Argentina’s Chamber of Deputies’ Budget and Finance Committee approved the draft legislation for ratifying the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (MLI) on 31 July, 2024.
Argentina must submit its ratification instrument to activate the MLI for its covered agreements, such as tax treaties after the internal ratification process is finalised.
The Multilateral Instrument (MLI) was established after negotiations with over 100 countries and jurisdictions. MLI allows nations to amend their existing tax treaties to incorporate measures developed under the OECD/G20 BEPS project.
The instrument will establish minimum standards for combating treaty abuse, preventing the artificial avoidance of permanent establishment status, and enhancing dispute resolution mechanisms.
The MLI typically takes effect for a specific covered agreement on the first day of the month, three months after both parties have submitted their ratification instruments.
Once in effect, the MLI provisions generally apply to withholding taxes for the covered agreement from 1 January of the year following its entry into force and to all other taxes for taxable periods commencing six months from the date of entry into force.
Concerning other taxes, Argentina has reserved that the MLI will apply for tax periods beginning on or after 1 January of the next calendar year, six months after it enters into force.
