Regulatory and Tax Stability

1. Regulatory stability  
    

On the one hand, regulatory stability implies that the incentives granted under tax, customs, or foreign exchange regimes cannot be altered neither by repealing Law 27742 (which creates the RIGI) nor creating more burdensome or restrictive regulations in the future. 
 

2. Tax Stability 
    

 On the other hand, the RIGI provides that VPUs will enjoy  tax stability, meaning that the taxes applicable to VPUs will be those that were in force at the moment it was included in the RIGI, with the modifications arising from the regime itself. Any new taxes created as of such moment, or any increase in existing taxes (either by an increase in tax rates, a change in the way the tax base is computed, or the elimination of an exemption, among other cases contemplated in the Law) will not apply to VPUs.  

This stability applies to federal, provincial, and municipal taxes, provided such jurisdictions have adhered to the RIGI. However, it does not include VAT and social security contributions. 

VPUs have the right to reject any claim for amounts additional to the tax payable in accordance with the above. If the excess is paid, VPUs may use it as a tax credit and apply it to cancel any other federal tax. 

While it will be up to the VPU to prove the effects of this tax stability regime, when the violation is the consequence of the creation of a new tax or the increase of an existing one, the Argentine Tax Authority will have to justify and prove that such modification does not imply a higher overall tax burden for the VPU. 

Nevertheless, VPUs may benefit from future elimination or lowering of taxes. 

    3. Stability period 

The regulatory and fiscal stability mentioned above will be valid for 30 years as of the date the VPU joined the RIGI. However, the law provides that the mere termination of the stability period does not imply the termination of the RIGI or of the incentives granted, unless otherwise provided by law. 

In the case of projects declared as Long-Term Strategic Export Projects (PEELP) to be implemented in future stages, the Ministry of Economy may extend the  stability guarantees for up to 30 years after the estimated “start-up” date of each stage. However, it may not be extended beyond 30 years from the tenth year following the start-up of the first stage.