The National Executive Branch enacted the law of the Knowledge Economy Promotion Regime, through the decree 408 / 2019 published this Monday (10.06.2019) in the Official Gazette.
The new law No. 27506 establishes the guidelines of the “Knowledge Economy Promotion Regime” which will govern the entire territory of the Argentine Republic and which aims to promote economic activities that apply the use of knowledge and the digitalization of information supported by advances in science and technology, to the obtaining of goods, provision of services and/or process improvements.
The measure seeks to extend the software promotion regime to the knowledge industry, incorporating numerous areas, such as computer and digital services, audiovisual production, biotechnology, biology, biochemistry and microbiology.
Also included are geological services, nanotechnology, the aerospace, satellite and nuclear industries, the video game and robotics sectors, electronics and communications services, industry 4.0 and “all professional services aimed at export”.
Details of the new law
The law creates the National Registry of Beneficiaries of the Knowledge Economy Promotion Regime, in which those who wish to access the regime created by this law must register, the official text states.
Beneficiaries will enjoy fiscal stability on all national taxes upon their registration in a national registry that is created.
As an additional incentive, a one-time transferable tax credit bonus is established, equivalent to 1,6 times the amount of employer contributions to be paid, which must be applied to the payment of the amounts to be paid, as advances or balances of sworn declarations, in the form of income tax and VAT.
When employees have a doctorate degree, the tax credit bonus generated by that employee will be equivalent to twice the amount of the corresponding employer contributions, for a period of 24 months from the date of hiring.
On the other hand, companies will be subject to the Income Tax at the reduced rate of 15% as long as they maintain their payroll; and they will not be subject to VAT withholdings or collections.
In addition, each beneficiary will have to pay annually an amount of up to 1,5% of the total amount of tax benefits granted, which will be allocated to the Trust Fund for the Development of Entrepreneurial Capital (FONDCE), created by Law 27.349.
The law also creates a “regime of incentives for private participation in the financing and support of research activities in applied science and technology to be carried out in university institutions.”
The knowledge economy promotion regime will be in force from January 1, 2020 to December 31, 2029.
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