Argentina and Brazil have fulfilled their domestic law requirements and made the proper notifications for the Amendment Protocol to the tax treaty, meaning the protocol will enter into force on July 29, 2018. Argentine and Brazilian taxpayers should review the changes in the protocol.

The Amendment Protocol (the Amendment Protocol) to the Convention to Avoid Double Taxation and Prevent Fiscal Evasion (DTT) between Argentina and Brazil, signed on July 21, 2017, will enter into force on July 29, 2018. Argentina completed its internal procedures and notified Brazil on May 24, 2018. Brazil completed its internal procedures and notified Argentina on June 29, 2018. (For more information on the Amendment Protocol, see Tax Alert 2017-1254.)

According to the Amendment Protocol, its provisions take effect:

— For taxes withheld at source on income derived on or after January 1, 2019

— For other taxes on income and taxes on capital chargeable for any tax year beginning on or after January 1, 2019

The Amendment Protocol contains important modifications to the current DTT, including reduced withholding tax rates for interest and royalties, a tax credit system for the avoidance of double taxation, a definition of "technical assistance" and "technical services," and several anti-abuse provisions that should be taken into account by both Argentine and Brazilian taxpayers.

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