Key Features of the Sustainable Mobility Promotion Bill

The bill on sustainable mobility promotion (available at this link, the “Bill”), which declares of national interest different vehicle production, marketing and use activities “powered by non-conventional power sources” and produced in Argentina, was submitted on October 12, 2021 (“Sustainable Mobility Vehicles”).

The Bill’s aim is to promote both the domestic production as well as the sustained growth and use of different types of Sustainable Mobility Vehicles.

Some of the highlights of the Bill are outlined below.

Tax Benefits for the Supply of Sustainable Mobility Vehicles and Equipment

The Bill provides different tax benefits that may be requested by those who locally produce Sustainable Mobility Vehicles and their equipment, including: (i) accelerated reimbursement of VAT; (ii) accelerated amortization of goods in relation with the Income Tax; (iii) the extension to a ten-year period for offsetting losses against income; (iv) deduction of financial liability expenses; and (v) granting of tax credit certificates.

Under the Bill, a National Registry of Sustainable Mobility Promotion (“REMFOMS” after its Spanish acronym) will be created to access these benefits, where those who produce and/or have ongoing productive projects or new projects aimed at the development and/or production of Sustainable Mobility Vehicles and related equipment must register.

Benefits for the Purchase of Sustainable Mobility Vehicles

Those who acquire new and unused Sustainable Mobility Vehicles will be beneficiaries of a green tax credit bond, the amount of which will be set annually by the authority in charge of the promotion regime. The bond may be used for the payment of VAT and Income Tax and will be nominative and transferable to third parties up to three times its worth. In addition, the sale of Sustainable Mobility Vehicles will be exempt from the motor vehicle tax provided for in the Tax Excise Law.

Furthermore, the Bill establishes that, during the term of the promotion regime, Sustainable Mobility Vehicles will be exempted from the calculation of the Personal Assets Tax. 

In addition, the Bill delegates onto the Argentine Executive the power to define a differential toll for Sustainable Mobility Vehicles covered by the promotion regime.

Promotion Regime Schedule

The Bill provides that the incentive regime will have a term of twenty years, with decreasing benefits pursuant to the following schedule: (i) up to 100% of the benefits until the eighth year of the date of the law's entry into force; (ii) up to 66% of the benefits from the end of the first period until the fifteenth year of the incentive regime; and, (iii) up to 33% of the benefits from the expiration of the second period until year 2040.

National Agency of Sustainable Mobility

The National Agency of Sustainable Mobility will be created as a decentralized agency under the Ministry of Productive Development. Its mission will be to promote the productive and/or technological development in the sustainable mobility value chain.

Trust Fund for Sustainable Mobility Development

The Bill also creates the Trust Fund for Sustainable Mobility Development (“FoDeMS” after its Spanish acronym), which will be an administrative and financial trust aimed at facilitating investments in the design, research, development, import and commercialization of Sustainable Mobility Vehicles and their technology.

Commercialization of Electrical Energy for Sustainable Mobility Vehicles

The Bill establishes the possibility of filing for status as actor of the Wholesale Electricity Market “to participate as marketers exclusively for the development of national sustainable mobility.”

Internal Combustion Vehicles

The Bill establishes that the commercialization of vehicles that run exclusively on internal combustion engines will be prohibited as of January 1, 2041, except for those that for technical reasons are deemed to be irreplaceable by Sustainable Mobility Vehicles.

The Bill has not made significant progress. The Argentine House of Representatives is expected to discuss the Bill at some point.

 

This article is a brief comment on legal news in Argentina; it does not purport to be an exhaustive analysis or to provide legal advice.