Argentina: Tightened Import Controls and Extension of Tax Incentive Regime
In a move designed to halt a shrinking trade surplus, the Argentine government has tightened controls on imports. Under General Resolution 3252/2012, issued in January, new restrictions are now in place on hundreds of goods. Effective February 1, 2012, importers are required to file an advance import affidavit with the tax authority's website before the definitive import of any type of goods. The government has a long history of heavy control on foreign trade.
In another development of note, the Argentine Congress has extended the tax incentive regime granted by Law 26,360 that provides tax benefits for investments in new capital assets earmarked for industrial activities.
The tax benefits consist of either accelerated depreciation for income tax purposes (over three, four or five years for depreciable movable assets or 50%, 60% or 70% of the estimated useful live for infrastructure works) or early VAT reimbursement for the relevant investment. Under certain circumstances, the taxpayer may request both benefits.
Companies wishing to obtain the benefits for investments in new capital assets must participate in a special bidding process (the date of which is still uncertain). There must be a disbursement of funds equal to at least 7.5% of the total amount of the project between October 1, 2007 and December 31, 2012.
According to E&Y, taxpayers cannot claim both benefits for the same project, unless (1) the project is exclusively export-oriented, and/or (2) the project involves clean production or sustainable industrial reconversion. For tax incentive purposes, eligible infrastructure works are those declared “critical” by the Ministry of Planning, including:
- Generation, transportation and distribution of electric energy
- Production, transport and/or distribution of hydrocarbons
- Mining exploration and exploitation
- Works related to roads, railways and ports