Argentina: Regulation Of Benefits To Bolster Small And Medium Sized Enterprises

By means of Decree No 1101/2016 and Tax Authority General Resolution Nos 3945 and 3946, the Argentine Executive Branch of Power regulated the scope and legal requirements in order to access the benefits provided in Law No 27,264 of Promotion of Small and Medium Sized Enterprises.

On July 13, 2016 Law No. 27,264 of Promotion of Small and Medium Sized Enterprises was sanctioned and later published on the Official Gazette on August 1, 2016 (the "Promotion Law"). The Promotion Law was sanctioned in order to promote the recovery of small and medium sized enterprises ("SMEs") contemplating certain financial and tax benefits to that end. The Promotion Law was commented in Marval News # 164.

On October 17 and 19 the Official Gazette published Decree No. 1101/2016 and General Resolutions Nos 3945 and 3946 issued by the Tax Authority ("AFIP"); regulating the Promotion Law.

The Promotion Law and its regulations set out two main aspects: (1) a special tax treatment for SMEs by means of certain tax benefits and (2) a series of measures to bolster productive investments, described as follows:  

1.   Tax Benefits for SMEs

  • Presumed Minimum Income Tax exemption. To be effective for fiscal exercises as from January 1, 2017. Decree No. 1101/2016 instructs AFIP on the regulation of this benefit. To the date of this publication, such regulation has not yet been made public.
  • Tax on Debits and Credits in Bank Accounts already cancelled may be computed at 100% as payment on account of Income Tax for enterprises considered "micro" or "small" and at 50% for manufacturing industries considered "medium – section 1".
    According to the regulation hereby analyzed, that benefit includes the amount of the Tax on Debits and Credits in Bank Accounts effectively paid until the end of the fiscal year in course. For the first fiscal annual year, the amount paid as from August 10, 2016 will be taken into account if and when the taxpayer is categorized by the AFIP as an SME before December 31, 2016. If the categorization is accepted after that date, the taxpayer may take advantage of the benefits as from the month in which the categorization is approved. The process to obtain such categorization needs to be made on the AFIP's website.
  • Value Added Tax ("VAT") payment deferral. "Micro" and "small" enterprises may pay the resulting balance in VAT affidavits on the second month following the original due date. Thus, the tax will still be assessed and declared by the taxpayer on its original due date (according to AFIP regulations), but taxpayers will be able to defer payment for 90 days.
    AFIP's General Resolution No. 3945 specifically excludes people facing criminal charges involving tax crimes, or common crimes related to not complying with tax, customs or social security obligations.
    At the same time it sets forth the legal requirements for granting such benefit, such as: not having a lack of presentation neither of informative nor determinative affidavits before AFIP; not being in a state of bankruptcy; requesting to be categorized as an SME and the express adhesion to the benefit in AFIP's IT system; having an electronic fiscal domicile, among others.
    It is important to bear in mind that the benefit will be effective once the categorization is approved and that it will be rightfully lost when the beneficiary fails to present three monthly affidavits and /or fails to pay the tax.
  • Compensation of credit and debit balances and automatic reimbursement. The Promotion Law also includes the possibility of offsetting credit and debit balances in a systematic way and the possibility of requesting the reimbursement of any positive balance. Pursuant to Decree No. 1101/2016, the balances contemplated in the benefit are of those corresponding to every tax which is collected by the AFIP. The reimbursement will be done with public bonds.
  • Other measures: The Promotion Law also simplifies procedures which favor the assessment and payment of Federal Taxes; the implementation of programs which tend to recompense SMEs located in border areas and a bigger benefit for SMEs related to regional economies. To date, those benefits have not been expressly regulated by the AFIP.

2.   Productive Investment's Promotion

The Promotion Law also establishes a series of measures to promote productive investments done by SMEs between July 1, 2016 and December 31, 2018. The following are  understood to be productive investments : (i) capital goods to be used in the company's economic activity and not for regular sale (buy, construction, fabrication, elaboration or definite importation of new or used goods which are amortizable for Income Tax, including the acquisition of reproductive cattle and excluding vehicles), and (ii) infrastructure projects. 

The promotion measures are:

  • Fiscal stability until December 31, 2018 for every tax (direct taxes, fees and contributions). Argentine Provinces may adhere to this benefit by sanctioning a Law in which they should expressly invite Municipalities to sanction similar laws for their jurisdictions;
  • Computing as payment on account of Income Tax of the amount arising from applying a 10% rate over productive investments (net of VAT), with a certain cap;
  • Granting a non-transferable bond which may be used for payment of federal taxes, including customs taxes, for the maximum amount of VAT tax credit arising from the productive investments. This bond may be used within 10 years as from its emission.  

The regulation provides that, in order to access to those benefits, the potential beneficiaries must file an affidavit through the AFIP's website, together with a legal opinion issued by a public accountant backing the investments and the VAT tax credit arising from them.

Furthermore, it is regulated that benefits hereby provided will expire if, in the fiscal year in which the benefit was computed and/or in the next, the company reduces its employment level by 5% in relation to the average employees declared during the previous fiscal year. The employment level declared at the moment of adhesion to the regime will not be considered reduced in case of employees' retirement, death or quitting. Certain labor contracts will not be considered as well (fixed-term contracts, seasonal contracts or casual work contracts, among others).

Finally, it is provided that infrastructure projects under construction must be concluded within 4 years as from the granting of the benefit and must remain as an asset of the beneficiary for certain period of time once the project is concluded.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions