As part of the OECD’s ongoing efforts to address international tax avoidance and improve coherence in cross-border taxation, Argentina recently took a significant step forward in the process of adopting the Multilateral Instrument (MLI). On 7 May 2025, the Senate approved the ratification of the MLI following approval by the Chamber of Deputies in October 2024.
The MLI, established following negotiations with over 100 jurisdictions, is a convention that allows countries to modify their existing tax treaties to include measures developed under the OECD project to prevent base erosion and profit shifting.
The implementation of the MLI will affect how multinational enterprises assess structures and transactions under tax treaties. Key provisions are the principal purpose test and an expanded definition of permanent establishment, which aim to curb treaty abuse and aggressive tax planning strategies that exploit mismatches and loopholes in domestic tax systems.
To enter into force in Argentina, the MLI law still must be promulgated by the Executive Branch and published in the official gazette. Once these steps are completed, Argentina must deposit the instrument of ratification with the OECD. The MLI will become effective on the first day of the fourth month following the date of deposit.
While the legislative ratification represents meaningful progress, multinational enterprises still should monitor developments closely and begin evaluating potential impacts on existing treaty-based structures, assuming the MLI could begin to apply as early as 2026 or 2027, depending on the date of Argentina’s formal deposit with the OECD.
Alejandra Sarni
BDO in Argentina
The MLI, established following negotiations with over 100 jurisdictions, is a convention that allows countries to modify their existing tax treaties to include measures developed under the OECD project to prevent base erosion and profit shifting.
The implementation of the MLI will affect how multinational enterprises assess structures and transactions under tax treaties. Key provisions are the principal purpose test and an expanded definition of permanent establishment, which aim to curb treaty abuse and aggressive tax planning strategies that exploit mismatches and loopholes in domestic tax systems.
To enter into force in Argentina, the MLI law still must be promulgated by the Executive Branch and published in the official gazette. Once these steps are completed, Argentina must deposit the instrument of ratification with the OECD. The MLI will become effective on the first day of the fourth month following the date of deposit.
While the legislative ratification represents meaningful progress, multinational enterprises still should monitor developments closely and begin evaluating potential impacts on existing treaty-based structures, assuming the MLI could begin to apply as early as 2026 or 2027, depending on the date of Argentina’s formal deposit with the OECD.
Alejandra Sarni
BDO in Argentina