Argentina - Dividend

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 the recipient is the beneficial owner of the dividends the tax so charged shall not exceed:

a)10 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends;

b)15 per cent of the gross amount of the dividends in all other cases.

3. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of paragraph 2.

4. The provisions of paragraph 2 shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

5. The term “dividends" as used in this Article means income from shares, “jouissance" shares or “jouissance" rights, mining shares, founders' 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.

6. The provisions of paragraphs 1 and 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 case the provisions of Article 7 or Article 15, as the case may be, shall apply.

7. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as 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, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

Protocol:

Ad Articles 7, 10, 11, 12, 13, 14 and 15

a)Where tax has been levied at source in excess of the amount of tax chargeable under the provisions of Articles 7, 10, 11, 12, 13, 14 and 15 applications for the refund of the excess amount of tax have to be lodged with the competent authority of the State having levied the tax, within a period of three years after the expiration of the calendar year in which the tax has been levied;

b)The competent authorities of the Contracting States may by mutual agreement settle the mode of application of Articles 7, 11, 14 and 15.

Ad Articles 7, 10, 11, 12, 13, 14, 15 and 23

If under any double tax treaty concluded after the date of conclusion of this Convention between the Republic of Argentina and a third country which is a member of the OECD, the Republic of Argentina limits its taxation at source on insurance or reinsurance premiums, on dividends as meant in subparagraph a) of paragraph 2 of Article 10, on branch profits, on interest, on royalties, on capital gains, on independent personal services, on other income as meant in Article 23, or on specific items of such income, to a rate lower, including exemption from taxation, exemption from the additional taxation as meant in Article 11, or a taxation over a reduced taxable base, than the rates provided for in paragraph 5 of Article 7, subparagraph a) of paragraph 2 of Article 10, Article 11, paragraph 2 of Article 12, paragraph 2 of Article 13, paragraphs 2, 5 and 6 of Article 14, subparagraph b) of paragraph 2 of Article 15 and paragraph 3 of Article 23 of this Convention, respectively, then the lower rates, the exemption or the reduced taxable base as provided for in the double tax treaty concerned shall automatically apply to the residents of both Contracting States, with effect from the date of the entry into force of such double tax treaty, in respect to the relevant type or category of income.