Beneficiaries of the promotion of the knowledge economy in Argentina
In this second installment of the series of articles that we will publish on the subject of the promotion of the knowledge economy carried out by the new Law No. 27.506, we will focus on the beneficiaries of the promotion of the knowledge economy.
The Promotion of the Knowledge Economy Regime (hereinafter referred to as the RPEC), establishes in its article 4 that those legal entities subject to income tax for third category incomes will be beneficiaries of the promotion of the knowledge economy regime as long as:
(i) They are incorporated in Argentina or authorized to act within its territory;
(ii) They develop in the country, on their own and as their main activity, any of the activities included in the RPEC (see the previous article published in our Legal Blog: http://cspabogados.com.ar/en/knowledge-based-economy-in-argentina/);
(iii) They are registered in the National Registry of Beneficiaries of the Promotion of the Knowledge Economy Regime (which for this purpose is created by article 3); and
(iv) Meet at least two of the following requirements, in the terms and conditions to be determined by the regulation:
- To prove the accomplishment of continuous improvements in the quality of its services, products and/or processes, or by means of a recognized quality standard applicable to its services, products and/or processes;
- To evidence indistinctly and/or
jointly, the performances of expenditures in activities of:
- Research and development in the activities included in the RPEC by a minimum of 3% of its total turnover; and/or
- Training of the employees affected to the activities included in the RPEC by a minimum of 8% of the total payroll bill.
- To prove exports of goods and/or services arising out of the development of any of the promoted activities of, at least, 13% of the total turnover corresponding to those activities. When the activity promoted is that of professional export services, at least 70% of the total billing will have to derive from exports related to such activity; if the activity of export of professional services is developed by companies considered micro or small, under article 2 of Law Nº 24,4671, this percentage must represent 45% of the total turnover for the first 5 fiscal years as of the effectiveness of the RPEC.
The main activity requirement will be considered fulfilled when the percentage of turnover in the promoted activities represents at least 70% of the total billing, under the terms and conditions to be established by the regulations. Self-development may be computed within the percentage of billing required to constitute the main activity to the extent that it is for export; it will be deemed as self-development that carried out by a legal entity for its own use or for the use of corporate and/or economically linked companies, and in all cases, provided that the company is the end user (article 5 of the RPEC).
For those cases in which the legal entity does not yet have billing, it may also apply for registration in the National Registry of Beneficiaries of the Promotion of the Economy of Knowledge Regime, submitting an affidavit by which the company states that it develops one or more of the activities included, handing in its business model in said activity, and also, certifying that 70% of your payroll and total wage bill are affected to said activity.
The aforementioned conditions must be met annually with respect to any of the activities included, in the terms to be determined by the application authority (the Ministry of Production and Labor and/or whoever be designated, in accordance with article 19 of the RPEC).
Pursuant to Article 6 of the RPEC, micro-companies with less than 3 years since inception, in order to access the benefits of the RPEC, they must only prove that they develop in the country, on their own account and as their main activity, any of the activities included. After three years from the beginning of activities, in order to keep their stance in the RPEC, micro companies must prove compliance with the general requirements.
The first installment of this series dealing with the activities included and the fields promoted by the promotion of the knowledge economy, can be review here: http://cspabogados.com.ar/en/knowledge-based-economy-in-argentina/.
For the Spanish version of this publication, please visit http://cspabogados.com.ar/beneficiarios-de-la-promocion-de-la-economia-del-conocimiento/
1 The parameters to qualify as micro, small or medium enterprises are currently determined by Resolution No. 154/2018 of the Secretariat of Entrepreneurs and SMEs of the Ministry of Production.
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.