Law 27,570 was published in today’s Official Gazette, amending the Knowledge Law (“LEC”) regime sanctioned last year.
The Law finally sanctioned grants tax benefits to certain areas of economic activity based on knowledge with the ability to generate income to the country through the export of Argentine talent. These areas include:
• Computer and digital software and services, including the development of products and services through the Internet, software factory, video games, etc.
• Audiovisual production and post-production.
• Biotechnology, bioeconomics, biology, biochemistry, microbiology, bioinformatics, molecular biology, neurotechnology and genetic engineering, geoengineering and its tests and analyzes.
• Geological and prospecting services and services related to electronics and communications.
• Professional services, only insofar as they are for export.
• Nanotechnology and nanoscience.
• Aerospace and satellite industry, space technologies.
• Development of automation-oriented goods and services, such as artificial intelligence, robotics and industrial internet, internet of things, augmented and virtual reality or simulation.
• Engineering, exact and natural sciences, agricultural sciences and medical sciences activities linked to research and experimental development tasks.
The tax incentives included in the LEC include tax credits for Labor Taxes and reduction of the Income Tax rate. Law 27,570 significantly reduces the benefits established by the previous law, by limiting them to Employer Contributions paid in relation to personnel in promoted activities
exclusively, earnings from promoted activities, and staggering the Income Tax reduction according to size of the promoted company.
The regime requires exports, investments in research and development or training, and continuous quality improvement or obtaining quality certifications. In order to maintain certain benefits, it is required to maintain the number of employees.
The purpose of this new regime is to replicate the success obtained by the Software Promotion Law, a decisive factor that contributed to the enormous growth and international insertion of the Argentine software industry in the last 15 years, in which the formal employment and its volume of exports grew considerably. However, the modifications introduced in Law 27,570 cast a veil of doubt about the suitability of the regime for many of the activities included in the Law, and it is expected that the regulations will clarify certain doubts about the scope of the benefits and the procedures for get them.
Contact us to learn more and analyze if your company can qualify for the Knowledge Law. Our Study has made more than 100 successful registrations in the Software Law, and we are already working with the Knowledge Law.