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Argentina Establishes New Biofuel Regulatory Framework — Orbitax Tax News & Alerts

Argentina published Law 27,640 in the Official Gazette on 4 August 2021, which approves a new Biofuels Regulatory Framework. The new Biofuels Regulatory Framework covers various aspects of biofuels, including production, storage, commercialization, and mixing with other fuels. With respect to taxation, the law provides that biodiesel and bioethanol are exempt from the Liquid Fuel Tax (ICL) and the Carbon Dioxide Tax (ICO2) at all stages of production, distribution, and commercialization, provided that the primary raw materials used in the production process are of national origin. Where such biofuels are mixed with fossil fuels, the fossil fuel component remains subject to these taxes.

Law 27,640 entered into force on 5 August 2021 and will remain in force until 31 December 2030, with the possibility of an additional five-year extension. With the entry into force on Law 27,640, certain other laws and their related regulations cease to be effective. This includes Law 26,093 of 2006, which established the Promotion Regime for the Sustainable Production and Use of Biofuels and as previously reported, has been extended multiple times pending the entry into force of the new Biofuels Regulatory Framework.