This article was written by Guillermo Malm Green, a Partner at Brons & Salas.

Law No. 27506, published in the Official Gazette on June 10, 2019, created a regime for the promotion of “knowledge economy” businesses, broadening, modernizing, and simplifying the software industry promotion regime enacted 15 years ago. 


“Knowledge economy” is the production of goods and provision of services based on the increasing use of information and communication technologies and highly skilled human capital.

Law No. 27506 is intended to promote, through the granting of tax benefits, any business related to the development of products and services of software, audiovisual production, biotechnology, electronic and communications services, nanotechnology, the aerospace and satellite industry, nuclear engineering, artificial intelligence, industrial Internet and robotics, among others.

Sectors Covered

This regime, which mainly provides for tax benefits, is broader than the one currently in force and covers additional businesses/sectors, namely:

a) Software and IT and digital services, including:

(i) development of software products and services (SaaS) already existing or that may be created in the future, to be used for activities such as e-learning, interactive marketing, e-commerce, application service provision, electronic publishing and editing of information, always provided that they form part of a comprehensive IT solution and add value to it;

(ii) development and fine-tuning of original software products registrable as unpublished or published works;

(iii) implementation and fine-tuning for third parties of proprietary or third-party software and of registered products;

(iv) development of custom software if this business enables the creation of added value, even if the relevant contracts provide for the assignment of intellectual property to third parties;

(v) value-added IT services focused on enhancing the security of equipment and networks, the reliability of software programs and systems, the quality of systems and data and the management of information and knowledge of the organizations;

(vi) development of system parts, modules, routines, procedures and documentation, always provided that they are supplementary to or capable of being integrated into registrable software products;

(vii) design, coding, implementation, maintenance, remote support, troubleshooting, conversion and/or translation of programming languages, feature additions, preparation of user documentation and system quality assurance or advice, among other services, all of them to be provided in connection with software products and intended for foreign markets;

(viii) development and fine-tuning of software created to be included into processors (embedded software) used in different kinds of goods and systems;

(ix) videogames; and,

(x) cloud computing services;

b) Audiovisual production and post-production, including digital format;

c) Biotechnology, bio-economy, biology, biochemistry, microbiology, bioinformatics, molecular biology, neurotechnology and genetic engineering, geoengineering, and their tests and analyses;

d) Geological and prospecting services and electronic- and communication-related services;

e) Professional services, only if for export;

f) Nanotechnology and nanoscience;

g) Aerospace and satellite industry, space technologies;

h) Engineering for the nuclear industry;

i) Manufacturing, fine-tuning, maintenance and introduction of goods and services oriented to production automation solutions, including feedback loops of physical processes into digital processes and vice versa, being at all times exclusively characterized by the use of Industry 4.0 technologies, such as artificial intelligence, robotics and industrial Internet, Internet of Things, sensors, additive manufacturing, augmented and virtual reality.

Also included are engineering activities, exact and natural sciences, agricultural sciences and medical sciences related to experimental development and research tasks.

The enforcement authority will issue explanatory regulations intended to define the scope of the activities and businesses subject to this regime. In addition, the Argentine Executive Branch may broaden such activities and/or business in line with emerging technologies.


The benefits for the companies that adhere to the regime are the following:

•           Tax Stability: the total national tax burden will not be increased −direct taxes, rates, fees, import/export duties− while the regime is in force. This benefit will also apply to the tax burden in the City of Buenos Aires, the provinces, and any municipalities, to the extent that they have adhered to the law.

•           Labor Cost Reduction: subtraction of the maximum amount set forth in Section 4 of Executive Order 814/01 (currently AR$ 17,509.20) from the tax base applicable to calculate employer dues payable by the beneficiary company. A tax credit bonus may also be obtained, worth up to a given amount of the employer dues that would have been payable. This tax credit may be offset against the income tax and the value added tax.

•           Income Tax: the tax rate is reduced to 15%, insofar as the personnel is kept.

•           Withholdings and Surcharges: beneficiaries will not be subject to value added tax withholdings and surcharges.

•           Benefit for Exporters: they may deduct a credit for taxes similar to the income tax actually paid or withheld abroad in the case of Argentine-source income.


This regime is available to companies that, on their own, conduct as their main business (70% of their total revenues) any of the activities promoted by the regime. They must also register at the “National Registry of Beneficiaries of the Knowledge Economy Promotion Regime” and meet at least two of the following requirements:

•           Proving continuous improvements to the quality of their services, products, and/or processes.

•           In relation to the company business, proving disbursements in research and development equal to at least 3% of their total revenues and/or proving that their staff’s training is worth at least 8% of total salaries.

•           Proving exports of goods and/or services arising from the development of any activities promoted worth at least 13% of the total revenues of those activities.

Beneficiaries must pay up to 1.5% of the total tax benefits granted within the framework of this regime into the “Trust Fund for the Development of Entrepreneurship Capital” (FONDCE).

This regime will become effective on January 1, 2020, and its enforcement authority will be the Labor and Production Ministry.


Knowledge Economy is a reality and constitutes a great opportunity for Argentina to grow, create jobs and increase exports. Now is the time to establish the necessary conditions for the next ten years, which will be extremely challenging. The consensus achieved for the enactment of this law is a fundamental step in the right direction.