DT2520.23 - Argentina: double taxation agreement, Article 23: Elimination of double taxation

(1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):

(a) Argentinian tax payable under the laws of Argentina and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Argentina (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Argentinian tax is computed;
(b) in the case of a dividend paid by a company which is a resident of Argentina to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Argentinian tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Argentinian tax payable by the company in respect of the profits out of which such dividend is paid.

(2) In Argentina:

Where a resident of Argentina derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in the United Kingdom, Argentina shall allow:
(a) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in the United Kingdom;
(b) as a deduction from the tax on capital of that resident, an amount equal to the capital tax paid in the United Kingdom.
Such deduction in either case shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in the United Kingdom.

(3) For the purposes of paragraphs (1) and (2) of this Article, profits, income and capital gains owned 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 from sources in that other Contracting State.

(4) The term `Argentinian tax payable` shall be deemed to include any amount which would have been payable as Argentinian tax, in accordance with the provisions of the Convention, for any year but for a deduction allowed in ascertaining the taxable income or an exemption from, or reduction of, tax granted for that year or any part thereof under:

(i) the Laws 19.640 and 22.095 including the Laws 20.560, 21.608 and 22.021 (and the Laws that have extended the benefits provided by the Law 22.021 to other provinces than those originally covered by the last mentioned Law), as modified by the Law 23.658 (as amended from time to time without affecting the general principle thereof); or
(ii) any other provision which may be enacted after the date of signature of the Convention allowing a deduction in ascertaining the taxable income or granting an exemption from, or reduction of, tax which is agreed by the competent authorities of the Contracting States to be for the purpose of promoting economic development in Argentina for a limited period of time - (as amended from time to time without affecting the general principle thereof).

(5) Relief from United Kingdom tax by virtue of paragraph (4) shall not be given where the profits, income or chargeable gains in respect of which tax would have been payable but for the exemption or reduction of tax granted under the provisions referred to in that paragraph arise or accrue more than ten years after the date on which this Convention enters into force or in respect of income or profits from any source if that income or those profits arise in a period beginning more than ten years after the exemption or reduction referred to in that paragraph was first granted in respect of that source, whether that period began before or after the entry into force of this Convention. However, the competent authorities of the Contracting States may consult each other in order to determine whether the period of ten years shall be extended.