Argentina: Tax benefits under regime to promote digital “knowledge” economy
Argentina: Regime to promote digital knowledge economy
A new regime offers tax and other benefits in an effort to promote economic activities involving the “knowledge” economy and the digitization of information supported by advances in science and technologies.
The tax benefits under the regime include:
- A reduced rate of income tax
- A non-transferable tax credit of up to 70% of the employer’s social security contributions
- An exemption from value added tax (VAT) withholdings and collections (but only for exporters)
- An exemption from customs duties on the export of services
Disposición 11/2021 (released by the Subsecretaría de Economía del Conocimiento and published in the official gazette 18 February 2021) includes measures for implementing the digital “knowledge” economy regime as established by Laws 27,506 and 27,570 and Decree 1034/20.
These implementing measures are effective retroactively beginning from 1 January 2020 through 31 December 2029 for beneficiaries under a prior regime (as established under Law 25,922). For newly qualified beneficiaries, the implementing measures are effective from 18 February 2021 through 31 December 2029.
In general, the regime to promote the digital “knowledge” economy focuses on activities such as software development and related activities; audio-visual productions; biotechnology; geological services; electronic and communication services; professional services qualifying as exports; nanotechnology; aerospace industry; artificial intelligence and robotics; research and development (R&D); and medical developments. The executive branch may also consider and approve requests to include other activities as being eligible under this promotional regime. There are “substantial” requirements (for instance, 70% of the business is involved in the approved activities) and “formal” requirements (listing in a special register, renewed every two years). Additional requirements may include R&D investments, training targets, and certain quality standards.
Companies doing business in Argentina need to consider the tax benefits under this regime, particularly if they are knowledge-based enterprises.
For more information, contact a tax professional with KPMG’s Latin America markets tax group or with the KPMG member firm in Argentina:
Niren Saldanha | +1 212 954 3835 | firstname.lastname@example.org
Rodolfo Canese | +54 11 4316 5753 | email@example.com
Violeta Lagos | +54 11 4316 5740 | firstname.lastname@example.org
Hernán Caire | +54 11 4316 5737 | email@example.com
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