Argentina

Argentina

New tax incentives for high tech businesses

06 Jun 2019

Law 27506, the Regime for the Promotion of the Knowledge Economy, was enacted on 6 June 2019 with the aim of promoting the following activities: computer and digital software and services, audiovisual production and postproduction, biotechnology, bio-economy, biology, biochemistry, microbiology, bioinformatics, molecular biology, neurotechnology, genetic engineering, and geoengineering. The law covers services related to electronics and communications, exported professional services, nanotechnology and nanoscience, the aerospace and satellite industry, space technologies, engineering for the nuclear industry and services oriented to automation solutions in production. It provides new tax incentives designed to encourage high technology businesses to locate there. Tax benefits include a reduced income tax rate of 15% (instead of 25% or 30%), exemption from value-added tax, deduction of a fixed amount of employer contributions, and a tax credit for the payment of income tax and value-added tax. Companies must be registered and meet certain research and development requirements, import some services, and maintain and train staff. The Ministry of Production and Labor must promulgate regulations for the law to enter into force. The new Regime replaces the current Software Industry Promotion Regime of Law Nº 25,922 as of 1 January 2020, and effective until 31 December 2029.