Argentina and Mexico have entered into a Double Taxation Treaty (DTT). Entry into force is yet pending. We estimate that the provisions of the agreement shall have effect as from fiscal year beginning on January 1st, 2018.
Some relevant provisions applicable to intercompany transactions are as follows:
1) Interests: Withholding tax may not exceed 12% (reduced from 35% Argentine withholding tax rate).
2) Royalties: Withholding tax on technical assistance, software, trademarks, shall not exceed 10% of the gross amount paid (reduced from approx. 28% Argentine withholding tax rate).
3) Capital Gains: Withholding tax for gains derived from the sale of shares shall not exceed 10% of the gain (reduced from 15% Argentine withholding tax rate).
4) Dividends paid to a foreign entity shall not be subject to tax, as per Argentine domestic law.
There are other benefits to be derived from the DTT plus other relevant provisions, in light with most OECD-like treaties.