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Argentina Provides Implementing Rules for Exemption Incentives for ARS Denominated Investments — Orbitax Tax News & Alerts

Argentina has published Decree 621/2021 of 16 September 2021, which entered into force on 23 September 2021 and provides implementing rules for the income tax and personal assets tax exemptions introduced by Law 27638 to support investments denominated in Argentine pesos (ARS). As previously reported, this includes an income tax exemption on interest derived from ARS denominated bank deposits with an adjustment clause for inflation, as well as an income tax exemption on interest or income derived from ARS denominated financial instruments to be created by the Executive to promote productive investments. The law also provides an exemption from personal assets tax on qualifying ARS denominated commercial paper, financial instruments to be created by the Executive to promote productive investments, and listed shares in regulated mutual investment funds and financial trusts, the underlying assets of which include promoted securities or investments.

Decree 621/2021 provides that promoted financial instruments eligible for exemption include those meeting the following conditions:

  • they are placed by public offering with authorization from the National Securities Commission or are created or made eligible by an act of the Executive Branch; and
  • they are destined to the promotion of productive investment in Argentina, which is understood as direct or indirect investment and/or financing in productive investment, real estate, and/or infrastructure projects in different economic activities in sectors producing goods and services, such as agriculture, livestock, forestry, real estate, telecommunications, infrastructure, energy, logistics, sustainable economies, promotion of entrepreneurial capital, fishing, development of technology and capital goods, research and application of technology to medicine and health, science and applied research, extraction, production, processing and/or transportation of raw materials, development of computer products and services, as well as the financing of Micro, Small and Medium Enterprises.

Decree 621/2021 also establishes the minimum percentage of underlying assets for qualifying mutual funds or financial trusts eligible for the exemption, which is set at a minimum of 75%.