Argentina has implemented a series of tax measures to promote the development of companies that provide goods and services in the knowledge-driven economy. In October last year, the Congress of Argentina sanctioned the modification to the Promotional Regime of the Knowledge-based Economy provided under Law Num. 27506. In December of the same year, this modification was regulated by the Argentine executive branch, and in February 2021, the disposition became effective after being published in the government gazette of the Argentine Republic.
To be eligible for this benefit, the companies must have at least a 70% of the business invoicing of the last 12 months on the promoted activities. Furthermore, it is mandatory for the companies to fulfill two out of the three following conditions:
a) Accreditation of quality standards.
b) Execution of investment in training, with particular emphasis on those of the education system.
c) Export shares when these correspond to goods or services deployed in the scene of one of the activities related to the knowledge-based economy.
Among the additional requirements to be submitted, the beneficiaries can consider either the investments of the last 12 months or the average of the previous 24 months before the date of application.
Before the registration, the people concerned must fill in a form established by the AFIP, and, for this purpose, it is a requirement to comply with the tax and social security obligations, since the form must be filled in with information obtained from affidavits on the Value-added Tax and the social taxes.
The application for registration to this regime must be submitted to the platform for remote procedures (TAD, its acronym in Spanish) of the Electronic Document and Records Management System (GDE, its acronym in Spanish). The authorities emphasize that all documentation and information to be submitted accrediting the status as a beneficiary must be kept for 10 years, since within that time period, the Ministry of Production Development is entitled to request original documentation to check regulatory compliance.
The activities part of this category are software and computer services industry; audiovisual production and post-production; biotechnology; bioengineering and genetic engineering; geological and prospection services; electronics and communication-related services; nanotechnology and nanoscience; aerospace industry and nuclear industry.
Among the main benefits is the Income Tax segmented reduction, according to the company’s size; the reduction of up to 70% in employer’s contributions, and an aliquot with 0% of the duties over the export department.
The companies that come from the Promotional Regime of the Software will gain retroactively until January 1st, 2020, the benefits of reduction of employer’s contributions and of income taxes. On the other hand, the benefits concerning the export duties will come into force from December 22nd, 2020, the date in which the regulatory decree was published by the Argentine Executive Power.
Furthermore, it was established that the provinces of San Juan, Santiago del Estero, Tucumán, Catamarca, Corrientes, La Rioja, Entre Ríos, Jujuy, Salta, Misiones, Chaco and Formosa, categorized as unfavorable zones, will enjoy an additional benefit of the 10% above employer’s contributions.