On 7 January 2021 the legislature of the Autonomous City of Buenos Aires enacted Law N° 6394 adopting the Knowledge Economy (LEC) regime established under National Law N°27.570. The purpose of the LEC is to foster development of a knowledge-based economy. The LEC provides a tax benefit regime for those who carry out activities related to the use of knowledge and the digitalisation of information (based on science and technological advances) to obtain goods, provide services, or improve processes.
Tax benefits under the regime range from a reduction of 50% in the turnover tax rate (which can be either 3% or 5%, depending on the annual billing level of the taxpayer) to a rate of 1.5%. To take advantage of applicable benefits, those eligible must register in a public registry that will be created.
It is important to note that to claim benefits under the regime you must meet at least two commitments expressly set out in the LEC. Among the commitments expressly set out are:
Finally, we should also mention that various provinces such as Cordoba, Santa Fe, Tucuman, and others, have already established a similar regime for the knowledge-based sector with benefits like fiscal stability and a reduction in rates or a full tax exemption.
Guillermo Jaime Poch
Alberto Fabián Mastandrea