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Proper monitoring of projects can get in front of opportunities to extend the benefits initially granted

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As is known, the investment promotion regime created by Law 16,906 provides access to tax benefits with the presentation of investment projects with the Ministry of Economy and Finance (Comap).


Naturally, when deciding to apply for this benefit, it is crucial to carefully examine the investment project to be developed in order to properly position regarding exemptions. This involves not only the analysis of the characteristics of the project to locate in the most efficient way in the regulatory framework, but also review and interpret the applicable rules in order to determine whether the criteria applied in administratively are most faithful to the rules. It has happened that before planteos founded stakeholders, we proceeded to establish new criteria more beneficial for investors.


But, as we shall see, it is also very important to control the execution, since it can spark new opportunities. It is vital that companies implement these procedures throughout the process and not cease to be assisted in the application of the system of experts that alerted of these opportunities.


Tax Benefits

The tax rules governing this benefit provide VAT exemptions, IP, IRAE and exemptions from all taxes in general whose application corresponds, during the import of goods uncompetitive fixed assets of the domestic industry involved in the project.


In the case of IRAE an important exemption from tax in many cases becomes a crucial factor to evaluate the feasibility of the project is established. This exemption is usable in the span of several exercises that sets based executive implementing regulatory guidelines set forth by the type of project standards. These same rules also incorporate an array of objectives used in the project determines the amount of the exemption, which is set as a percentage of tax payable.


At this early stage, it is important to have the support of an advisor to ensure that the maximum benefits compatible with the nature of the investments are implemented.


Control and monitoring

Once granted the benefits, the company is obliged to supply regular information on the implementation of the project, which is aimed COMAP and the National Directorate of Industries. This information must be filed within four months of the close of each fiscal year.


An efficient process approach involves using this instance not only for routine preparation of the information to hand regarding the investment effectively executed, but as an opportunity to make an intelligent process control which not only deficit situations may arise in the implementation but also those in which the reality of the investment has exceeded expectations, both in amount and by achieving higher initial objectives. These situations allow reaching a redevelopment project with the possibility of getting greater benefits than those originally granted.


Final Thoughts

It is in all evidence the importance of addressing this opportunity to access tax benefits by way of the presentation of investment projects as a continuous process, including the enforcement of the indicators and the committed investment.


This process begins with the preparation of the submission to apply for benefits and culminates with the latest information to be delivered to Comap and, many times, can get at the opportunity to extend the benefits originally granted.

KPMG has the expertise and experience necessary to assist investors in achieving maximum benefits of this regime.


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