Executive summary

On 18 March 2026, the Argentine Senate approved a tax treaty to prevent double taxation, tax evasion and tax avoidance between Argentina and Austria (the Tax Treaty). The Tax Treaty had been approved by the Chamber of Deputies on 1 October 2024. (For background, see EY Global Alert, Argentine Chamber of Deputies approves Multilateral Instrument and other tax treaties, dated 9 October 2024.)

The Tax Treaty will enter into force once both countries complete their domestic ratification procedures and notify each other through diplomatic channels.

Key Argentine tax aspects

The Tax Treaty defines a permanent establishment (PE) broadly, including: a fixed place of business (e.g., branch, office, factory); a construction or installation project lasting more than six months; and the location where services are rendered in the other State for more than six months within any 12-month period (service PEs).

Under the Tax Treaty, the withholding tax applicable to dividend payments is reduced to 10% if the beneficial owner is a company holding at least 25% of the capital of the distributing company, or 15% in all other cases. In any event, the lower domestic 7% dividend WHT should be applicable.

The withholding tax on interest is reduced to 12% under the Tax Treaty and certain exemptions apply, including for interest paid to governments or central banks, or certain qualifying loans and export credits.

The Tax Treaty generally provides a withholding tax of up to 15% for royalties. However, royalties originating from the use of industrial, commercial or scientific equipment and for technical assistance are subject to a withholding tax of up to 10% and royalties for the right to use news content, copyrights and similar rights (subject to conditions), are subject to a withholding tax ranging from 3% to 5%. The Treaty protocol establishes that the contracts must be duly registered and authorized in accordance with the provisions of their domestic legislation (i.e., registration of the agreement in Argentina's National Institute of Industrial Property (INPI)).

Gains from the sale of shares or comparable interests by private entities may be taxed in the source country, with maximum rates of 10% or 15%, depending on the level of participation.

The Tax Treaty also includes: (1) a principal purpose test denying treaty benefits where one of the principal purposes of an arrangement is to obtain such benefits, (2) a limitation of benefits clause, (3) comprehensive exchange of information provisions aligned with Organisation for Economic Co-operation and Development standards, and (4) assistance in the collection of taxes, including administrative penalties and interest.

Implications

Companies doing business in Argentina and Austria should consider the changes introduced by the Tax Treaty and evaluate the possible effect the Treaty could have on their operations and activities.