) the term “competent authority” means:

(i) in the United States:

— the Secretary of the Treasury or his delegate, and

(ii) in Argentina:

— the Ministry of Economy, Treasury and Finance (Under Secretariat of Treasury);

(f) the term “United States” means the United States of America, but does not include Puerto Rico, the Virgin Islands, Guam or any other United States possession or territory;

(g) the term “Argentina” means the territory comprising the Republic of Argentina.

  1. As regards the application of this Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires and subject to the provisions of Article 25 (Mutual Agreement Procedure), have the meaning which it has under the laws of that State concerning the taxes to which this Convention applies.

Article 4
Resident

  1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of incorporation, or any other criterion of a similar nature, provided, however, that in the case of income derived or paid by a partnership, estate, or trust, this term applies only to the extent that the income derived by such partnership, estate, or trust is subject to tax as the income of a resident of that State, either in its hands or in the hands of its partners or beneficiaries.
  2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his or her status shall be determined as follows:

(a) The individual shall be deemed to be a resident of the State in which he or she has a permanent home available; if such individual has a permanent home available in both States, or in neither State, he or she shall be deemed to be a resident of the State with which his or her personal and economic relations are closer (centre of vital interests);

(b) If the State in which the individual’s centre of vital interests cannot be determined, he or she shall be deemed to be a resident of the State in which he or she has an habitual abode;

(c) If the individual has an habitual abode in both States or in neither of them, he or she shall be deemed to be a resident of the State of which he or she is a national;

(d) If the individual is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

  1. Where by reason of the provisions of paragraph 1 a company is a resident of both Contracting States, then if it is created or organized under the laws of a Contracting State or a political sub-division thereof, it shall be treated as a resident of that State.
  2. Where by reason of the provisions of paragraph 1 a person other than an individual or a company is a resident of both Contracting States, the competent authorities of the Contracting States shall by mutual agreement endeavour to settle the question and to determine the mode of application of the Convention to such person.

  3. For purposes of this Convention, an individual who is a national of a Contracting State shall also be deemed to be a resident of that State if

(a) the individual is an employee of that State or an instrumentality thereof in the other Contracting State or in a third State;

(b) the individual is engaged in the performance of governmental functions for the first-mentioned State; and

(c) the individual is subjected in the first-mentioned State to the same obligations in respect of taxes on income as are residents of the first-mentioned State. The spouse and minor children residing with the employee and subject to the requirements of (c) above shall also be deemed to be residents of the first-mentioned State.

Article 5
Permanent establishment

  1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
  2. The term “permanent establishment” shall include especially:

(a) a branch;

(b) an office;

(c) a factory;

(d) a workshop;

(e) a mine, an oil or gas well, a quarry, or any other place of extraction of natural resources; and

(f) facilities used for the purchase and export of goods.

  1. A building site or construction or installation project, or an installation or drilling rig or ship used for the exploration or development of natural resources, constitutes a permanent establishment only if it remains within a Contracting State more than 6 months. A ship used for making oceanographic surveys or for fishing constitutes a permanent establishment only if it remains within a Contracting State for more than 90 days in a taxable year.
  2. Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include:

(a) the use of facilities solely for the purpose of storage, display, or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;

(f) the maintenance of a fixed place of business solely for any combination of the activities mentioned in subparagraphs (a) to (e) of this paragraph.

  1. Notwithstanding the provisions of paragraph 1 and 2, where a person — other than an agent of an independent status to whom paragraph 6 applies — is acting on behalf of an enterprise and has and habitually exercises in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.
  2. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

  3. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not itself constitute either company a permanent establishment of the other.

Article 6
Income from immovable property (real property)

  1. Income derived by a resident of a Contracting State from immovable (real) property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
  2. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

  3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

  4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

Article 7
Business profits

  1. The business profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the business profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. However, business profits derived by an enterprise of a Contracting State from the activity of granting insurance covering property situated in the other Contracting State, or covering persons which are residents of that other State at the time of the conclusion of the insurance contract, may be taxed in that other State, whether or not the enterprise carries on its activity in that other State through a permanent establishment situated therein.
  2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the business profits which it might be expected to make if it were a distinct and independent enterprise engaged in the same or similar activities under the same or similar conditions.

  3. In determining the business profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including a reasonable allocation of executive and general administrative expenses, whether incurred in the State in which the permanent establishment is situated or elsewhere.

  4. No business profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

  5. For the purposes of the preceding paragraphs, the business profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

  6. Where business profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

  7. For the purposes of this Convention, “business profits” means income derived from any trade or business whether carried on by an individual, company or any other person, or group of persons, including the furnishing of the personal services of another person, but not including royalties (as defined in paragraph 3 of Article 12 (Royalties)).

Article 8
International transport

  1. Profits of a resident of a Contracting State from the operation in international transport of ships or aircraft shall be taxable only in that State.
  2. For purposes of this Article, profits of a resident of a Contracting State from the operation in international transport of ships or aircraft include profits derived from the rental on a full or bareboat basis of ships or aircraft if operated in international transport by a lessee who is a resident of that State, or if such rental profits are incidental to other profits described in paragraph 1.

  3. Profits of a resident of a Contracting State from containers (including trailers, barges and related equipment for the transport of containers) used by a resident of that State for the international transport of goods or merchandise shall be taxable only in that State.

  4. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

Article 9
Associated enterprises

  1. Where

(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

  1. Where a Contracting State includes in the profits of an enterprise of that State, and taxes accordingly, profits on which an enterprise of the other Contracting State has been charged to tax in that other State, and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.
  2. The provisions of paragraph 1 shall not limit any provisions of the law of either Contracting State which permit the distribution, apportionment or allocation of income, deductions, credits, or allowances between persons owned or controlled directly or indirectly by the same interests when necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such persons.

Article 10
Dividends

  1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
  2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the laws of that State, but if

(a) that State is Argentina and if the beneficial owner of the dividends is a resident of the United States, the tax so charged shall not exceed 20 percent of the gross amount of the dividends and, when combined with the Argentine tax on the profits out of which the dividends are paid, the aggregate Argentine tax shall not exceed 45 percent;

(b) that State is the United States and if the beneficial owner of the dividends is a resident of Argentina, the tax so charged shall not exceed 20 percent of the gross amount of the dividends.

  1. The term “dividends” as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.
  2. The provisions of paragraph 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State, of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 (Business profits) or Article 14 (Independent personal services), as the case may be, shall apply.

  3. Where a company is a resident of a Contracting State, the other Contracting State may not impose any tax on the dividends paid by the company, except insofar as

(a) the beneficial owner of such dividends is a resident of that other State,

(b) the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, or

(c) in cases where that other State is the United States, such dividends are paid out of profits attributable to one or more permanent establishments which such company had in that other State, provided that such profits constituted at least 50 percent of such company’s gross income from all sources.

Where subparagraph (c) applies and subparagraphs (a) and (b) do not apply, any such tax shall be subject to the limitations of paragraph 2.

Article 11
Interest

  1. Interest arising in a Contracting State which is derived and beneficially owned by a resident of the other Contracting State may be taxed in that other State.
  2. However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State with respect to persons who are not residents of that State.

  3. Notwithstanding paragraph 2, interest derived and beneficially owned by —

(a) one of the Contracting States or an instrumentality thereof (including the Central Bank of Argentina, the Banco de la Nacion of Argentina, the Banco Nacional de Desarollo of Argentina, the Federal Reserve Board of the United States, the Export-Import Bank of the United States, the Overseas Private Investment Corporation of the United States and such other institutions of either Contracting State as the competent authorities may agree to pursuant to Article 25 (Mutual Agreement Procedure)), or

(b) a resident of one of the Contracting States with respect to debt obligations made to finance imports of residents of the other Contracting State of capital goods destined for industrial use and guaranteed or insured by the first-mentioned Contracting State or an instrumentality thereof, shall be exempt from tax by the other Contracting State.

  1. The term “interest” as used in this Convention means income from debt-claims of every kind, whether or not secured by mortgage, and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums or prizes attaching to such securities, bonds or debentures.
  2. The provisions of paragraphs 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State, in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 (Business profits) or Article 14 (Independent personal services), as the case may be, shall apply.

  3. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

  4. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

  5. A Contracting State may not impose any tax on interest paid by a resident of the other Contracting State, except insofar as

(a) the beneficial owner of such interest is a resident of the first-mentioned State,

(b) the debt claim in respect of which the interest is paid is effectively connected with a permanent establishment or a fixed base situated in the first-mentioned State, or

(c) such interest arises in the first-mentioned State.

Article 12
Royalties

  1. Royalties arising in a Contracting State which are derived and beneficially owned by a resident of the other Contracting State may be taxed in that other State.
  2. However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State with respect to persons who are not residents of that State.

  3. The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films or films or tapes used for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or other like right or property, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. The phrase “information concerning industrial, commercial or scientific experience” means specialized knowledge, having intrinsic property value relating to industrial, commercial, or managerial processes, conveyed in the form of instructions, advice, teaching or formulas, plans or models, permitting the use or application of experience gathered on a particular subject. The term “royalties” also includes gains derived from the alienation of any such right or property which are contingent on the productivity, use, or disposition thereof.

  4. The provisions of paragraph 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State, in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 (Business profits) or Article 14 (Independent personal services), as the case may be, shall apply.

  5. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the person deriving the royalties in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

  6. Royalties shall be deemed to arise in a Contracting State where the right or property for which the royalties are paid is used within that State.

Article 13
Capital gains

  1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6

(Income from immovable property) and situated in the other Contracting State may be taxed in that other State.

  1. Gains derived by a resident of a Contracting State from the alienation of movable property forming part of the business property of a permanent establishment which such resident has in the other Contracting State or of movable property pertaining to a fixed base available to the resident in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.
  2. Gains derived by a resident of a Contracting State from the alienation of ships, aircraft or containers operated in international transport shall be taxable only in that State, and gains described in Article 12 (Royalties) shall be taxable only in accordance with the provisions of Article 12.

  3. Gains derived by a resident of a Contracting State from the alienation of ships or aircraft (other than those referred to in paragraph 3) and motor vehicles may be taxed in the State in which the ships, aircraft, or motor vehicles are documented or registered.

  4. Gains derived by a resident of a Contracting State from the alienation of:

(a) shares or other corporate rights of a company the property of which consists principally of immovable property situated in a Contracting State; or

(b) an interest in a partnership, trust or estate the property of which consists principally of immovable property situated in a Contracting State may be taxed in that State. For the purposes of this paragraph, the term “immovable property” includes the shares of a company referred to in subparagraph (a) or an interest in a partnership, trust or estate referred to in subparagraph (b), but does not include property (other than rental property or agricultural property) in which the business of the company, partnership, trust or estate is carried on.

  1. Gains derived by a resident of a Contracting State from the alienation of tangible personal (movable) property, other than property referred to in the preceding paragraphs, may be taxed in the Contracting State in which the property is located.
  2. Gains from the alienation of property other than that referred to in paragraphs 1, 2, 3, 4, 5 and 6 shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14
Independent personal services

Income derived by an individual who is a resident of a Contracting State from the performance of personal services in an independent capacity shall be taxable only in that State unless such services are performed in the other Contracting State and

(a) the individual is present in that other State for a period or periods aggregating more than 183 days in the taxable year concerned, or

(b) the individual has a fixed base regularly available to him in that other State for the purpose of performing his activities, but only so much of the income as is attributable to that fixed base may be taxed in such other State.

Article 15
Dependent personal services

  1. Subject to the provisions of Articles 18 (Pensions, etc.) and 19 (Government services), salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
  2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State, shall be taxable only in the first-mentioned State if:

(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the taxable year concerned,

(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and

(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

  1. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment as a member of the regular complement of a ship or aircraft operated by a resident of a Contracting State in international transport may be taxed only in that Contracting State.

Article 16
Directors’ fees

Directors’ fees and similar payments derived by a resident of a Contracting State as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State, but only to the extent that the total of all such payments by the company to residents of the first-mentioned State exceeds twelve thousand United States dollars ($12,000) or its equivalent in Argentine pesos in the taxable year.

Article 17
Artistes and athletes

  1. Notwithstanding the provisions of Articles 14 (Independent personal services) and 15 (Dependent personal services), income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his or her personal activities as such exercised in the other Contracting State, may be taxed in that other State, except where the amount of the gross receipts derived by such entertainer or athlete, including expenses reimbursed to him or her or borne on his or her behalf, from such activities do not exceed the lesser or four hundred United States dollars ($400) or its equivalent in Argentine pesos for each day such person is present in the other Contracting State for the purpose of performing such services, or twelve thousand United States dollars ($12,000) or its equivalent in Argentine pesos for the taxable year concerned.
  2. Where income in respect of personal activities exercised by an entertainer or an athlete in his or her capacity as such accrues not to that entertainer or athlete but to another person, that income may, notwithstanding the provisions of Articles 7 (Business profits), 14 (Independent personal services), and 15 (Dependent personal services), be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised; however, where such other person is an organization which is exempt from taxation in the Contracting State in which it is a resident as a not-for-profit organization, such income shall be exempt from tax in the other Contracting State.

Article 18
Pensions, etc

  1. Subject to the provisions of paragraph 2 of Article 19 (Government service),

(a) private pensions and other similar remuneration beneficially derived by a resident of a Contracting State in consideration of past employment shall be taxable only in that State, and

(b) social security payments and other public pensions (including, in the case of Argentina, “jubilaciones”) paid by a Contracting State to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned Contracting State.

  1. Annuities arising in a Contracting State which are beneficially derived and owned by a resident of the other Contracting State may be taxed in both Contracting States. However, the tax applied in the first-mentioned State may not exceed 20 percent of the gross amount of each annuity payment constituting income under the laws of that State. The term “annuities” as used in this paragraph means a stated sum paid periodically at stated times during life or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration other than services rendered.
  2. Alimony paid to a resident of a Contracting State by a resident of the other Contracting State shall be exempt from tax in the other Contracting State. The term “alimony” as used in this paragraph means periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, which payments are taxable to the recipient under laws of the State of which he or she is a resident.

  3. Periodic payments for the support of a minor child made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, paid by a resident of one of the Contracting States to a resident of the other Contracting State, shall be exempt from tax in both Contracting States.

Article 19
Government service

1.

(a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:

(i) is a national of that State; or

(ii) did not become a resident of that State solely for the purpose of rendering the services.

The provisions of clause (ii) shall not apply to the spouse or dependent children of an individual who is receiving remuneration to which the provisions of subparagraph (a) apply and who does not come within the terms of clause (i) or (ii).

2.

(a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

  1. The provisions of Articles 14 (Independent personal services), 15 (Dependent personal services), 16 (Directors’ fees), 17 (Artistes and athletes), and 18 (Pensions, etc.) shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

Article 20
Students and trainees

  1. Payments which a student, apprentice or business trainee who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State for the purpose of his or her full-time education or training receives for the purpose of his or her maintenance, education or training shall not be taxed in that State provided that such payments arise from sources outside that State.
  2. An individual present in the United States who meets the requirements of paragraph 1 may elect to be treated for all tax purposes as a resident of the United States. The election shall apply to all periods during the taxable year of the election and subsequent taxable years during which the individual qualifies under paragraph 1, and may not be revoked except with the consent of the competent authority of the United States.

Article 21
Other income

Items of income of a resident of a Contracting State, arising in the other Contracting State and not dealt with in the foregoing Articles of this Convention, may be taxed in that other State.

Article 22
Taxation of capital

  1. Capital represented by immovable property referred to in Article 6 (Income from immovable property), owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State.
  2. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or by movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.

  3. Capital represented by ships and aircraft operated by a resident of a Contracting State in international transport and movable property pertaining to the operation of such ships and aircraft shall be taxable only in that State.

  4. Capital represented by ships or aircraft (other than those referred to in paragraph 3) and motor vehicles may be taxed in the State in which the ships, aircraft or motor vehicles are documented or registered.

  5. Capital represented by shares or other corporate rights may be taxed in the Contracting State of which the company is a resident.

  6. Capital represented by tangible personal (movable) property other than property referred to in the preceding paragraphs may be taxed in the Contracting State in which the property is located.

  7. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

Article 23
Relief from double taxation

  1. In the case of the United States, double taxation shall be avoided as follows:

In accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle hereof), the United States shall allow to a resident or citizen of the United States as a credit against the United States tax on income the appropriate amount of tax paid to Argentina; and, in the case of a United States company owning at least 10 percent of the voting stock of a company which is a resident of Argentina from which it receives dividends in any taxable year, the United States shall allow as a credit against the United States tax on income the appropriate amount of tax paid to Argentina by that company with respect to the profits out of which such dividends are paid. Such appropriate amount shall be based upon the amount of tax paid to Argentina, but the credit shall not exceed the limitations (for the purpose of limiting the credit to the United States tax on income from sources outside of the United States) provided by United States law for the taxable year. For purposes of applying the United States credit in relation to tax paid to Argentina the taxes referred to in paragraphs 2(b)(i) and (ii) and 3 of Article 2 (Taxes covered) shall be considered to be income taxes.

  1. In the case of Argentina, when a resident of Argentina derives income arising in the United States which, in accordance with this Convention, is not income of Argentine source, such income shall be excluded from the basis on which Argentine tax is imposed.
  2. For the purposes of the preceding paragraphs of this Article, the source of income or profits shall be determined in accordance with the following rules:

(a) Dividends, as defined in paragraph 3 of Article 10 (Dividends), shall be deemed to arise in a Contracting State if paid by a company which is a resident of that State or if paragraph 5(c) of Article 10 (Dividends) applies.

(b) Interest, as defined in paragraph 4 of Article 11 (Interest), shall be deemed to arise in the State specified in paragraph 6 of Article 11.

(c) Royalties, as defined in paragraph 3 of Article 12 (Royalties), shall be deemed to arise in the State specified in paragraph 6 of Article 12.

(d) Except for income or profits referred to in subparagraphs (a), (b), or (c), except for income referred to in Article 21 (Other income), and except for income or profits taxed by the United States solely by reason of citizenship in accordance with paragraph 2 of Article 1 (Personal scope), income or profits derived by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise in that other Contracting State; and income derived by a resident of Argentina which may not be taxed in the United States in accordance with this Convention, except by reason of citizenship, shall be deemed to arise in Argentina.

Article 24
Non-discrimination

  1. Nationals of a Contracting State shall not be subjected in the other State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1 (Personal scope), also apply to persons who are not residents of one or both of the Contracting States. For purposes of United States taxation, United States citizens who are not resident in the United States are not in the same circumstances as Argentine citizens who are not resident in the United States.
  2. The term “nationals” means:

(a) all individuals possessing the citizenship of a Contracting State,

(b) all legal persons, partnerships and associations deriving their status as such from the laws in force in a Contracting State.

  1. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents. Nor shall this provision be construed as preventing a Contracting State from imposing on the profits of a company attributable to a permanent establishment in that State tax in addition to the tax imposed on the profits of a company which is a national of that State, provided that any additional tax so imposed, when combined with the tax imposed on the profits of a company which is a national of that State, shall not exceed the combined amount of tax imposed by that State under this Convention on the profits of a company which is a national of that State and on the dividends paid by such a company out of such profits to a resident of the other Contracting State.
  2. Except where the provisions of paragraph 1 of Article 9 (Associated enterprises), paragraph 7 of Article 11 (Interest), or paragraph 5 of Article 12 (Royalties) apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.

  3. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.

  4. The provisions of this Article shall, in accordance with the provisions of paragraph 4 of Article 2 (Taxes covered), apply to taxes of every kind and description imposed by a Contracting State or political subdivision or local authority thereof.

Article 25
Mutual agreement procedure

  1. Where a person considers that the actions of one or both of the Contracting States result or will result for him or her in taxation not in accordance with the provisions of this Convention, he or she may, irrespective of the remedies provided by the domestic law of those States, present his or her case to the competent authority of the Contracting State of which he or she is a resident or national.
  2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States, provided that the taxpayer or the competent authority of the first-mentioned State gives notice to the competent authority of the other Contracting State no longer than one year after the taxpayer receives notification of a proposed adjustment.

  3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. In particular the competent authorities of the Contracting States may agree on the following:

(a) attribution of income, deductions, credits, or allowances of an enterprise of a Contracting State to its permanent establishment situated in the other Contracting State;

(b) allocation of income, deductions, credits, or allowances between persons, including a uniform position on the application of the requirements of paragraph 3 of Article 24 (Nondiscrimination);

(c) characterization of particular items of income;

(d) application of source rules with respect to particular items of income; and

(e) to a common meaning of a term.

They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

  1. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.

Article 26
Exchange of information and administrative assistance

  1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1 (Personal scope). Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.
  2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

  1. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall obtain the information to which the request relates in the same manner and to the same extent as if the tax of the first-mentioned State were the tax of that other State and were being imposed by that other State. If specifically requested by the competent authority of a Contracting State, the competent authority of the other Contracting State shall provide information under this Article in the form of depositions of witnesses and authenticated copies of unedited original documents (including books, papers, statements, records, accounts, or writings), to the same extent such depositions and documents can be obtained under the laws and administrative practices of such other State with respect to its own taxes.
  2. Each of the Contracting States shall endeavour to collect on behalf of the other Contracting State such amounts as may be necessary to ensure that relief granted by the present Convention from taxation imposed by such other Contracting State does not enure to the benefit of persons not entitled thereto.

  3. Paragraph 4 of this Article shall not impose upon either of the Contracting States the obligation to carry out administrative measures which are of a different nature from those used in the collection of its own tax, or which would be contrary to its sovereignty, security, or public policy.

  4. For the purpose of this Article, this Convention shall apply to taxes of every kind imposed by a Contracting State.

Article 27
Diplomatic agents and consular officers

Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.

Article 28
Entry into force

  1. This Convention shall be subject to ratification in accordance with the applicable procedures of each Contracting State and instruments of ratification shall be exchanged at Washington, D.C. as soon as possible.
  2. The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect:

(a) In respect of tax definitively withheld at the source, to amounts paid or credited on or after the first day of the second month next following the date on which this Convention enters into force,

(b) In respect of other taxes, to taxable periods beginning on or after the first day of January next following the date on which this Convention enters into force.

Article 29
Termination

  1. This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention at any time after 5 years from the date on which this Convention enters into force provided that at least 6 months’ prior notice of termination has been given through diplomatic channels. In such event, the Convention shall cease to have effect:

(a) In respect of tax definitively withheld at the source, to amounts paid or credited on or after the first day of January next following the expiration of the 6 months’ period;

(b) In respect of other taxes, to taxable periods beginning on or after the first day of January next following the expiration of the 6 months’ period.

DONE in the city of Buenos Aires, capital of the Republic of Argentina, this 7th day of May, 1981, in duplicate, in the English and Spanish languages, the two texts having equal authenticity.

Source: U.S. Tax Treaties > Argentina > ARGENTINA – U.S.A. INCOME AND CAPITAL TAX TREATY > PROTOCOL

PROTOCOL

The Government of the United States of America and the Government of the Republic of Argentina, desiring to conclude a Protocol clarifying and supplementing the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital to be signed simultaneously with the signing of this Protocol, have agreed upon the following points:

  1. In connection with paragraph 2 of Article 11 (Interest) and paragraph 2 of Article 12 (Royalties), the Contracting States agree that, if the rate of Argentine taxes on either interest or royalties paid to persons who are not residents of Argentina is raised significantly above the rates on those types of income prevailing as of August 16, 1979, they will consult further with a view to determining whether the provisions of the above mentioned paragraphs, or any other provisions of the Convention, should be revised; in connection with Article 13 (Capital gains), the Contracting States agree that, if either of them begins to subject to a tax covered by the Convention gains derived by non-residents from the alienation of shares or other corporate rights (other than shares or other corporate rights covered by the provisions of Article 13), they will consult further with a view to determining whether the provisions of Article 13, or any other provision of the Convention, should be revised.

  2. In connection with paragraph 2 of Article 12 (Royalties), for the purpose of computing the Argentine tax on royalties with respect to the use of, or the right to use, industrial, commercial or scientific equipment in Argentina, Argentina shall allow deductions for expenses incurred in Argentina directly in producing such royalties, a reasonable allowance for depreciation, and the expenses (such as freight and insurance) of introducing such equipment into Argentina.

  3. In connection with paragraph 2 of Article 17 (Artistes and athletes), it is agreed that the first portion of that paragraph allows each Contracting State to apply its own domestic law with respect to the taxation of companies employing entertainers, artistes or athletes. Each Contracting State, in computing its tax, shall allow deductions in accordance with its law.

  4. In connection with Article 2 (Taxes covered) and Article 23 (Relief from double taxation), it is agreed that the provisions of this Convention shall not be construed to prevent the application by Argentina of its Foreign Investment Law Tax on Remittances (Impuesto a las Remesas de la ley de inversiones extranjeras), or the application by Argentina of the first sentence of the first paragraph of Article 21 of Title I of the Argentine tax on profits in force on August, 16, 1979; however, the United States is not obligated by the Convention to allow a credit against United States tax for Argentine tax levied under the above-mentioned provisions.