Argentina – USA Transport Tax Agreement (1987)

Transportation Tax Agreement (1987)

This Treaty was signed on December 30, 1987 and entered into force on December 30, 1987. 

DEPARTMENT OF STATE WASHINGTON

DECEMBER 30, 1987

Excellency:

I have the honor to refer to the agreement signed on July 20, 1950 to exempt from income tax, on a reciprocal basis, income derived from international operation of ships and aircraft. The Government of the United States proposes that the Government of the United States of America and the Government of the Argentine Republic modify the terms of the agreement. The terms of the modified agreement are as follows:

Article 1

For the purposes of this agreement:

1.

(a) The term “U.S. tax” means the Federal income taxes imposed by the Internal Revenue Code, including the tax on gross income imposed by section 887.

(b) the term “Argentine tax” means:

(i) the income tax (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).

2. The term “Party” means the United States or Argentina, as the case may be. 3. The term “enterprise of a Party” means:

(a) in the case of an Argentine enterprise, enterprises owned by the Government of Argentina or a political subdivision or local authority thereof, individuals who are residents of Argentina and not citizens of the United States, or corporations or companies having their place of effective management in Argentina and not created under the laws of the United States.

(b) in the case of a United States enterprise, an enterprise owned by the Government of the United States or a political subdivision or local authority thereof, individuals who are citizens or residents of the United States and not residents of Argentina, or companies created under the laws of the United States and not having their place of effective management in Argentina.

(c) it is understood that for a corporation to claim the benefits of this Agreement as an enterprise of a Party, it must satisfy the requirements of the law of the other Party designed to limit such benefits to corporations owned by residents of the first-mentioned Party.

4. The term “gross income” means all income derived from the international operation of ships or aircraft, including income from the rental of ships or aircraft on a full (time or voyage) basis and from the rental on a bareboat basis of ships or aircraft if the ships or aircraft are used in international transport or the rental income is incidental to income from the international operation of ships or aircraft. It also includes income from the rental of containers and related equipment used in international transport, and gains from the alienation of ships or aircraft or containers operated in international transport, provided that such activity of rental or alienation is incidental to the international operation of ships or aircraft.

5. The term “competent authority” means:

(a) in the case of the United States, the Secretary of the Treasury or his delegate; and (b) in the case of Argentina, the Ministry of Economy (Secretaria de Hacienda).

6. The term “international operation of ships or aircraft” means the activity of transporting by ship or aircraft passengers, cargo, or mail and other directly related activities carried on by the owner, lessor or charterer of ships or aircraft except where such transport is solely between places in one Party.

Article 2

1. Gross income from the international operation of ships or aircraft derived by an enterprise of a Party shall be exempt from tax in the other Party.

2. Capital represented by ships or aircraft operated in international transport and by movable or immovable property pertaining exclusively to the operation of such ships or aircraft shall be taxable only in the Party in which the enterprise that operates such ships or aircraft is subject to tax in accordance with the preceding provisions.

3. The provisions of this article shall also apply to gross income from participation in a pool, a joint business, or an international operating agency.

Article 3

The competent authorities of the Parties shall endeavor to resolve by mutual agreement any difficulty or doubt arising as to the interpretation and application of this Agreement.

Article 4

The competent authorities of the Parties will endeavor to ensure that the tax benefits provided in this Agreement are not enjoyed by enterprises of third Parties.

Article 5

The Parties shall notify each other through diplomatic channels when their respective constitutional requirements for the entry into force of this Agreement have been satisfied. The Agreement shall enter into force on the date of the later of these notifications and shall have effect with respect to taxable years beginning on or after January 1, 1987. The Agreement shall be applied provisionally as of the date of signature.

Article 6

This agreement may be terminated by either Party giving written notice through diplomatic channels.

The Government of the United States of America considers that this note, together with your Government’s reply note confirming that the Government of Argentine Republic agrees to these terms, constitutes an agreement between the two Governments modifying the agreement of July 20, 1950.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Acting Secretary of State:

Department of State
DECEMBER 30 1987

Washington,