The Brazilian and Argentine governments signed a protocol during the Mercosur Summit to eliminate double taxation in trade and services between the two countries.

According to the Federal Revenue of Brazil, the measure seeks to encourage investments and strengthen bilateral relations, and reflects the efforts of the federal government to modernise its tax agreements.

The protocol brings important improvements to the agreement by establishing previously non-existent limits on the level of taxation at source in specific categories of income, modifying the method to avoid double taxation on the Argentine side, and including a specific article to deal with taxes on capital gains.

The goal is to encourage reciprocal productive investment flows between the two countries and strengthen bilateral trade relations while combating tax evasion and the possibilities for misuse of the treaty.