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Benefits of Renewable Energies Promotional Regime

Argentina
Law 26,190, as amended by Law 27,191, establishes the Renewable Energies Promotional Regime which incentivises the use of renewable energy sources for the production of electricity by granting certain benefits. Among those benefits there are a number of tax benefits. Taxand Argentina explains

The following are some of the tax benefits established by the Regime:

  • In relation to income tax, one of the benefits is the accelerated amortisation of the fixed assets involved in the renewable energy project.  In relation to VAT (value added tax), the benefit consists of the early recovery of the VAT borne on the project’s investments. Both of these benefits may be applied simultaneously
  • Please note that the level of these benefits decreases progressively where the actual commencement of the implementation of the project is delayed
  • In income tax, there is a term of 5 years to offset the tax losses carried forward against profits for future years. The regime provides for the extension of that term to ten years
  • Exclusion of the assets used in the promoted activity from the minimum presumed income tax base, until the 8 fiscal year (inclusive) following implementation of the project
  • Exemption from the 10% tax established for the dividends distributed by the owners of the promoted projects which are reinvested in new infrastructure projects in Argentina
  • 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 electromechanical facilities, and provided that the referred national component reaches a certain percentage
  • Compatibility with the promotional regime for the generation of electricity from wind and solar sources established by Law 25,019, and extension of the benefits set forth in articles 4 and 5 of that Law to all the other sources established in Law 26,190, as amended by Law 27,191. It is worth noting that the amount of the remuneration set forth in article 5 of Law 25,019 were duly updated by Law 26,190
  • Exemption from special taxes, fees or royalties of any jurisdiction (provinces, municipalities, etc.) on the access and use of renewable energy sources, until December 31, 2025 (the exemption does not include eventual fees for the use of state-owned lands where the projects may be implemented)
  • Exemption from custom duties and other special taxes related to the import of capital assets, equipment, components and elements of those assets and equipment, as long as they are necessary for the renewable energy project.
  • The National Bank of the Argentine Republic will establish special short term credit facilities with preferred interest rates to finance the VAT to be paid by the beneficiaries of the Renewable Energies Promotional Regime during the implementation of the project and until the commencement of their commercial operation 

Your Taxand contacts for further queries are:
Ezequiel, Lipovetzky
T. + 54 11 4021-2311 | 5171-2311
E. Ezequiel.lipovetzky@bfmyl.com

Julieta Maria Avellaneda
T. + 54 11 4021-2403
julieta.avellaneda@bfmyl.com

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Taxand's Take

This new promotional regime will increase the demand for renewable energies and contribute to the transformation of the energy markets. Resolution 72/16, issued by the Ministry of Energy and Mines, has established the procedure for obtaining the Certificate of Inclusion in that regime; it must be obtained in order to access the tax benefits. 

Taxand's Take Author

Ezequiel Lipovetzky

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