The Government established that the tax credit certificates provided for under the Refinación Plus program will also be applicable to the payment of export duties on goods from the agricultural and agro-industrial sector, until December 31, 2022, through the Decree 722 / 2021 published today (21.10.2021) in the Official Gazette.
The Refinación Plus program was created in 2008 with the aim of establishing incentives for projects to build new oil refineries or expand refining capacity and convert existing plants.
For this purpose, a tax incentive regime was established through the granting of transferable tax credit certificates applicable to the payment of export duties on hydrocarbon activities, for those producing companies that increased their fuel production.
In December 2014, a new export duty scheme was established, which set a 0% withholding rate in cases where the international price of crude oil was equal to or less than US$ 45 per barrel; and 8% if it was equal to or greater than US$ 60.
However, the Government pointed out in the current decree that "the volatility of the international price of crude oil - currently above US$ 80 - and its derivatives generated a considerable decrease in hydrocarbon exports and, therefore, in the export duties associated with such products."
In this regard, he stressed that this "leads to the gradual use of the aforementioned tax credit certificates and considerably extends the compensation of the credits granted over time."
Consequently, he acknowledged that “beneficiary companies have seriously restricted their ability to use the certificates delivered within the framework of the program,” and stated that this “makes it difficult for them to absorb the entire tax credit generated by December 31, 2021, and thus, the incentive originally conceived as a reduction of the tax burden through payment on account is lost.”
"In such a scenario, the use of said tax credit certificates with export rights for hydrocarbon activity is insufficient to absorb the tax credits granted to the companies benefiting from Refinación Plus, especially with regard to refining activity," the decree stressed.
He therefore considered that "it is necessary to implement measures aimed at guaranteeing the levels of profitability of the hydrocarbon sector in order to maintain investment patterns aimed at achieving self-sufficiency in hydrocarbons and ensuring compliance with the principles of hydrocarbon policy."
In this context, he pointed out that "it is reasonable to temporarily expand the application base of the payment on account to allow the crystallization of the incentive originally intended and to extend the application of the aforementioned tax credit certificates to the payment of export duties on other goods from the agricultural sector, which are received by companies in the hydrocarbon sector in exchange operations for the marketing of diesel fuel in the domestic market."
These commodities are wheat; barley; corn; sorghum; soybeans; soybean, sunflower, safflower and cottonseed oils; residues from the milling and extraction of soybean oil and vegetable fats or oils; soybean hull pellets and sunflower seeds.l.
In this regard, the decree highlighted that “the growing international context regarding commodity prices, both agricultural and agro-industrial, will allow for effective use of the aforementioned tax credit certificates and will facilitate a genuine materialization of the tax incentive.”
He also stressed that "this measure promotes and encourages agricultural activity and regional economies and drives exports by allowing the immediate monetization of a tax credit in the amount of export duties, which in this activity are substantially higher than hydrocarbon export duties."
He also indicated that "this temporary provision contributes to a greater generation of foreign currency from exports, a highly relevant collateral effect in the times of crisis that the country is going through."
Source: Telam
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