THEY ENCOURAGE LONG-TERM INVESTMENTS FOR PRODUCTIVE PROJECTS AND HOUSING DEVELOPMENT
Wednesday May 29, 2019
The Ministry of Finance, Ministry of Finance states that under Presidential
Decree No. 382/2019 published today in the Official Gazette, Articles 205
and 206 of the Law of Productive Financing were regulated aimed at
channeling savings into long-term investments to through the capital market
with efficient tools such as common closed-end funds and financial trusts.
The legal framework and regulatory incentives to enable these instruments
to channel funds to the real economy through the capital market. It also
promotes the development of social housing by providing tax benefits for
private investors.
This implies that both types of instruments will be fiscally transparent,
that is not taxed income tax for income earned in Argentina. The tax
payment will be payable by the investor, who must pay taxes only to the
extent that the proceeds of your investment are distributed, creating a
strong incentive for long term investment.
Article 205 provides for the fiscal transparency of Mutual Funds Closed and
Financial Trust, whose purpose is the development and / or direct
investment in any economic activity within the country, and have been
placed by public offering authorization granted by the CNV.
Meanwhile, Article 206 gives tax breaks to investors closed mutual funds or
financial trusts that aim investment real estate development, mortgage
loans and / or mortgage securities for social housing benefits.
To do this, the application rate of 15% of income tax is set when the
distributions of the bottom is then made of 5 years in the investment or
total relief from 10 years, promoting the expansion of offer mortgage loans
and investment in housing development for populations of middle and low
income.
In recent months the Ministry of Finance, the National Securities
Commission and the Superintendency of Insurance of the Nation have pushed a
package of measures to promote voluntary savings, protection and long-term
investment.
In order to have more efficient vehicles from a tax standpoint, an
exemption was approved tax credits and debits in bank accounts for: (a)
common closed-end funds whose investment object is financing micro, small
and medium enterprises, (b) financial trusts with public offering.
In January this year, by decree (59/2019), the amounts of deductions from
earnings for individuals associated with funds and life insurance and
retirement increased; these values had not been updated since 1992.
In addition, it was agreed with the insurance companies a change in its
rules of investment and, therefore, were funneled about AR $ 12 billion to
SMEs active. The CNV modified the investment object of mutual funds that
flow to capture SMEs.
Also it is working on a change in the regulation of investment companies
and retirement life insurance, which will allocate 10% of their investment
portfolios to real estate assets and infrastructure (section M). An
effective time, this change will mean AR $ 16 billion insurance companies
to real estate and infrastructure projects.
Regulation of Articles 205 and 206 of the Act productive financing is the
last block in this package. The team of Finance, the CNV and the SSN is
working with the private sector on a long-term agenda for the development
of voluntary savings products, investment protection and long term.
The Ministry of Finance, Ministry of Finance states that under Presidential
Decree No. 382/2019 published today in the Official Gazette, Articles 205
and 206 of the Law of Productive Financing were regulated aimed at
channeling savings into long-term investments to through the capital market
with efficient tools such as common closed-end funds and financial trusts.
The legal framework and regulatory incentives to enable these instruments
to channel funds to the real economy through the capital market. It also
promotes the development of social housing by providing tax benefits for
private investors.
This implies that both types of instruments will be fiscally transparent,
that is not taxed income tax for income earned in Argentina. The tax
payment will be payable by the investor, who must pay taxes only to the
extent that the proceeds of your investment are distributed, creating a
strong incentive for long term investment.
Article 205 provides for the fiscal transparency of Mutual Funds Closed and
Financial Trust, whose purpose is the development and / or direct
investment in any economic activity within the country, and have been
placed by public offering authorization granted by the CNV.
Meanwhile, Article 206 gives tax breaks to investors closed mutual funds or
financial trusts that aim investment real estate development, mortgage
loans and / or mortgage securities for social housing benefits.
To do this, the application rate of 15% of income tax is set when the
distributions of the bottom is then made of 5 years in the investment or
total relief from 10 years, promoting the expansion of offer mortgage loans
and investment in housing development for populations of middle and low
income.
In recent months the Ministry of Finance, the National Securities
Commission and the Superintendency of Insurance of the Nation have pushed a
package of measures to promote voluntary savings, protection and long-term
investment.
In order to have more efficient vehicles from a tax standpoint, an
exemption was approved tax credits and debits in bank accounts for: (a)
common closed-end funds whose investment object is financing micro, small
and medium enterprises, (b) financial trusts with public offering.
In January this year, by decree (59/2019), the amounts of deductions from
earnings for individuals associated with funds and life insurance and
retirement increased; these values had not been updated since 1992.
In addition, it was agreed with the insurance companies a change in its
rules of investment and, therefore, were funneled about AR $ 12 billion to
SMEs active. The CNV modified the investment object of mutual funds that
flow to capture SMEs.
Also it is working on a change in the regulation of investment companies
and retirement life insurance, which will allocate 10% of their investment
portfolios to real estate assets and infrastructure (section M). An
effective time, this change will mean AR $ 16 billion insurance companies
to real estate and infrastructure projects.
Regulation of Articles 205 and 206 of the Act productive financing is the
last block in this package. The team of Finance, the CNV and the SSN is
working with the private sector on a long-term agenda for the development
of voluntary savings products, investment protection and long term.