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On 23 August 2024, the Argentine National Executive Branch published in the Official Gazette Decree 749, which establishes operational aspects for the purpose of implementing the Incentive Regime for Large Investments (RIGI), established in Title VII of Law No. 27,742 (Bases Law or the Law). (For background, see EY Global Alerts Argentina enacts Bases Law and Tax Package, dated 8 July 2024, and Argentina enacts new incentive regime for large investments, dated 12 July 2024.)

This Alert highlights the main provisions included in the Decree.

The Decree provides details on the sectors to which the RIGI will apply, including the definition of each sector. Minimum investment amounts in computable assets per sector and subsector are established. In general, the US$200m minimum established in the Bases Law is maintained for all sectors, except for the oil and gas sector. For oil and gas, the minimum is increased to US$600m for offshore projects and gas for export, and to US$300m for transportation and storage projects.

The Decree establishes the requirements that suppliers of goods or services with imported goods must meet to enjoy the benefits of the RIGI, the procedure for their adhesion, the destination of such goods and the consequences of noncompliance. The concept of "local suppliers" is defined for the purposes of the RIGI.

The minimum investment amount required to qualify as a "Long-Term Strategic Export Investment Project" is established at US$2b.

Establishing procedures for adhering to the RIGI, the Decree details the requirements to be met and information to be provided (e.g., project description, investment schedule, declaration of non-distortion of the local market, local supplier development plan, project feasibility, among others). The procedure and requirements are established for expanding a pre-existing project while adhering to the RIGI.

The procedure is also established for transferring net operating losses (NOLs) not absorbed by the Sole Purpose Vehicles (in Spanish, "Vehículos de Proyecto Unico" or VPU). Third parties to whom the NOLs were transferred may apply them in the tax period in which they were received and may even apply them to a completed tax period, provided that the transfer is made before the due date of the income tax return for such period. For the acquirer, such NOLs will expire after five years.

The Decree specifies that the 3.5% withholding applicable to dividend distributions by VPUs after seven years will be applied regardless of the period in which the profit being distributed was generated.

The Decree provides that goods imported by a VPU under the customs tax exemption shall be subject to destination verification.

Further, the Decree clarifies that the "start-up date" of the VPU — for purposes of counting the period from which it will be exempted from the entry and liquidation of foreign currency from exports of goods — will be either the date of the first export of the product or the date on which 40% of the minimum amount of investment in computable assets is completed, whichever occurs first.

The Argentine Central Bank may provide that VPUs that have feasibility analyses that include the export incentive (non-entry and settlement of a percentage of foreign currency) may only access the foreign exchange market to the extent that the total amount of foreign currency entered and settled from abroad is, at the time of access, higher than or equal to the value of foreign currency demanded to be transferred abroad.

The Decree creates three new registries: (1) the Registry of Sole Purpose Vehicles, (2) the Registry of Long-Term Strategic Export Investment Projects and (3) the Registry of Suppliers of the Incentive Regime for Large Investments.

Finally, it is provided that, within 30 days from the publication of the Decree, the Tax Authorities, the Argentine Central Bank and other agencies will issue complementary rules.