Tax Treaty Case Law around the Globe 2018

S. 373Chapter 31 Argentina: Non-Discrimination – Pirelli Neumáticos SAIC Case

Mirna Solange Screpante

31.1. Introduction

The Pirelli Neumáticos SAIC case questions whether royalty payments made by a resident company, Pirelli Neumaticos SAIC (hereinafter Pirelli Argentina), to a non-resident company, Pirelli Pneumatici SpA (hereinafter Pirelli Italy) should be deductible based on article 25(3) of the Argentina-Italy Income and Capital Tax Treaty (1979) (hereinafter Argentina-Italy double tax convention (DTC) or the treaty) if the agreement concerning those royalty payments has not been registered timely before the Directorate of Technology Transfer of the National Institute of Industrial Property (INPI) in accordance with articles 1, 2 and 9 of Law 22,426 of Transfer of Technology (LTT) and articles 17 and 80 of the Income Tax Law (ITL).

In May 2017, the Supreme Court confirmed the ruling issued by the Federal Contentious and Administrative Chamber of Appeals validating the deduction of royalty payments made by Pirelli Argentina to Pirelli Italy, regardless of the fact that contracts were not registered in time with the INPI. The Supreme Court correctly interpreted that the non-deductibility ...