Santiago  

On May 15, the governments of Chile and Argentina signed an Agreement to Eliminate Double Taxation and prevent tax evasion and avoidance between the two countries (the "Agreement").

The Agreement, which follows the guidelines provided by the Organization for Economic Cooperation and Development ("Organización para la Cooperación y el Desarrollo Económicos"), will enter into force once it is ratified in the manner stipulated by the internal legislation of each country, and the other contracting State is notified of said ratification through diplomatic channels.

With the signing of this Agreement, there are now four Agreements for the Avoidance of Double Taxation subscribed by Chile which are pending ratification: Austria, Argentina, USA and South Africa. In addition to these, 25 agreements are already in full force.

It should be recalled that prior to the signing of this Agreement, the Convention for the Avoidance of Double Taxation signed in 1976 was in effect between the two countries, which had been rescinded by unilateral denunciation on the part of the Argentine Government on June 29, 2012. Consequently, it can be expected that the Congress and the executive branches of both countries will promote a prompt initiation and conclusion of the ratification procedures and promulgation of the Treaty, in order for it to take effect as soon as possible, thus filling the legislative void left by the termination of the previous Agreement, which affects companies and individuals residing in both countries by income generated by the other contracting State.