The Investment Promotion Law in the Automotive industry provides benefits such as the early return of the VATaccelerated amortization in the Income tax and export duties of 0% until December 2031.
The sending of the automotive bill occurred in August 2021 and remained in the gates. The Executive power put it on the agenda again in February 2022, by being included in the special sessions. Now its turn has come and it will be discussed in the plenary session of the Industry and Budget committees. The ruling party accelerates the approval of this initiative, since it is a key point in the framework of economic recovery and improvement of employment and production at the national level.
Point by point, what does the automotive bill say
The incentive measures are aimed at new investment projects that ensure greater production, exports and employment in terminals and auto parts companies, in order to add value from industrial processes.
The promotion will reach “investment projects that include regionally exclusive platforms and minimum levels of national content”according to the text of the project, in which it is specified that it will cover the production processes of automobiles, pick ups, commercial vehicles, buses and trucks, as well as engines and auto parts.
In this scheme, vehicle manufacturing projects must contemplate a minimum national content of 15% during the first 3 years of production and 20% the following two years. In the case of engines, it will be 10% during the first 3 years and 15% in the following two.
In turn, investments in capital goods and infrastructure approved by the Ministry of Industry, will have tax credits for the VATthe accelerated depreciation in the Income tax and export duties of 0% until December 31, 2031.
In Argentina there are 11 automotive terminals that produce cars, pickups, light commercials, trucks, buses and auto parts, and more than 400 auto parts manufacturers that manufacture air conditioning, exhaust, suspension, transmission, tires, batteries, pumps, filters, stamped parts. , plastic parts, engine parts and seats, among others.
In 2020, in the framework of the pandemic and sanitary restrictions, the local terminals produced 269,592 vehicleswell below the production record recorded in 2011, with 828,771 units, in a context in which automakers already anticipated being in a position to reach the figure of one million.
“One of the objectives of the national government is promote the growth of said value chain in a sustainable mannerencouraging investments in efficient production platforms, exclusive at the regional level and on an international scale, that allow for a high export insertion and high levels of national integration of auto parts,” says the project.
Vehicle manufacturing projects must contemplate a minimum national content of 15% during the first 3 years of production and 20% the following two years
Program for the Promotion of New Investments in the Automotive-Autoparts Industry
Through the project, the “Program to Promote New Investments in the Automotive-Autoparts Industry”which will include investments in new capital goods and infrastructure works carried out by industrial companies based in Argentina.
According to the text, the beneficiaries may be those companies that have investment projects approved by the application authority, while those who are declared bankrupt, are in another promotion regime or are in arrears may not benefit from the program.
According to the initiative, investment projects “must necessarily involve the production of: new auto parts or auto parts already produced at the time of registration to the regime, which involve a substantial improvement in production capacity.”
Source: Ambito
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