Unanimously sanctioned, suspended, reformed, drafted and relaunched. In short, this was the path of the so-called Knowledge Economy Law, a project finally approved last week by Congress and that the Government promised to implement it before the end of the year. For that to happen a fundamental procedure is missing: that the enforcement authority (the Ministry of Productive Development, led by Matías Kulfas) regulate the standard and open the registration of companies interested in receive tax benefits, such as reductions in the payment of earnings and employer contributions, among other things.
The current Knowledge Law replaces the previous Law 27.506, surprisingly suspended by the Government in January 20 days after its entry into force. It is an industry that groups together areas and activities such as software, professional services, biotechnology, consulting, engineering and audiovisual content, among others, that has 437,000 employees and exports US $ 6,000 million annually. Although the current project limits the advantages to large technology companies, including Mercado Libre, Globant and Accenture, its approval was widely celebrated by almost the entire sector.
The promotion of the Knowledge Economy is the continuity of the Software Law, which expired in 2019 and which granted tax advantages to 506 companies. It is a broader framework than the previous regime and it is estimated that about 2,000 firms meet the requirements to be included. What are the conditions? For example, companies will have to prove that 70% of its turnover comes from the activities contemplated in the law. Or make investments in improving the quality of its products and services, train staff, carry out research and development, or export.
The first step was taken by Congress. But the regulation is still missing. Industry sources indicate that your writing is advanced and that began 3 months ago, when the Senate resumed his treatment. “There is a commitment to take effect in 2020“, said to Clarion Luis Galeazzi, president of Argencon, the sectoral chamber.
“The promotion has two key aspects: reductions in the payment of Earnings and in labor contributions. The first was modified and will be gradual depending on the size of the company: 60% for SMEs, 40% for medium-sized companies and 20% for large companies. The labor part did not undergo changes, “analyzed a senior executive of a multinational. According to the project, the fiscal cost of the promotion (what the State stops collecting) was estimated at $ 18,000 million annually, that is, US $ 230 million at the official exchange rate.
All those benefits were suspended at the beginning of the year, through a decree and without prior notice, under the pretext of bureaucratic incompatibilities. Shortly afterwards, the Government clarified that it would send a new project retroactively to the starting point. In this regard, Galeazzi assures that this is the case, but only for companies that were registered in the Software Law. “Not so for those belonging to the new activities that were incorporated,” he added.
In any event, the approval of the new standard was widely celebrated by businessmen and industry executives. As soon as the result of the vote in Deputies was known, the founder of Mercado Libre, Marcos Galperin and the CEO of Globant, Martin Migoya, they celebrated on Twitter and their messages were replicated. All before knowing the regulations. A first step is the creation of a “National Registry of Beneficiaries of the Scheme” in which companies interested in receiving the benefits must register.