Dear clients and friends,
On Tuesday, April 19th, the Legislative Assembly approved the Law for the Promotion of Innovation and Technological Manufacturing. This law aims to contribute to the economic growth and sustainable development of the country, through the promotion of innovation and technology manufacturing developed in the national territory.
Said law establishes the Ministry of Economy as the authority responsible for its application, and the Ministry of Finance as responsible for the surveillance and control of the corresponding customs and fiscal regime.
It distinguishes as beneficiaries of the law natural or legal persons, national or foreign, who develop within the national territory a new investment in innovation projects or technological manufactures.
Activities encouraged by said law are activities related to at least one of the following items:
• Programming, management, maintenance, consulting and analysis of computer systems or software
• Development and commercialization of cloud computing and data flow services; artificial intelligence, big data analysis; distributed ledger technology; cybersecurity solutions
• Technologies based on the manufacture of parts, materials and equipment or facilities, assembly, including manufacturing plants for technological equipment or hardware, semiconductors, communications technology, robotics, nanotechnology, aircraft and unmanned vehicles
• Engineering and systems technologies necessary to integrate basic industrial technologies into global production chains.
Natural or legal persons, national or foreign, who engage in such activities, may request a Qualification Agreement from the Ministry of Economy to qualify for the following tax incentives for a period of fifteen years:
• Total exemption from Income Tax, with respect to incentivized activities
• Exemption from all types of Income Tax withholdings, with respect to incentivized activities
• Full exemption from municipal taxes on the net assets declared by the beneficiaries
• Exemption from payment of capital gain
• Total exemption from payment of import customs duties and taxes levied on the importation of goods, supplies, machinery, equipment and tools necessary for the development of the incentivized activities.
The benefits of the law will not be applicable to investments made prior to its entry into force, nor to natural or legal persons who enjoy benefits included in other special tax regimes such as free zones, parks and international service centers.
The law must still be sanctioned by the President of the Republic and published in the Official Gazette and the regulations and complementary normative must be issued.
For this and any other corporate legal advice, our professionals are at your service. For more information, please contact us at info@mayora-mayora.com or visit our website www.mayora-mayora.com.
