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May 19, 2021

Argentina modifies regulations for the promotional regime for modern biotechnology

The decree modifies the regulations to allow taxpayers to depreciate assets under one of two methods. The decree also provides rules for obtaining a value-added tax refund, as well as rules for tax credit bonds.  

On 5 May 2021, Argentina published, in the Official Gazette, Decree 289/2021 (Decree 289), modifying the regulations related to the promotional regime for modern biotechnology established by Law 26,270.


On 4 July 2007, Argentina enacted Law 26,270, which established a promotional regime for the development and production of modern biotechnology. Decree 50/2018, issued on 16 January 2018, set forth the regulations, implementing the  promotional regime. The regulations detailed the activities, benefits and obligations covered under the regime.

Decree 289

Decree 289 modifies the Annex to Decree 50/2018, which established the provisions applicable for the promotional regime for the development and production of modern biotechnology.

Activities included

Decree 289 establishes that the following activities are considered promotional activities eligible for the regime:

  • The execution of scientific and technological research projects aimed at the productive development of modern biotechnology
  • The execution of biotechnological research and development projects focused on technology transfer
  • The development of new technologies, products, services, processes and productive improvements within the modern biotechnology sector
  • The incorporation of modern biotechnology in any productive process
  • The analysis of social, environmental and productive impacts in the implementation and incorporation of new technologies, products and processes in the biotechnology sector

Fixed assets depreciation

Eligible individuals and companies may depreciate the assets assigned to the projects under one of the following options:

  • Depreciate from the tax period in which the asset starts to be economically utilized, considering the provisions of the Income Tax Law
  • Depreciate fully in the first tax period in which the asset starts to be economically utilized

In addition, Decree 289 clarifies that taxpayers may benefit from the accelerated depreciation of fixed assets and the early refund of value-added tax (VAT) on purchases of fixed assets provided by Law 26,270.

VAT refund

The VAT on purchases of fixed assets must be credited against other federal taxes or it must be refunded to the taxpayer after three months have elapsed since the period in which the respective investments were made. The Ministry of Productive Development, Authority of Application must request the provision of a guarantee for an amount equal to 100% of the anticipated VAT, which will remain in force until the approval by the Authority of Application of the report evidencing the taxpayer’s compliance with the promotional project.

Tax credit bonds

Individuals and entities eligible for the regime may obtain a tax credit bond equal to 50% of the expenses actually paid for research and development services related to the promotional projects. The tax credit bond must be issued in the taxpayer’s name and must be non-transferable. It may be applied for a term of 10 years from the date of its issuance to pay income tax and VAT.

Verification and control fee

The beneficiaries of the regime must pay a fee to the Authority of Application, which will verify that the beneficiaries complied with the regime’s requirements. The Authority of Application will determine the amount of the fee, which must not exceed 7% of the amount of the tax benefits received.


For additional information with respect to this Alert, please contact the following:

Pistrelli, Henry Martin & Asociados S.R.L., Buenos Aires

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young Abogados, Latin American Business Center, Madrid

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


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