The Ministry of Commerce simplified access to a bonus that is used to pay taxes for automotive manufacturers that use national auto parts. Audits used to take up to three years. Now the bonus will be audited and paid in 80 days.
Through the Provision 45/2024, the Secretariat of Industry and Commerce of the Ministry of Economy simplified access to Argentine Auto Parts Strengthening and Development Regime (Law 27.263) that promotes the development of the automotive value chain and grants benefits to the automotive companies that integrate Argentine components.
The Regime encourages the development of exclusive regional platforms, which do not occur in other Mercosur countries, and has been a relevant factor in consolidating Argentina as the fourth largest producer of midsize pickup trucks in the world.
Auto parts: what the incentive consists of
The Regime grants a tax credit bond through an audit that took up to three years. In this sense, now the audit and the payment of the bonus will be made in 80 days. The benefit is applicable to Payment of taxes from automotive terminals adhering to the regime that integrate at least 30% Argentine components in the manufacture of their vehicles. The bonus increases as the degree of local integration of auto parts grows, and ranges from 4% to 15% of the amount invested in incorporated national auto parts.
Until now, each bond was audited by external institutions after it was granted, through a mechanism that, due to its complexity, used to take up to three years, generating delays in the following bonds to be audited, difficulties in control and problems in case corrections had to be made. These factors generated delays in granting benefits and led to the bonds losing 50% of their value.
Ford automotive industry auto parts
From now on, the Secretariat of Industry and Commerce will no longer be an intermediary in the payment of audits, allowing the payment made by the beneficiary car manufacturer to go directly to the auditing institution without any kind of intermediation. With this change, audit times will be reduced, Production can be audited as it is being made and to have accurate information prior to the payment of the benefit. This will also avoid further depreciation of the bonds and will restore to the system the fluidity it requires to meet its objective of promoting investments and local integration.
Tax credit bonds: how many have been delivered so far
In 2022, $2.292 million (ARS) in fiscal bonds were granted to the five automotive companies adhering to the regime. After a delay, By the end of 2023, another $500 million (ARS) were paid. The current government has brought $6.33 billion (ARS) of overdue bonds up to date and is regularizing pending audits that continue under the previous scheme.
The automotive industry is highly competitive globally. The subsidiaries of automotive manufacturers based in the country compete for investment projects with their peers from other countries. Argentina is one of the 40 countries in the world that has an automotive and auto parts industry. The complex represents 10% of industrial production, It is the third largest export complex in the country, exporting 57% of its production and generating around 76,000 direct jobs. The auto parts segment is made up of more than 1,000 companies, located mainly in Buenos Aires, Córdoba and Santa Fe.
Source: Ambito
