Technology companies targeted in new laws across Latin America

The LatAm region is moving quickly on passing legislation to tax the digital economy and attract foreign investment from the technology sector while boosting tax revenues.

Digital services taxes (DSTs) in Brazil, Mexico Argentina and Chile, as well as Brazil’s anticipated tax reform and Mexico’s controversial law to block foreign digital services all highlight the trend in this region.

However, it is not all bad news for technology companies as many countries, including Argentina, Chile, Peru, and Uruguay, are also offering benefits such as discounts on income tax and capital gains to attract companies.

Like the rest of the world, the regional economies in Latam have been suffering from economic crises, exacerbated by the Covid-19 pandemic. Although many businesses closed, the profits of technology companies, including FinTech, soared.

In 2020, several countries created laws offering tax incentives to technology companies to bring in more investment from this sector and reap the revenue benefits of this boom. In 2021, the growth in this sector is expected to continue and governments across the region are ready to tap into the benefits it brings.

In a webinar hosted by ITR, Juan Frers, director of the Worldwide TaxNet, will discuss the laws coming into effect in various countries across the Latam, offering practical insight for technology companies and the advisors who serve them.

Latam is offers new opportunities for technology companies from the US and Europe to invest and grow. The number of tax incentives on offer is greater than those found in the US and across Europe, as well as the cheaper currency and costs.

However, businesses and their advisors need to understand the changing laws to avoid being caught in an unexpected tax dispute. In addition, not all countries are opening their borders to foreign investment, making it crucial to plan investments carefully.

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