Taxpayers carrying out software-related activities as their main purpose may qualify for the benefits granted by the legislation.
The main tax incentives contemplated by the regime are as follows:
- Fiscal stability until the promotional regime is in force. This stability would imply that the authorities cannot modify the tax burden of qualifying taxpayers (it only covers national taxes);
- Implicit reduction of social security charges. 70% of these charges may be credited against certain national taxes, except for income tax unrelated to export of software; and
- Income tax relief. Reduction of up to 60% of the applicable tax due on Argentine and foreign-source income arising from the promoted activities in each fiscal year.
These benefits will be available from the time a taxpayer registers for the regime, which will be effected through publication in the Official Gazette.
To qualify for the incentives, the software must be developed in Argentina and the taxpayer has to develop, as its main activity, the creation, design, development, production and implementation of software systems and their technical associated documentation, excluding self-developed software.
Additionally, qualifying taxpayers must satisfy two of the following three conditions:
- To incur R&D expenditure;
- To own a quality standard applicable to the activity; and
- To export software.
It is expected that the software industry will be further stimulated with these kinds of measures, which improve its competitiveness.
Andrés Edelstein (andres.m.edelstein@ar.pwc.com ) and Ignacio Rodríguez (ignacio.e.rodriguez@ar.pwc.com ), Buenos Aires
PwC Argentina
Tel: +54 11 4850 4651
Website: www.pwc.com/ar