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4.1. Foreign PE of a Domestic Entity

When dealing with foreign source income, ITL contains an express reference to foreign PEs of domestic entities. The definition is similar to the one stated for local PEs of foreign entities (i.e., commercial, industrial, agricultural, mining or any other type of establishment organized as a stable entity); however, it explicitly includes in the definition constructions, reconstructions, repairs and assemblies, as well as parceling, building and sale of real estate in a foreign country.

It is worth mentioning that foreign PEs do not have under ITL a tax personality different from the Argentine head office, so that income attributable to the foreign PE is deemed income of the local owner. Unless qualifying as domestic source income (or loss), in which case the foreign PE is deemed a foreign beneficiary, income (and losses) attributable to the foreign PE is foreign source income to the local enterprise and must be assessed under the rules of the ITL.