Law 27349 (the "Law"), published in the Official Gazette on April 14 2017, also known as the Venture Capital Law, sets forth certain favorable conditions aimed at helping venture capital companies.
Although it is true that the introduction of the Simplified Corporation (SAS) - described in previous NLs - is the most important aspect of this Law, it also introduces fiscal benefits.
In only four articles, Chapter II known as "Tax Treatment" mentions certain benefits which include the following:
The Law provides for the possibility of deducting from the Income Tax certain percentage of capital contributions made by investors in the venture company. Deduction percentage. The Income Tax may be deducted up to 75% of the contribution made by investors in the venture capital. The limit is 10% of the net taxable income from either the fiscal year or the proportionate term calculated as from the commencement of the activities. Deduction percentage in less developed zones and with less access to financing. The percentage may be up to 85% of the contributions made. The remaining percentage may be deducted within 5 fiscal years immediately after the year the contributions were made. Requirements for obtaining the benefit. The investment must be maintained for two years as from the fiscal year when the contribution was made. If the investor requests the full or partial refund of the contribution, he must include in his Tax Income affidavit the deducted amount and the applicable compensatory interests. The benefits will not apply when investment is made after the company ceases to be an Enterprise. The annual maximum percentage for applying to this benefit is 0, 02 % of the nominal Gross Domestic Product (GDP). This percentage will be designated provided an investment commitment is made, and in accordance with the mechanism established by the Executive. Retroactive application....