Published and draft legislation - Argentina

Tax concessions for SMEs

Decree 1101/2016, Regulations for Act 27.264

After passing Act 27,264 in July, the Argentine government, which set up the Productive Recovery Programme for micro, small and medium enterprises (MSMEs), by giving them fiscal advantages, has published Decree 1101/2016, exempting those MSMEs whose tax periods begin in January 2017 from the minimum notional income tax.

Furthermore, the sum they have paid in as tax on the credit and debit in their bank accounts (100% in the case of MSMEs and 50% for "bracket 1 medium" industries) will be considered as an interim payment on earnings, with the proviso that the remainder may not be carried forward to the next financial year. They may also defer the payment of the balance resulting from their sworn VAT statement (which still has to be submitted every month) and paying the balance 90 days after invoicing.

The decree also provides for tax concessions with a differential of between 5% and 15% for regional economies; on this the Ministry of Production has yet to prepare a detailed set of provisions.

In order to be eligible for these tax concessions, companies must register as SMEs and upload a sworn statement with a tax password onto the institution’s website (form 1272, applying for a category type and concessions), which must include the applicant’s sales volumes and staffing numbers.

The decree also provides for deducting up to 10% of productive investments paid out from taxable earnings and for reimbursing the VAT on capital goods investments and infrastructure through a tax credit coupon.

It also raises the VAT withholding-exemption threshold by 135%, the earnings threshold by 400%, and enables micro companies to receive their VAT no-withholding certificates automatically.

The concessions will lapse in the event of the company cutting its staff by 5% from the number stated in the previous tax period, in the tax period on which the concession is calculated.