Creates new investment incentives regime for the automotive manufacturing sector
19 Sep 2022
On 1 September 2022, the Argentine Congress enacted Law 27.686 to Promotote Investments in the Automotive Industry and its Value Chain ("Ley de Promoción de Inversiones en la Industria Automotriz-Autopartista y su Cadena de valor"). Under Law 27.686, the automotive industry is now designated as a strategic sector in Argentina. The new legislation entered into force upon its publication in the National Gazatte on 19 September 2022.
The new Act aims to promote new investments in the car-marking industry and to strengthen its supply chain, while reinforcing the industry’s export-oriented profile, promoting the development of new clean technologies for engines (e.g. hybrid, hydrogen, bio-fuels) and fostering technology-transfer and innovation.
The new regime offers three main tax benefits for investors:
- Accelerated depreciation of new capital goods acquired for the purposes of the investment project (to be made in 3 yearly instalments, with calculated useful life reduced by half)
- Early refund of VAT paid on acquisitions of such new capital goods (under certain conditions).
- Full exemption (0% rate) from export duties for such manufactured goods produced by the investment project, valid until 31 December 2031.
Benefits are subject to a local content threshold in the manufacture of the promoted goods.
In order to be eligible for the benefits of the new regime, investors must be companies permanently established in Argentina, and their investment project must be duly authorized by the competent authority of the new regime. The start-up period for new promoted projects (defined as the realization of all planned investments and the initiation of the production of planned goods) cannot exceed 3 years from the approval date, period which can be extended for substantiated reasons, but may in no case take place later than 31 December 2029.
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Type:
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Treatment and operation (Corporate taxation)
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Treatment and operation (Operational conditions)
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Promotion and facilitation (Investment incentives)
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Industry:
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Manufacturing (Manufacture of machinery and equipment n.e.c., Manufacture of transport equipment)
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Sources:
