Law to Bolster SMEs

Title I provides the reinforcement of the Productive Recovery Program established in 2002 by Resolution No. 481/2002 of the Ministry of Labor, Employment and Social Security.

Title II provides a special tax treatment to bolster SMEs:

1. Tax on Presumed Minimum Income will not be applicable from January 1, 2017.
2. Tax on Debits and Credits on Bank Accounts that are already cancelled may be computed at 100% as payment on account of Income Tax Law by SMEs and on 50% by manufacturing industries according to Law 25.300 and amendments. The uncompensated remaining amount may not be compensated with other charges, reimbursement request or transfers to third parties.
3. SMEs may include the resulting amount in their tax return of Value Added Tax on the second month immediately following its original maturity.

Title III establishes a Regime of Promotion and fiscal stability for productive investments of SMEs. Productive investments are those on capital goods or infrastructure facilities according to guidelines provided by future regulations. The law provides several causes for expiration of the benefits such as reducing the level of employment according to guidelines provided by future regulations.

SMEs involved in productive investments are entitled to compute as payment on account, up to the limit of the amount of the obligation according to Income Tax Law determined on the fiscal year or period, the amount resulting of applying the rate of 10% on the amount of the productive investment made during that period without exceeding the amount determined by applying 2% of the average net income from sales, services locations on the year there the investment was made and the previous years.  For manufacturing industries the limit stated above will increase to 3%.

The benefits resulting for the payment on account is exempt from Income Tax Law and the application of withholding as a sole and unique payment is deemed as a part of the determined income.

Regarding Value Added Tax, the law established a Special Regime to Bolster SMEs with tax credits produced by productive investments.

Title IV provides several amendments to Laws No. 24,467 (“Law of Small and Medium- Sized Enterprises”) and No. 25,300 (“Promotion Law for Micro, Small and Medium-Sized Enterprises”).

Title V provides several amendments to Laws No. 23,576 (“Negotiable Obligations Law”), No. 20,091 (“Insurance Company Law”) and Decree Law No. 5,965 (“Bill of exchange and promissory note law”) in order to facilitate financing.

Finally, Title VI designs the Monitoring Board and Competitiveness for SMEs with public-private participation which will have task of monitoring credit assignment and foreign trade.