difficulties and benefits of a key law

It is widely known the low business start-up rate In our country. While the annual birth rate in Argentina is 1 new formal company for every 2,326 inhabitants, this indicator is 1 in 347 in Brazil and 1 in 125 in Chile, according to data from the SME Observatory Foundation (FOP).

This unfavorable situation has been getting worse since 2011, from which time More companies close each year than are born. On the other hand, firms start their activities with only 3 employees on average, and those that survive take an average of 7 years to double that number of personnel, according to information provided by the National Secretariat for Productive Transformation. In short, there is a general panorama of stagnation or setback in the field of company creation, with slow expansion of employment and low competitiveness. (1)

But the case of the software industry It is useful to keep it in mind as a success story, in relation to the number of companies considered belonging to the IT sector and services (SSI). Many are also beneficiaries of the Law 25.922, with a total workforce of 101,700 workers, who worked mostly in companies with up to 9 employees, as indicated from the Observatory of Employment and Business Dynamics (OEDE), of Ministry of Production and Labor of the Nation. In fact, the rate of increase in the number of companies in the sector in the mentioned period was 3% per year, and the increase in employment was above 4% per year.

Pandemic through, all of the aforementioned becomes even more relevant given that the need to encourage the export of services in a sector that could increase it, with the appropriate tax incentives, is not a minor fact. And, in this line of ideas, the long-awaited regulation of the Knowledge Economy Law was recently issued, with just additional benefits for those who enter the registry to deduct the export of said services.

On the other hand, it is recalled that with the Solidarity Law, published at the end of 2019 but valid until 2020, it had been established that the services export duties amounted to a rate of 5%. However, as one of the main milestones of this regime, it is emphasized that those beneficiaries will enjoy a reduction to 0% in the case of services, generating good news in the sector, since this extra cost disappears if achieves registration in the registry.

This means that those SMEs that they had to pay this right because they had a turnover of more than USD 600,000, and that they were not micro or small and did not enter the aforementioned tax allowance in the last year, they will have significant tax savings. As an example, we could indicate that, if they billed USD 100,000, at an official exchange rate of 88, the savings would translate into approximately half a million pesos.

For its part, although we still do not have details from AFIP, we can indicate that the Ministry of Productive Development has issued Resolution 4/2021, which contains in its Annex III the detail of the activities that would be subject to benefits emanating from this tax regime. In this extensive list, current activities such as Business Services ncp stand out, as well as unconventional activities such as Web Portals, Data Hosting.

(1) Source: « Special Report on International Programs for the promotion of business birth rates and the development of SMEs » carried out by the Pyme Observatory Foundation. September 2018

* Silvia Andrea is a partner in charge of Misión Pyme and

** Aaron Cores Moglia is Manager of Tax Advice at SMS Buenos Aires