News Foreign Trade, Tax and Regional Development

Dear Partners,

We are contacting you to convey some news regarding:

1. FOREIGN TRADE:
   • Reminder: call for Plenary Meeting of CEMBRAR - Bilateral Agenda and Priorities of the Private Sector
   • BCRA News: Access to the exchange market for companies that increase their exports in 2021
2. TAX:
   • The Senate approved changes to the corporate income tax
   • Extension of suspension of tax executions and AFIP seizures
3. REGIONAL DEVELOPMENT: “Federal Program to Strengthen Productive Reactivation”

1. FOREIGN TRADE
BCRA news: access to the exchange market for companies that increase their exports in 2021

The Central Bank of the Argentine Republic (BCRA) announced throughthe Communication A 7301 a new measure of partial relaxation of the restrictions imposed in 2020 by Communication A 7030.

The modification will allow those exporters of industrial goods, mining products and fuels that increase their external sales during 2021, in relation to 2020, to have a percentage of the foreign currency from said increase without needing to have the “conformity” of the BCRA.< br />
The enabled currencies can be used for:

• Payment of debts for importation of goods (from the maturity of the capital), Refinancing of debt abroad, amounts that exceed 40% of the original maturities may be disbursed - after having implemented the refinancing plan - depending on the values ​​enabled by the “certificates of increased exports”,
• Cancellation of debts with related companies for the importation of services and for financial debt (as of the maturity of the capital), and
• Issuance of dividends for closed and audited balance sheets.

The “free disposal” percentages vary depending on the currency settlement period, which in turn is related to the incorporation of added value of the exported merchandise. To wit:

• Goods with settlement periods of up to 30 calendar days (fuels) may have 5% of the amount of incremental exports;
• Goods with settlement periods of up to 60 calendar days (mining products) will be able to access 10% of the increase in exported amounts;
• Goods with settlement terms of 180 dies or more (industrial products), may use up to 15% of the increase in exports.

To access the benefit, a “Certification of increase in exports of goods in 2021” must be obtained from the financial institution with which the company usually operates, to determine the maximum amount of foreign currency in the exchange market that the company can access. exporting company without the need for “authorization” by the BCRA.

It should be noted that, in order to qualify for the benefit, companies must have exported in 2020. The exports to be considered must correspond to their own operations, not operations on behalf of third parties and must have a certificate of compliance with SECOEXPO. A maximum increase in external sales to be computed is set at 30%. The communication clarifies that, in the event that the exporter combines increasesos and decreases in the different types of goods and/or the total increase exceeds the equivalent of 30%, the calculation will be made based on a distribution between the categories in which there was an increase.

It is also stipulated that, to access the benefit, exporting firms accept the price agreements of the national government, if applicable (such as those agreed with the dairy sector), and that they must have met the foreign currency entry deadlines.

At UIA we continue to dialogue with the entity to achieve greater flexibility in these restrictions and support the efforts of those companies that have difficulties in accessing the foreign currency necessary for production.

For more information, contact the Head of the PYMI and Regional Development Department, Francisco Abramovich (fabramovich@uia.org.ar ) and/or the Head ofl Department of Trade and International Negotiations, Eva Bamio (ebamio@uia.org.ar / comercio@uia.org.ar).

Reminder: Call for CEMBRAR Plenary Meeting - Bilateral Agenda and Priorities of the Private Sector

From the Argentine Industrial Union (UIA) and the National Confederation of Industry of Brazil (CNI), the next plenary meeting of CEMBRAR is called, scheduled for June 10 at 2:30 p.m. aimed at companies interested in the bilateral relationship. There will be simultaneous Spanish-Portuguese translation. To register, you must enter this link.

We invite our members to sign up and, in the case of cameras, also currentraise the list of representatives of partner companies of your entities that wish to participate in the next CEMBRAR activities by registering in this form.

The plenary meeting will have two panels that will address agenda topics related to the Common External Tariff, Mercosur external negotiations, regulatory convergence and the possibilities of advancing in the facilitation of trade in goods between both countries. It will be attended by Ambassadors Almeida Salgado and Daniel Scioli. In this way, it will be possible to have an updated overview of the bilateral trade relationship and the actions that can be carried out jointly in order to advance issues of interest to our sector. For more details consult the program.

For any questions or queries, contact the Department of Commerce and International Relations at comercio@uia.org.ar.

2. TAX:
The Senate approved changes to the corporate income tax

Last Wednesday, June 2, the Senate of the Nation approved the law that modifies the income tax for corporations, without modifications with respect to the text coming from the Chamber of Deputies.

Numerous efforts were carried out by the entitySince the first presentation of the bill by the Executive Branch on March 11, to express before legislators and officials the negative impact that it can generate on the productive reactivation capacity of companies and the investment necessary to get out of the crisis. pandemic.

The law that has just been passed not only does not reduce the profit rate for the entire SME universe, but also no company will see its rate reduced compared to the 25% that should govern in 2021.

At UIA years ago we promulgated the need to reduce the profit rate for all MSMEs, but this must occur without increasing the pressure on the rest of the companies, especially in a context of pandemic and a long recession that a large part of the sector has been going through. productive.

It is important to highlight that the project was modified in its treatmentto in the Chamber of Deputies, raising the floor to be reached by the maximum rate of 35%, from $2.6 million in the original project to $50 million in the text finally sanctioned. However, with this sanction, the tax pressure increases for around 2,500 industrial companies that represent approximately 56% of formal employment, 70% of the wage bill, and 70% of the collection of this tax. These companies drive the largest proportion of production, employment, investment and push the rest of the value chain.

For more detail on the impact, you can analyze the attached report prepared by UIA.

Click here to access the sanctioned text.

For any questions or queries, contact the Policy Department.Tax ca (lucioc@uia.org.ar/tributaria@uia.org.ar) and the Department of Legislation and Parliamentary Relations (falcalde @uia.org.ar/legislacion@uia.org.ar).

Extension of suspension of tax executions and AFIP seizures

Through the RG 5000/2021, the AFIP extended the suspension of the initiation of tax enforcement trials and seizures against micro, small and critical sectors (as defined for REPRO II).

In the case of the rest of the subjects, the suspension only reaches eseizures on funds and/or securities of any nature, deposited in financial institutions or on accounts receivable, as well as judicial cash intervention.

In the case of the rest of the subjects, the suspension only extends to embargoes on funds and/or securities of any nature, deposited in financial institutions or on accounts receivable, as well as judicial cash intervention.

The amounts claimed for Solidarity Contribution and Personal Assets are excluded from the benefit.

The measure, which was valid until May 31, was extended until August 31, 2021.

For any questions or queries, contact the Tax Policy Department (lucioc@uia.org.ar / tributaria@uia.org.ar) and the Department of PyMI and DevelopmentRegional Development to (fabramovich@uia.org.ar/pymi@uia.org.ar).

3. REGIONAL DEVELOPMENT:
“Federal Program to Strengthen Productive Reactivation”

The Ministry of Productive Development of the Nation created the Federal Program to Strengthen Productive Reactivation whose objective is to provide benefits to those companies that generate new jobs that represent an increase in their personnel payroll.

The benefit will be granted through Non-Refundable Contributions to companies in Provinces that adhere to the program, financed by FONDEP, and will have a maximum duration of 36 months, which cannot be extended from December 2024, the end date of the Program.

Each provisionncia must make its own calls for the program in which it may limit or expand the activities covered by the benefit, which in principle are those listed in the annex to Resolution 245/2021 that creates the program and includes agricultural, industrial and information and telecommunications.

We will monitor the progress of this program from the Department of PyMI and Regional Development (fabramovich@uia.org.ar / pymi@uia.org.ar).

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