Argentina

JUAN CARLOS I

KING OF SPAIN

Since, on 21 July 1992, the Plenipotentiary of Spain signed in Madrid, together with the Plenipotentiary of the Argentine Republic, the Convention between the Kingdom of Spain and the Argentine Republic on the prevention of double taxation and tax evasion in respect of income and wealth taxes and the Protocol;

Having regard to and examined the 29 articles of the Convention and the Protocol forming an integral part thereof;

Granted by the Cortes Generales the authorization provided for in article 94.1 of the Constitution,

I come to approve and ratify what is provided for in it, as I hereby approve and ratify it, promising to comply with it, observe it and ensure that it is implemented and observed in a timely manner in all its parts, for the purpose of which, for further validation and firmness, I command to issue this instrument of ratification signed by me, duly sealed and endorsed by the undersigned Minister for Foreign Affairs.

Done at Madrid on 20 July 1994.

JUAN CARLOS R.

The Minister for Foreign Affairs,

JAVIER SOLANA MADARIAGA

AGREEMENT BETWEEN THE KINGDOM OF SPAIN AND THE ARGENTIAN REPUBLIC TO AVOID DOUBLE IMPOSITION AND PREVENCE TAX EVASION ON RENT AND PATRIMONY TAX

The Kingdom of Spain and the Argentine Republic, wishing to conclude a convention to prevent double taxation and to prevent tax evasion in the area of income and property taxes, have agreed as follows:

Article 1. Personal ambit.

This Convention applies to persons resident in one or both Contracting States.

Article 2. Taxes covered.

1. This Convention applies to income and property taxes payable by each of the Contracting States, irrespective of the system of their levy.

2. Income and property taxes are those that tax all or any part of the income or property, including taxes on profits resulting from the disposal of movable or immovable property, taxes on the amount of wages or salaries paid by enterprises, as well as taxes on capital gains.

3. The taxes to which this Convention applies are currently:

(a) In Spain:

I. The Income Tax of Physical Persons.

II. The Corporate Tax.

III. The Wealth Tax.

Hereinafter referred to as “Spanish tax”.

(b) In Argentina:

I. The income tax.

II. The asset tax.

III. Personal tax on goods not incorporated into the economic process.

Hereinafter referred to as the Argentine tax.

4. This Convention shall also apply to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added to or replaced by the present ones. The competent authorities of the Contracting States shall notify each other of any relevant amendments to their respective tax laws.

Article 3. General definitions.

1. This Convention, unless otherwise interpreted:

(a) The expressions <one Contracting State and the other Contracting State> designate, as appropriate, the Kingdom of Spain or the Argentine Republic.

(b) The term " person " includes natural persons, corporations and any other grouping of persons.

(c) The term " company " means any legal person or any entity that is considered a legal person for tax purposes.

(d) The terms `undertaking of one Contracting State ' and `undertaking of the other Contracting State ' mean, respectively, an enterprise operated by a resident of one Contracting State and an enterprise operated by a resident of the other Contracting State.

(e) The expressions " resident of a Contracting State " and " resident of the other Contracting State " mean, respectively, a person who is resident of Spain or a person who is resident of the Argentine Republic, as required by the text.

(f) The term <national> means:

(i) All natural persons possessing the nationality of a Contracting State.

(ii) All legal persons, companies of persons and associations incorporated under the law in force in a Contracting State.

(g) The term " international transport " means any transport by ship or aircraft operated by an undertaking having its effective headquarters established in one Contracting State, except where the ship or aircraft is operated only between places of the other Contracting State.

(h) The expression <competent authority> means:

(i) In Spain: The Minister of Economy and Finance or his duly authorized representative.

(ii) In the Argentine Republic: Ministry of Economy, Public Works and Services (Secretariat of Public Revenues).

Article 4. Residence.

1. For the purposes of this Convention, the expression "resident of a Contracting State " means any person who, under the law of that State, is subject to taxation in that State on the basis of his domicile, residence, place of address or any other criterion of a similar nature provided for in that legislation. However, this term does not include persons who are subject to taxation in this State solely for the income they obtain from sources located in that State or for the assets they possess in that State.

2. Where pursuant to the provisions of paragraph 1, a natural person is resident in both Contracting States, his residence shall be determined in accordance with the following rules:

(a) This person shall be considered a resident of the Contracting State where he or she has a permanent dwelling at his or her disposal. If you have permanent housing at your disposal in both Contracting States, you will be considered a resident of the Contracting State in which you have closer personal and economic relations (centre of vital interests).

(b) If the Contracting State in which that person has the centre of his or her vital interests cannot be determined, or if he or she does not have permanent housing at his or her disposal in any of the Contracting States, he or she shall be considered a resident of the Contracting State in which he or she habitually lives.

(c) If he lives habitually in both Contracting States, or does not live in either Contracting State, he or she shall be considered a resident of the Contracting State of which he or she is a national.

(d) If he is a national of both Contracting States or is not a national of either Contracting State, the competent authorities of the Contracting States shall decide the case by mutual agreement.

3. Where under the provisions of paragraph 1 a person other than a natural person is a resident of both Contracting States, he or she shall be considered a resident of the Contracting State in which his or her place of effective management is located.

Article 5. Permanent establishment.

1. For the purposes of this Agreement, the term “permanent establishment” means any fixed place of business in which the activity of the undertaking takes place, in whole or in part.

2. In particular, the following shall be considered a permanent establishment:

(a) A management headquarters.

(b) A branch office.

(c) One office.

(d) One factory.

(e) A workshop; and

(f) A mine, an oil or gas well, a quarry or any other natural resource extraction site.

3. The term “permanent establishment” shall also include:

(a) Work, construction or installation or assembly project, or inspection activities related thereto, but only where such work, construction or activities continue for a period exceeding six months.

(b) The provision of services by an enterprise, including the services of consultants, through its employees or personnel engaged by the enterprise for that purpose, but only in the event that such activities continue (in connection with the same project or a related project) in the country for a total period or periods exceeding six months, within a period of any twelve months.

(c) Mining, oil, gas exploration and any other activities relating to the exploitation of natural resources and ancillary activities, which are carried out in a Contracting State for a period exceeding six months within a period of twelve months.

4. Notwithstanding the provisions of this article, it is considered that the term <permanent establishment> does not include:

(a) The use of facilities for the sole purpose of storing or displaying goods or goods belonging to the undertaking.

(b) The maintenance of a warehouse of goods or goods belonging to the undertaking for the sole purpose of storing or displaying them.

(c) The maintenance of a deposit of goods or goods belonging to the undertaking for the sole purpose of their processing by another undertaking.

(d) The maintenance of a fixed place of business for the sole purpose of purchasing goods or goods or collecting information for the enterprise.

(e) The maintenance of a fixed place of business for the sole purpose of carrying out for the enterprise any other activity of an auxiliary or preparatory nature.

(f) The maintenance of a fixed place of business for the sole purpose of the combined exercise of the activities referred to in subparagraphs (a) to (e), provided that the whole activity of the fixed place of business retains its auxiliary or preparatory character.

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person, unless he or she is an independent representative to whom paragraph 6 applies, acts in a Contracting State on behalf of an undertaking of the other Contracting State, that undertaking shall be deemed to have a permanent establishment in the first Contracting State if the person:

(a) It has and usually exercises powers in that State to enter into contracts on behalf of that undertaking.

(b) It does not have such powers, but usually maintains in the first State the inventory of goods or goods it uses to deliver goods or goods on a regular basis on behalf of the enterprise.

An enterprise of one Contracting State shall not be considered to have a permanent establishment in the other Contracting State on the sole ground that it engages in commercial operations in that other State through a broker, a general commissioner or any other independent representative, provided that such persons act in the ordinary conduct of their business. However, where that agent carries out all or almost all of his activities on behalf of that undertaking, he shall not be regarded as an independent agent within the meaning of this paragraph. 7. The fact that a company of one of the Contracting States controls or is controlled by a corporation of the other Contracting State, or that it carries out commercial transactions in that other Contracting State, through a permanent establishment or otherwise, shall not in itself be sufficient to equate any such corporation with a permanent establishment of the other.

Article 6. Income from immovable property.

1. The income that a resident of one Contracting State obtains from immovable property situated in the other Contracting State may be taxed in that other State.

2. The term < immovable property > shall have the meaning attributed to it by the law of the Contracting State in which the property in question is situated. In any event, that term includes accessories, livestock and equipment used on agricultural and forestry holdings, rights to which the provisions of private law relating to real estate, the use of immovable property and rights to variable or fixed payments for exploitation, or the granting of exploitation, of mineral deposits, sources and other natural resources apply. Ships, vessels and aircraft are not considered real property.

3. The provisions of paragraph 1 apply to income derived from direct use, lease or shareholding, as well as from any other form of exploitation of immovable property.

4. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an undertaking and from immovable property used in the exercise of independent personal services.

Article 7. Business profits.

1. The profits of an enterprise in one Contracting State may be taxed only in that State unless the enterprise carries out its business in the other Contracting State through a permanent establishment situated in that State. If the company does so, the profits of the company may be taxed in the other State, but only to the extent that they can be attributed to this permanent establishment.

For this purpose, where an enterprise of one Contracting State engages in activities in the other Contracting State through a permanent establishment situated therein, it shall be attributable to it, in addition to the profits derived from sales or activities carried out by the permanent establishment itself:

(a) Sales in that other State of goods or goods of the same or similar type as those sold through that permanent establishment; and

(b) The income from commercial activities carried out in that other State as long as they are identical or similar in nature to those carried out through the said permanent establishment.

2. Without prejudice to paragraph 3, where an undertaking of one Contracting State carries out its business in the other Contracting State by means of a permanent establishment situated therein, in each Contracting State the profits it could have obtained from being a separate undertaking carrying out the same or similar activities, under the same or similar conditions, shall be attributed to that establishment and shall deal entirely independently with the undertaking from which it is a permanent establishment.

3. For the purpose of determining the benefit of the permanent establishment, the deduction of expenses incurred for the realization of the purposes of the permanent establishment, including management and general administrative expenses for the same purposes, shall be permitted, whether incurred in the State in which the permanent establishment is located or elsewhere.

4. No benefit shall be attributed to a permanent establishment merely because it buys goods or goods for the undertaking.

5. Likewise, profits obtained by an undertaking of one Contracting State from the conduct of the insurance or reinsurance activity, covering goods located in the other Contracting State or persons resident in that other State at the time of the conclusion of the insurance contract, shall be taxable in that other State, whether the undertaking carries out its activity in that other State through a permanent establishment there situated, or otherwise, provided that, in the latter case, the person making the payment of the premium is resident of that other State. In this case, in the case of profits from reinsurance operations, the tax payable in that other State may not exceed 2,5 per 100 of the gross amount of the premium.

6. For the purposes of the preceding paragraphs, the profits attributable to the permanent establishment shall be calculated each year by the same method, unless there are valid and sufficient grounds for proceeding otherwise.

7. Where profits include income covered separately by other articles of this Convention, the provisions of those articles shall not be affected by those of this Article.

Article 8. Shipping and air transport.

1. Profits from operating ships or aircraft under international transport may be taxed only in the Contracting State in which the effective headquarters of the company is located.

2. If the place of effective management of a shipping company is on board a ship, it shall be deemed to be in the Contracting State where the base port of the ship is located, and if there is no such base port, in the Contracting State in which the person operating the ship resides.

3. The provisions of paragraph 1 shall also apply to profits arising from participation in a <pool >, on a joint holding or in an international holding body.

4. In this article, the term benefits includes:

(a) income from the operation of ships or aircraft in international transport;

(b) interest generated by funds connected with the operation of ships and aircraft in international transport; and

(c) revenue from the rental of ships, aircraft, containers and equipment used by an undertaking in international transport, provided that such revenue is incidental to such transport.

Article 9. Associated enterprises.

1. When:

(a) An undertaking of a Contracting State participates, directly or indirectly, in the direction, control or capital of an undertaking of the other Contracting State; or

(b) the same persons participate, directly or indirectly, in the direction, control or capital of an undertaking of one Contracting State and of an undertaking of the other Contracting State

and, in either case, the two companies are, in their commercial or financial relations, bound by terms, accepted or imposed, which differ from those to be agreed by independent undertakings, the profits that would have been obtained by one of the companies in the absence of these conditions, but which in fact have not occurred because of them, may be included in the profits of that undertaking and subject to taxation accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that State - and the serious profits accordingly - the profits on which an enterprise of the other Contracting State has been taxed, and the profits thus included are profits that would have been borne by the enterprise of the first State if the conditions established between the two companies had been those that would govern between independent enterprises, that other State shall appropriately adjust the amount of the tax on those profits. The other provisions of the Convention shall be duly taken into account in determining such adjustment, and the competent authorities of the Contracting States shall consult each other, where necessary.

Article 10. Dividends.

1. Dividends paid by a company resident of one Contracting State to a resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State in which the company paying the dividends resides and in accordance with the law of that State, but if the preceptor of the dividends is the beneficial owner, the tax thus required may not exceed:

(a) 10 per cent of the gross amount of dividends if the beneficial owner is a company (excluding companies of persons) holding directly at least 25 per cent of the capital of the company paying the dividends;

(b) 15 per 100 of the gross amount of dividends in other cases.

This paragraph does not affect the company's taxation of profits from which dividends are paid.

3. The term <dividends> used in this article means the returns of the shares or enjoyment bonds, of the parties of founder and other rights, except credit rights, that allow to participate in the profits, as well as the income of other social participations subject to the same tax regime as the income of the shares by the law of the State in which the company that distributes them resides.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, resident in one Contracting State, exercises in the other Contracting State, of which the company paying the dividends is resident, an industrial or commercial activity through a permanent establishment located in that other State, or provides independent work through a fixed base situated therein, with which the share generated by the dividends is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

5. Where a company resident of one Contracting State obtains profits or income from the other Contracting State, that other State may not require any tax on dividends paid by the company except to the extent that these dividends are paid to a resident of that other State or the share generated by the dividends is effectively linked to a permanent establishment or a fixed base situated in that other State, nor subject the undistributed profits of the company to a tax on them, even if the dividends paid or the undistributed profits consist, in whole or in part, of profits or income from that other State.

Article 11. Interest.

1. Interest from one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, these interests may also be subject to taxation in the Contracting State from which they arise and in accordance with the law of that State, but if the recipient of the interest is the beneficial owner, the tax thus required may not exceed 12.5 per cent of the gross interest tax.

3. Notwithstanding the provisions of paragraph 2, interest originating in one of the Contracting States shall be exempt from taxation in that State if:

(a) The debtor of interest in that State or one of its political or administrative subdivisions, or one of its local authorities;

(b) interest is paid to the Government of the other Contracting State or to one of its local authorities or to an institution or body (including financial institutions) wholly belonging to that Contracting State or to one of its local authorities; or

(c) interest is paid to other institutions or agencies (including financial institutions) on the basis of financing agreed upon with them in the framework of agreements concluded between the Governments of the two Contracting States and provided that the time limit for such agreements is not less than five years;

(d) interest is paid in connection with sales of industrial, commercial or scientific equipment.

4. The term <interest > used in this article means the income from claims of any kind, with or without a mortgage guarantee or benefit-sharing clause of the debtor, and in particular income from public funds and bonds or bonds, as well as any other benefit assimilated to the income from sums lent under the tax law of the State from which the income comes.

5. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the resident interest of a Contracting State exercises an industrial or commercial activity in the other Contracting State from which the interest originates through a permanent establishment located in that other State or provides independent professional services through a fixed base situated therein, and the credit generated by the interest is effectively linked to:

(a) this permanent establishment or fixed base; or

(b) the commercial activities referred to in Article 7(1)(b).

In such cases, the provisions of Article 7 or Article 14, as appropriate, shall apply.

6. Interests are considered to come from a Contracting State when the debtor is the State itself, a political or administrative branch, a local community or a resident of that State. However, where the debtor of interest, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis in respect of which the debt giving rise to the payment of the interest and bearing the burden of the interest has been incurred, the interest is regarded as originating in the State where the permanent establishment or fixed base is located.

7. Where, on account of the special relations between the debtor and the beneficial owner of the interest or the interest between them and third parties, the amount of interest paid, taking into account the claim for which it is paid, exceeds that agreed upon by the debtor and the creditor in the absence of such relations, the provisions of this article apply only to the latter amount. In this case, the surplus may be taxed in accordance with the law of each State, taking into account the other provisions of this Convention.

Article 12. Royalties.

1. Royalties or royalties from one Contracting State and paid to a resident of another Contracting State may be taxed in that other State.

2. However, such royalties or royalties may be subject to taxation in the Contracting State from which they come, and in accordance with the law of that State, but if the recipient of the royalties or royalties is the beneficial owner, the tax thus required may not exceed:

(a) 3 per 100 of the gross amount paid for the use or granting of the use of news;

(b) 5 per cent of the gross amount paid for the use or granting of copyright on literary, theatrical, musical or artistic works;

(c) 10 per cent of the gross amount paid for the use or grant of patents, designs and models, plans, formulas or secret procedures, commercial, industrial or scientific equipment, or for information relating to industrial, commercial or scientific experience, as well as for the provision of technical assistance services;

(d) 15 per cent of the gross amount of royalties or royalties in other cases.

3. The term royalties or royalties used in this article means the amounts of any kind paid for the use or use of news, copyrights on literary, theatrical, musical, artistic or scientific works, including cinematographic films, recorded magnetic tapes, video and audio tapes, radio and television and any other means of projection, reproduction or dissemination of images or sounds, patents, trademarks, designs or models, plans, formulas or secret procedures, as well as for the use or granting of use of industrial, commercial or scientific equipment, as well as for information relating to industrial, commercial or scientific experiences and for the provision of technical assistance services.

4. Paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or royalties, resident in one Contracting State, carries out commercial transactions in the other Contracting State from which the royalties or royalties originate, through a permanent establishment situated therein, or provides in that other State independent personal services from a fixed base situated therein, and the right or property for which the royalties or royalties are paid is effectively linked to:

(a) that permanent establishment or fixed base, or

(b) the commercial activities referred to in Article 7(1)(b).

In such cases, the provisions of Article 7 or Article 14 shall apply as appropriate.

5. Royalties or royalties are considered to come from a Contracting State where the debtor is the State itself or one of its political subdivisions or local entities, or a resident of that State. However, where the debtor of the royalties or royalties, whether or not resident of a Contracting State, has in one of the Contracting States a permanent establishment or a fixed basis in respect of which the obligation to pay the royalties or royalties has been incurred and bears the burden thereof, the royalties or royalties shall be deemed to be from the State where the permanent establishment or fixed base is situated.

6. Where, by reason of the special relations between the debtor and the beneficial owner of the royalties or royalties or of which both maintain with third parties, the amount of royalties or royalties paid, taking into account the benefit for which they are paid, exceeds that agreed upon by the debtor and the beneficial owner in the absence of such relationships, the provisions of this article apply only to the latter amount. In this case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

Article 13. Capital gains.

1. Profits that a resident of a Contracting State obtains in the disposal of immovable property referred to in article 6 and situated in the other Contracting State may be subject to taxation by that State.

2. Gains from the disposal of movable property forming part of the assets of a permanent establishment held by an enterprise of one Contracting State in the other Contracting State, or from movable property belonging to a fixed basis held by a resident of one Contracting State in the other Contracting State for the provision of independent personal services, including gains from the disposal of that permanent establishment (only or with the enterprise as a whole) or from this fixed basis, may be taxed in that other State.

3. Profits arising from the disposal of ships or aircraft operated in international transport, or movable property affected by the specific turn of operation of such vessels or aircraft, may be taxed only in the Contracting State where the effective head office of the undertaking is located.

4. Profits arising from the disposal of shares or shares in the capital or assets of a company resident in a Contracting State may be taxed in that State. However, the tax thus required may not exceed:

(a) 10 per cent of the profit in the case of a direct participation in the capital of at least 25 per 100;

(b) 15 per cent of the profit in other cases.

5. Capital gains not covered by the preceding paragraphs may be taxed in both Contracting States in accordance with their respective domestic laws.

Article 14. Independent personal services.

1. Incomes obtained by a resident of a Contracting State in respect of professional services or other independent activities carried out in the other Contracting State may be taxed in the latter State, but the tax payable shall not exceed 10 per cent of the gross amount received for such services or activities, except in the case where that resident has a fixed base in the other Contracting State for the purpose of carrying out his activities. In the latter case, such income shall be subject to taxation in that other State in accordance with its domestic law, to the extent that it can be attributed to that fixed base.

2. The expression <personal services> includes independent, scientific, literary, artistic, educational or teaching activities, as well as independent activities of doctors, lawyers, engineers, architects, dentists and accountants.

Article 15. Dependent personal services.

1. Without prejudice to articles 16, 18 and 19, salaries, wages and other remunerations obtained by a resident of a Contracting State on account of employment may be subject to taxation in that State only, unless the employment is exercised in the other Contracting State. In the latter case, the remuneration received for this purpose may be subject to taxation in the other State.

2. By way of derogation from paragraph 1, remunerations obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may only be taxed in the first State if:

(a) The recipient remains in the other State for one or more periods not to exceed a total of one hundred and eighty-three days for a period of twelve consecutive months;

(b) remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

(c) Remuneration is not borne by a permanent establishment or a fixed basis which the employer has in the other State.

3. Notwithstanding the foregoing provisions of this article, remunerations earned on the basis of employment on board a ship or aircraft operated in international transport may be taxed in the Contracting State where the effective management seat of the undertaking is located.

Article 16. Directors’ fees and board members’ remuneration.

The fees of directors, attendance allowances and other similar remunerations which a resident of a Contracting State obtains as a member of the board, board of directors or supervisory board of a company resident of the other Contracting State may be subject to taxation in that other State.

Article 17. Entertainers and sportspersons.

1. Notwithstanding the provisions of articles 14 and 15, income earned by a resident of a Contracting State from his or her personal activity in the other Contracting State in his or her capacity as a performer, theatre, film, radio or television actor, or musician, or as an athlete, may be subject to taxation in that other State.

2. Notwithstanding the provisions of Articles 7, 14 and 15, where the income derived from the activities carried out by an artist or athlete personally and as such is attributed, not to the artist himself or to the athlete, but to another person, such income may be subject to taxation in the Contracting State in which the activities of the artist or athlete are carried out.

3. The provisions of paragraph 1 shall not apply if the visit of the performing professionals or sportsmen of a Contracting State is fully or substantially covered by public funds of the other Contracting State, a province, a political or administrative subdivision, or a local entity of the latter State.

Article 18. Pensions, pensions, annuities and maintenance.

1. Pensions and pensions paid to a resident of a Contracting State may only be taxed in that State.

2. The provisions of the preceding paragraph shall also apply to benefits received by beneficiaries of pension funds or other alternative schemes.

3. Annuities paid to a resident of a Contracting State may be taxed only in that State. The term "annuality" means a prefixed sum to be paid periodically in times established throughout a person ' s life or for a specified or determinable period of time in exchange for the payment of an appropriately equivalent amount in money or in a sign representing it.

4. Maintenance payments paid to a resident of a Contracting State may be subject to taxation only in that State. The term “alimony pensions”, as used in this subparagraph, means periodic payments made under a written separation agreement, a separation or divorce judgment, or compulsory aid, in respect of which the recipient is subject to taxation under the laws of the State of which he is resident.

5. Periodic payments for the maintenance of underage children pursuant to a written separation agreement, a separation or divorce decision, or compulsory aid, made by a resident of a Contracting State to a resident of the other Contracting State, may only be subject to taxation in the Contracting State referred to in the first instance.

Article 19. Government service.

1. (a) Remuneration, excluding pensions, paid by a Contracting State or one of its political subdivisions or local entities to a natural person for services rendered to that State or to that subdivision or entity, may only be subject to taxation in that State.

(b) However, such remuneration may be subject to taxation in the other Contracting State only if the services are provided in this State and the natural person is a resident of this State who:

(i) possesses the nationality of this State; or

(ii) has not acquired the status of resident of this State solely to provide the services.

(a) Pensions paid by a Contracting State or by one of its political subdivisions or local entities, either directly or from constituted funds, to a natural person on account of services rendered to that State or to that subdivision or entity, may only be subject to taxation in that State.

(b) However, such pensions may be subject to taxation in the other Contracting State only if the natural person is a resident and a national of that State.

3. Articles 15, 16 and 18 apply to remuneration and pensions paid for services rendered within the framework of an industrial or commercial activity carried out by a Contracting State or one of its political subdivisions or local entities.

Article 20. Teachers and students.

1. A natural person who is, or was in the period immediately preceding his visit to a Contracting State, resident of the other Contracting State, and who, at the invitation of a university, higher education institution, school or other official institution of the first Contracting State, visits that Contracting State for the sole purpose of teaching or conducting investigations in such institutions for a period not exceeding one year, shall be exempt from taxation in that first Contracting State in respect of the remuneration he receives as a result of such activities.

2. Amounts received by a student or a person engaged in internships, who is or has been a resident of a Contracting State in the immediate period prior to his arrival in the other Contracting State, to cover his or her maintenance, study or practical expenses in that other Contracting State and who is in that other Contracting State for the sole purpose of continuing his or her studies or training, may not be subject to taxation in that other State provided that such amounts come from sources outside that other State.

3. Paragraph 1 does not apply to remunerations that a person obtains for carrying out investigations if they are carried out primarily for the particular benefit of a person or persons.

Article 21. Other income.

1. The income of a resident of a Contracting State not covered by the earlier articles of this Convention originating in the other Contracting State may be taxed in the State referred to in the last term.

2. The remaining income of a resident of a Contracting State not covered by earlier articles of this Convention may be taxed only in that State.

3. Paragraph 2 does not apply to income, excluding income derived from property defined as immovable in Article 6(2), where the beneficiary of such income, resident of a Contracting State, engages in an industrial or commercial activity in the other Contracting State through a permanent establishment situated therein or provides professional services through a fixed base equally situated therein, to which the right or ownership for which the income is paid is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

Article 22. Capital.

1. Property consisting of immovable property referred to in article 6, owned by a resident of one Contracting State and located in the other Contracting State, may be taxed in that other State.

2. Property consisting of movable property forming part of the assets of a permanent establishment held by an enterprise of one Contracting State in the other Contracting State, or of movable property belonging to a fixed basis which a resident of one Contracting State has in the other Contracting State for the provision of independent personal services, may be subject to taxation in that other State.

3. Assets consisting of ships or aircraft operated in international transport, as well as movable property affected by the operation of such ships or aircraft, may be taxed only in the Contracting State in which the effective head office of the undertaking is located.

4. Assets consisting of shares or shares in the capital or assets of a company may be taxed only in the Contracting State of which the holder is resident.

5. The assets not provided for in the preceding paragraphs may be subject to taxation by both States in accordance with their respective domestic laws.

Article 23. Methods to avoid double taxation.

1. In the case of Spain, double taxation shall be avoided, in accordance with the applicable provisions contained in Spanish legislation, as follows:

(a) (i) Where a resident of Spain obtains income or possesses assets which, under the provisions of this Agreement, may be taxed in the Argentine Republic, Spain shall allow the deduction of income tax or capital of that resident from an amount equal to the tax actually paid in the Argentine Republic.

(ii) In the case of royalties or royalties referred to in Article 12 (2) (c), for the purposes of applying the provisions of this subparagraph, a tax of 15 per 100 of the gross amount of royalties or royalties shall be deemed to have been satisfied in the Argentine Republic provided that they are paid by a company resident of the Argentine Republic which does not, directly or indirectly, detain more than 50 per cent of the capital of a company resident of a third State, nor is it similarly controlled by a company resident of a third State.

(iii) For the purposes of this subparagraph, it is understood that the tax actually paid in the Argentine Republic is that which would have been paid in accordance with the Convention if it had not been reduced or exonerated in application of specific rules aimed at promoting the industrial development that the Argentine Republic introduces in its tax legislation, subject to agreement with the effect of the Governments.

However, the deduction applicable under this paragraph may not exceed the part of the income or property tax, calculated before the deduction, corresponding to the income obtained in the Argentine Republic.

(b) In the case of dividends paid by a company resident in the Republic of Argentina to a company resident in Spain and directly holding at least 25 per cent of the capital of the company paying the dividends, the tax actually paid by the company in question in respect of the profits from which the dividends are paid, in addition to the amount deductible under subparagraph (a) of this subparagraph, shall be taken into account for the determination of the tax credit, in the amount corresponding to such dividends, provided that the amount is included, for this purpose, in the taxable basis of the company receiving the dividends.

Such deduction, together with the deduction applicable in respect of dividends pursuant to subparagraph (a) of this paragraph, may not exceed the part of the income tax, calculated before the deduction, attributable to income subject to taxation in the Argentine Republic.

In order to implement the provisions of this subparagraph, the participation in the paying company of the dividends shall be maintained continuously during the two years preceding the day on which the dividends are paid.

2. In the Argentine Republic double taxation shall be avoided, in accordance with the limitations of its existing legislation:

The Argentine Republic shall recognize a resident of the country, as a credit against his national income tax, the appropriate amount of tax actually paid in Spain. The appropriate amount will be based on the amount of tax actually paid in Spain, but the credit will not exceed the amount (for the purpose of charging the tax credit to the income of the Argentine Republic for income from sources outside Argentina) provided for in Argentine legislation for the fiscal year.

Article 24. Non-discrimination.

1. Nationals of one Contracting State shall not be subject in the other Contracting State to any taxes or obligations relating thereto which are not or are more burdensome than those to which nationals of that other State who are under the same conditions, particularly with regard to residence, are or may be subject. Notwithstanding article 1, this provision also applies to nationals of any of the Contracting States who are not residents of any of them.

2. Permanent establishments held by an enterprise of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings of that other State carrying out the same activities. This provision cannot be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, allowances and tax reductions it grants to its own residents in view of their marital status or family burdens.

3. Unless the provisions of Article 9, Article 11(7) or Article 12(6) apply, interest, royalties or other expenses paid by an undertaking of one Contracting State to a resident of the other Contracting State are deductible to determine the profits subject to taxation of that undertaking under the same conditions as if they had been paid to a resident of the first Contracting State. Similarly, the debts of an enterprise of one Contracting State relating to a resident of the other Contracting State are deductible for the determination of the taxable assets of that enterprise under the same conditions as if they had been contracted with a resident of the former State.

4. Enterprises of a Contracting State whose capital is, in whole or in part, directly or indirectly detained or controlled by one or more residents of the other Contracting State are not subject in the first State to any tax or obligation relating thereto which is not or is more burdensome than those to which other similar undertakings of the first Contracting State are or may be subject.

5. Notwithstanding the provisions of Article 2, the provisions of the Article apply to all taxes, whatever their nature or name.

Article 25. Mutual agreement procedure.

1. Where a person considers that the measures taken by one or both Contracting States imply or may entail for him an imposition that is not in conformity with the provisions of this Convention, irrespective of the remedies provided for by the domestic law of those States, he may submit his case to the competent authority of the Contracting State of which he is resident or, if Article 24 (1) applies, to that of the Contracting State of which he is a national. The case shall be brought within three years of the first notification of the measure involving an imposition not in accordance with the provisions of the Convention.

2. The competent authority shall, if it finds the complaint well founded and if it is not in a position to adopt a satisfactory solution, make every effort to resolve the matter through an amicable agreement with the competent authority of the other Contracting State in order to avoid an imposition not in conformity with this Convention. The agreement applies irrespective of the time limits laid down by the national law of the Contracting States.

3. The competent authorities of the Contracting States shall endeavour to resolve difficulties or to dispel any doubts arising from the interpretation or application of the Convention through an amicable agreement. They may also agree to try to avoid double taxation in cases not covered by the Convention.

4. The competent authorities of the Contracting States may communicate directly with each other in order to reach an agreement as set out in the preceding paragraphs. Where it is considered that such an agreement can be facilitated through personal contacts, the exchange of views may take place within a committee composed of representatives of the competent authorities of the Contracting States.

Article 26. Exchange of information.

1. The competent authorities of the Contracting States shall exchange the information necessary to implement the provisions of this Convention, or of the national law of the Contracting States relating to taxes covered by the Convention, to the extent that the taxation required by that Convention is not contrary to the Convention. The exchange of information is not limited by Article 1. Information received by a Contracting State shall be kept secret in the same way as information obtained under the domestic law of that State and shall be communicated only to persons or authorities (including courts and administrative bodies) responsible for the management or collection of taxes covered by the Convention, to declaratory or executive procedures relating to such taxes or to the resolution of appeals relating to such taxes. These persons or authorities will only use these reports for these purposes. They may disclose such information in public hearings of the courts or in court judgements.

2. In no case may the provisions of paragraph 1 be interpreted as obliging a Contracting State to:

(a) To take administrative measures contrary to its legislation or administrative practice or those of the other Contracting State;

(b) Provide information that cannot be obtained on the basis of its own legislation or in the exercise of its normal administrative practice or that of the other Contracting State; and

(c) Provide information revealing a commercial, industrial or professional secret, or a commercial procedure or information whose communication is contrary to public policy.

Article 27. Diplomatic and consular officials.

The provisions of this Convention do not affect the tax privileges enjoyed by diplomatic agents or consular officials, in accordance with the general principles of international law or under special agreements.

Article 28. Entry into force.

1. This Convention shall be ratified, and the instruments of ratification shall be exchanged as soon as possible.

2. The Convention shall enter into force on the basis of the exchange of instruments of ratification and its provisions shall apply:

(a) With regard to source taxes on amounts paid to non-residents, from the first day of January following the date on which the Convention enters into force; and

(b) In respect of other taxes, for tax years beginning on the first day of January following the date on which the Convention enters into force.

Article 29. Termination.

This Convention shall remain in force until it is denounced by one of the Contracting States. Any Contracting State may denounce the Convention through diplomatic channels, at least six months before the end of each calendar year, after the end of a period of five years from the date of its entry into force. In such a case, the Convention shall cease to have effect:

(a) In relation to taxes at source on amounts paid to non-residents, from the first day of January following the date of notification of the complaint; and

(b) In respect of other taxes, for tax years beginning on the first day of January following the date of notification of the complaint.

In faith, the signatories, duly authorized to do so, have signed this Convention.

Done at Madrid, 21 July 1992, in two originals in English, both texts being equally authentic.

For the Kingdom of Spain,

Javier Solana Madariaga,

Minister for Foreign Affairs

For the Argentine Republic,

Guido José Mario di Tella,

Minister for Foreign Affairs,

International Trade and Worship