Let’s Connect: Unlocking Tax Treaties for Smarter Growth in LatAm

By Felipe Mac-Conell Osses, Lawyer

As part of our Let’s Connect Cross-Border Tax campaign for the new financial year in Australia, we’re reconnecting with clients to highlight key structuring and compliance opportunities. One of the most powerful (and often underutilised) tools is the Double Taxation Agreement (DTA). These treaties are essential for avoiding overlapping tax obligations and unlocking real tax efficiencies across borders. While Australia has 47 DTAs in force globally, only three cover Latin American countries: Argentina, Mexico, and Chile. In contrast, countries like Chile and Peru have expanded their treaty networks significantly, offering greater flexibility for regional structuring.

Australia’s DTA Framework

Australia’s tax treaties are bilateral instruments that limit the taxing rights of the signatory countries to prevent double taxation and reduce cross-border tax barriers. These agreements establish thresholds for source taxation, define residence-based rights, and provide mechanisms to resolve interpretative conflicts between tax authorities.

Current DTAs in Force with Latin America

These agreements follow the OECD model and include provisions on permanent establishment, withholding tax limits, capital gains, tax credits.

Chile and Peru: Treaty Hubs in the Region

Chile

Chile currently has 33 DTAs in force, including with major capital-exporting countries such as the United States, United Kingdom, Canada, and Australia. Within Latin America, Chile has treaties with Argentina, Brazil, Colombia, Ecuador, Mexico, Paraguay, Peru, and Uruguay. This broad network supports its role as a platform for regional investment, holding structures, and service delivery.

Peru

Peru currently has 11 tax treaties in force, including several with Latin American partners. Within the region, it maintains DTAs with Chile, Brazil and Mexico. It also benefits from two multilateral instruments: the Andean Community agreement, which includes Bolivia, Colombia and Ecuador, and the Pacific Alliance Convention, which links Chile, Colombia, Mexico and Peru.

This combination of bilateral and multilateral mechanisms positions Peru as an increasingly attractive jurisdiction for structuring cross-border flows within Latin America.

Strategic Takeaways

For Australian companies operating, or planning to expand, in Latin America, DTAs offer:

• Lower withholding tax rates on outbound payments (dividends, interest, royalties), improving cash flow and reducing tax costs.
• Certainty on permanent establishment exposure, helping avoid unexpected income tax liabilities in foreign jurisdictions.
• Limits on taxing rights between jurisdictions, helping ensure that income is only taxed once and reducing the risk of overlapping tax claims.
• Dispute resolution under MAP, offering protection against double taxation or aggressive local assessments.
• Structuring opportunities through jurisdictions like Chile or Peru, which act as treaty-accessible gateways to broader Latin American markets.

By aligning operations with a treaty jurisdiction, businesses can unlock meaningful tax efficiencies, reduce audit risk, and ensure better alignment with OECD-compliant international tax standards.

Conclusion

Australia’s tax treaty coverage in Latin America is limited but offers meaningful benefits where in force. For companies with broader regional ambitions, Chile and Peru provide significantly more integrated and strategically positioned treaty networks. These jurisdictions stand out not only for their legal clarity but for their practical value in regional tax planning.

At Harris Gómez Group, we work with clients to translate complex treaty frameworks into reliable, structured strategies. Whether you’re entering new markets or optimising existing operations, choosing the right jurisdiction can offer lasting legal stability and measurable tax efficiency.

As we kick off the new financial year, now is the perfect time to revisit your cross-border structure. Whether you’re expanding into Latin America or reassessing current operations, our team is here to help.

Let’s connect. We’re currently helping clients maximise their tax strategy as part of our Let’s Connect Cross-Border Tax campaign. Book a planning session and make sure you’re capturing the treaty benefits and structuring efficiencies available across Australia, Chile, and the region.

Harris Gomez Group METS Lawyers ® opened its doors in 1997 as an Australian legal and commercial firm. In 2001, we expanded our practice to the international market with the establishment of our office in Santiago, Chile. This international expansion meant that as an English speaking law firm we could provide an essential bridge for Australian companies with interests and activities in Latin America, and to provide legal advice in Chile, Peru and the rest of Latin America. In opening this office, HGG became the first Australian law firm with an office in Latin America.

As Legal and Commercial Advisors, we partner with innovative businesses in resources, technology and sustainability by providing strategy, legal and corporate services. Our goal is to see innovative businesses establish and thrive in Latin America and Australia. We are proud members of Austmine and the Australia Latin American Business Council.

To better understand how we can support your management team in the Region, please contact contact@hgomezgroup.com  

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. It does not create a solicitor-client relationship, and readers should seek independent legal advice for their specific circumstances. Harris Gomez Group accepts no liability for reliance on this content.