Taxand Argentina looks at the anticipated tax benefits of the recently implemented renewable energy regulations.
Law No. 26,190, as amended by law No. 27,191, sets forth the Renewable Energies Promotional Regime which incentivises the use of renewable energy sources for the production of electricity, and foresees the following tax benefits:
Anticipated VAT refund and accelerated amortisation in Income Tax, being possible to simultaneously access to both benefits, with a reduction of the scope of the benefits depending on the moment of the actual commencement of the implementation of the project
Extension to ten years of the tax loss carry forward term
Exclusion of the assets affected to the promoted activity from the Minimum Presumed Income Tax taxable base, until the eighth exercise (inclusive) as from the project implementation (puesta en marcha)
Exemption of the dividends distributed by the owners of the promoted projects which are reinvested in new infrastructure projects within Argentina from the 10% tax foreseen in the last paragraph of section 90 of the Income Tax Law (as amended by Law No. 26,893)
Tax certificate to be applied to the cancelation of Income Tax, VAT, Minimum Presumed Income Tax and Internal Taxes, for the equivalent to a given percentage of the national component of the electromechanical facilities, and to the extent that the referred national component reaches a given percentage
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Taxand's Take
Businesses with operations in Argentina should take note of these new regulations, and adjust their practices if appropriate to make the most of the tax benefits.
