All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Tax benefits key to software promotion in Argentina

Through the enactment of law 26692, the software promotional regime, created by law 25922, has been extended from September 2014 until the end of 2019.

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

more across site & bottom lb ros

More from across our site

Multinational companies fear the scrutiny of aggressive tax audits may be overstepping the mark on transfer pricing methodology.
Standardisation and outsourcing are two possible solutions amid increasing regulations and scrutiny on transfer pricing, say sources.
Inaugural awards announces winners
The UN’s decision to seek a leadership role in global tax policy could be a crucial turning point but won’t be the end of the OECD, say tax experts.
The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.
An OECD report reveals multinationals have continued to shift profits to low-tax jurisdictions, reinforcing the case for strong multilateral action in response.