ANNOUNCEMENT 21 Oct 2015
In October 2015, the government of Argentina announced a targeted tax change.
NUMBER OF INTERVENTIONS
Law No. 27,191 (English) http://www.infoleg.gob.ar/infolegInternet/anexos/250000-254999/253626/norma.htm
InfoLeg. Resolución 531/2016. Available at: http://servicios.infoleg.gob.ar/infolegInternet/anexos/255000-259999/259883/norma.htm
InfoLeg. Resolución 72/2016. Available at: http://servicios.infoleg.gob.ar/infolegInternet/anexos/260000-264999/261481/norma.htm
InfoLeg. Resolución 1-E/2017. Available at: http://servicios.infoleg.gob.ar/infolegInternet/anexos/280000-284999/280171/norma.htm
On 21 October 2015, the government of Argentina enacted Law No. 27,191 for the purpose of extending the promotional regime for the utilization of renewable energy sources, as well as for the purpose of adding new benefits to the regime. In addition, this Law established national renewable energy targets, establishes a fund for financing renewable energy projects, and defines minimum renewable requirements for large consumers.
The key benefit-related aspects of this new Law No. 27,191 are:
Furthermore, it is important denoting that the taxpayers are able to applying for the tax benefits (once their projects are approved by the Application Authority), to the extent the project is implemented before 31 December 2017.
Additionally, Law 27,191 insinuates that a second-phase program has been established for projects that use renewable energy sources and will be implemented between 2018 and 2025. Some of the benefits are similar to the benefits available to taxpayers that start implementing projects before 31 December 2017.
Beneficiaries of this system (regardless of when the projects are implemented) will be exempt from import duties on the import of new capital goods, components, accessories, replacement parts, among others, destined for use in a renewable energy source project.
In addition to the above benefits, Law 27,191 also creates a new Fund for the Development of Renewable Energies (FODER), which is to be funded, among others, through the National Treasury with minimum 50% of the savings from shifting from fossil fuels to renewables, estimated at about US$41 billion by 2025.
Furthermore, Law 27,191 sets the following national targets for renewable energy:
Lastly, Law 27,191 also establishes a special obligation for large energy users (power demand exceeds 300 kW) to achieve the above-mentioned targets individually, under a threat of penalty. Their renewable energy might be produced on-site or purchased through contracts, whose price is capped at maximum US$113/MWh. This price can be modified for new contracts after two years from the entry into force of the law takes effect if required by market conditions.
On March 31, 2016, the Government adopted Resolution 531/2016 setting the rules for the National Regime for the Promotion of Renewable Energies. The text defines the fiscal benefits included in the new regime as well as the institutions responsible for its functioning and regulation.
On May 15, 2016, the Ministry of Energy and Mining issued Resolution 72/2016 regulating among other things the local content requirements to access the fiscal certificate that allows investors to offset other national taxes.
On October 3, 2017, the Ministries of Energy and Mining and Production adopted Joint Resolution 1-E/2017, modifying the methodology to calculate local content in the investment projects.
On October 10, 2017, the Argentine Government adopted Decree 814/2017 extending the effective dates for the incentive for periods ranging between 12 to 60 months.