Gov’t, Chile agree deal to end ‘double taxation’
Argentina and Chile yesterday announced the implementation of a long-awaited agreement to eliminate double taxation for residents of both countries in order to encourage investment and prevent tax evasion.
Chile’s Foreign Minister Heraldo Muñoz, Public Works Minister Alberto Undurraga, and Finance Minister Rodrigo Valdés met with Argentina’s Finance Minister Alfonso Prat-Gay and Transportation Minister Guillermo Dietrich alongside Argentina’s ambassador to Chile José Octavio Bordon and his counterpart José Antonio Viera-Gallo.
The officials said that once the treaty is implemented on January 1, 2017 “there will be a framework of clear rules to promote the development of commercial activities, services and investment between the two countries.”
The treaty will eliminate double taxation on capital tax and capital gains tax for residents in one or both nations, the Ministry of Treasury and Public Finances said in a statement.
Speaking after their meeting yesterday, Prat-Gay and Valdés both stressed that the treaty “provides a framework of clear rules.”
“This is an important step in the process of integration between our two sister nations. Taking advantage of our cohesion will result in more, better quality jobs on both sides of the (Andes),” Prat-Gay said.
Valdés added that “eliminating the barriers caused by double taxation will usher in a greater flow of investment, trade, services and technologies between our countries that gives businesses the tax certainty they need, within a structure of legal certainty and respect for the principles of market competition, balanced public finances and protection of taxpayers’ rights.”
The agreement, which was signed on May 15 of last year, is based on a model developed by the Organization for Economic Co-operation and Development (OECD).
Another objective of the agreement is “to promote the exportation of services and facilitate the interchange of technology and knowledge. And to bring stability and certainty to taxpayers regarding their total tax burden and the interpretation and application of legislation affecting them,” according to the ministry statement.
It also establishes “mechanisms to help prevent tax evasion through cooperation between the tax administrations of both countries.”
Agua Negra tunnel advances
In another project to improve links between the two nations, Chilean and Argentine authorities yesterday began the process of vetting the companies that have applied to construct the 13.9-kilometre-long Agua Negra tunnel between San Juan province and Chile’s Coquimbo region, an investment of an estimated US$1.48 billion dollars.
Dietrich said the tunnel “is important for two regions of our countries and brings to a head a deepening territorial integration.”
The project is a key part of the Bi-Oceanic Corridor, from Porto Alegre on Brazil’s Atlantic coast to Coquimbo on Chile’s Pacific coast, which is estimated to add a total of US$252 billion to the regional GDPs of Argentina, Chile and Brazil.