Taxpayers should continue to monitor the release of new guidance, so that they can apply for the regime.

On January 20, 2020, Argentina's Ministry of Productive Development published, in the Official Gazette, Resolution 30/2020, suspending the promotional regime for the knowledge-based economy. For more information on this regime, see Tax Alerts 2019-1099 and 2019-1867.

Background

Law 27,506 created a promotional tax system for the knowledge-based economy, which is effective from January 1, 2020 to December 31, 2029. Among the regime's benefits are a reduced income tax rate of 15%, reduced social security contributions, exemptions from value-added tax (VAT) withholding and reverse withholding, and a tax credit bond to offset federal taxes. Taxpayers also may be able to credit foreign income taxes against Argentine income taxes due on Argentine-sourced income.

The objective of the regime is to promote knowledge-based and digital activities that result in the manufacturing of goods, the provision of services or the improvement of processes. Some of the activities included in the promotional regime are software development and related activities, audio-visual productions, biotechnology, professional services qualifying as exports, nanotechnology, satellite and aerospace industries, artificial intelligence and robotics.

Resolution 30/2020

On January 20, 2020, Argentina's Ministry of Productive Development issued Resolution 30/2020, revoking Resolution 1084/2019 of the former Ministry of Production and Labour and Resolution 449/2019 of the former Secretary of Entrepreneurs and Small and Medium Enterprises. Those resolutions had established the application process for taxpayers to request the benefits of the regime. The review and processing of applications filed so far have been suspended until new provisions are issued.

———————————————