A proposal seeks to withdraw tax benefits from Chilean companies following the return of the Punta Arenas–Malvinas route

Deputy Guillermo Michel introduced a bill to withdraw tax benefits from Chile Guillermo Michel, a national deputy for Entrerrian Peronism, introduced a bill proposing that the National Executive Branch denounce —that is, formally notify its withdrawal from— two bilateral agreements that currently grant fiscal and tax benefits to Chilean companies operating on Argentine soil. The legislator's initiative arises from the resumption of the Punta Arenas–Malvinas commercial route. "The return of that route, with the first voyage of the Danstar vessel, flying the Chilean flag and owned by the shipping company Easter Island Naviera, scheduled for November to supply the inhabitants of the Islands and reestablish a regular commercial service with Puerto Argentino, is a concrete demonstration of Chile's lack of solidarity with the Malvinas cause," Michel stated. The bill urges the Executive Branch, through the Ministry of Foreign Affairs, International Trade and Worship, to denounce two legal instruments. The first is the Treaty on Reciprocal Promotion and Protection of Investments signed between the Argentine Republic and the Republic of Chile, approved by Law 24,342. The second is the Convention between the Argentine Republic and the Republic of Chile to Eliminate Double Taxation with respect to Taxes on Income and Capital and to Prevent Tax Evasion and Avoidance, approved by Law 27,274. The resumption of the commercial route between Punta Arenas and Malvinas with the Danstar vessel motivated the legislative initiative Denouncing a treaty is the formal notification by which a State communicates its decision to withdraw from that agreement, without this implying breaking diplomatic relations with the other country. Both agreements, while they remain in force, establish caps on the withholdings applicable to payments of income derived from dividends, interest and royalties that Chilean companies obtain in Argentina. In the findings, Michel recalled that Argentina maintains a sovereignty dispute with the United Kingdom regarding the Malvinas, South Georgia and South Sandwich Islands and the surrounding maritime areas, and that, despite this, London continues to promote and authorize economic activities and natural resource exploitation in areas subject to that dispute, without Argentine authorization. "Our country must sustain the defense of sovereignty over the Malvinas Islands, their territory and natural resources. Furthermore, it cannot ignore the actions of countries that call themselves brothers, but that provide logistical support to the illegal actions of companies in that Argentine territory," the legislator argued. The bill requests that the Executive denounce the investment treaty and the double taxation convention with Chile The bill states that the country has instruments to protect its sovereign rights. In particular, Law 26,659 —later amended by Law 26,915— established a regime of prohibitions and sanctions for individuals and legal entities that carry out hydrocarbon exploration and exploitation activities on the Argentine Continental Platform without authorization from the competent authority. On that framework, the bill argues that the National Government's recent decision to resume the application of that regime against the hydrocarbon activities it considers illegitimate must be accompanied by a comprehensive policy toward the United Kingdom, which also covers the economic and tax instruments that structure the bilateral relationship with that country and with others that, according to the legislator, act against the national strategy on sovereignty. The denunciation of these instruments would mean that companies based in Chile that invest or generate income in Argentine territory would lose the tax advantages currently in force. "If Chile decides to do business illegally in Malvinas, it cannot have economic and fiscal benefits from Argentina for its investments in our country. They have to decide. The proposal is reasonable; the aim is not to break dialogue or diplomatic relations. But neither can our country maintain economic and fiscal advantages for Chile if it continues to go against the Malvinas cause," Michel maintained.