In a measure aimed at strengthening the productive profile of the south of the country, the national government formalized key changes to Tierra del Fuego's special tax regime. Through Decree 535/2025, certain tax restrictions are removed which governed companies located in the Special Customs Area (AAE), with the aim of improving their competitiveness and boosting industrial activity.
The decision, published this Monday (04.08.2025), applies to companies that have joined the promotional scheme extended until 2038 by Decree 727/21, and that produce goods originating on the island. From now on, these firms will be able to fully access the benefits in the Value Added Tax (VAT) and Income Tax, without the limitations that had been in place since the late 80s and 90s.
An updated regime
In the grounds for the regulation, the Executive Branch notes that the current economic context—marked by trade liberalization, macroeconomic stabilization, and deregulation—has changed the competitive conditions for domestic industry. Within this framework, the previous fiscal restrictions "reduce the competitiveness of products manufactured in the EPA, affecting the sustainability of the industrial center."
Therefore, the Government resolved to "optimize the articulation of the industrial regime, taking into account the current dynamics between the mainland and the island," and to advance measures that "strengthen and energize business activity" that support the development goals established in 2021.
Scope and validity
With this update, companies in Tierra del Fuego that meet the established requirements will no longer be subject to the limits that previously limited the scope of tax benefits, especially when selling to end consumers or through intermediaries.
The measure takes effect immediately, and will apply to transactions carried out from August 5, 2025.
Fiscal support for the Fuegian regime
The Tierra del Fuego regime is based on Law 19.640, which since 1972 has provided tax and customs benefits to promote population and industrial development in the southernmost region of the country. In this regard, the new measure follows recent executive decisions, such as the implementation of the simplified regime for purchases of small shipments from the island , which includes products such as televisions, air conditioners, and cell phones, among others, with the aim of strengthening this scheme that plays a geopolitical, economic, and social role.
To this end, the Government is now modifying the benefits applicable to VAT and Income Tax for industrial companies located in the Special Customs Area, in order to facilitate the direct sale of its original products to final consumers on the mainland.
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