IRAE exemption in the Software Sector
In 2018, tax benefits were established for companies that produce software, provide development services and related services.
In order to carry out the analysis of the IRAE exemption, it is necessary to separate the income into two types.
1. Software production
For the years beginning on January 1, 2018, the income derived from the lease, use, assignment of use or disposal of software is exempt from IRAE, provided that they are registered in accordance with the intellectual property regulations Law No. 9,739 , and in the corresponding cases, present the authorization of exclusive use and exploitation in favor of the entity in which the owner of the right is the final beneficiary.
The exemption percentage is calculated by performing the following quotient for each intangible asset produced:
% of exoneration =
(Direct costs and expenses) x 1.30
Total expenses and costs
The numerator will exclusively consider the expenses and direct costs incurred by the developer and the services contracted with unrelated parties, both residents and non-residents, or with resident related parties.
In the denominator, the expenses and costs corresponding to the concession of use or acquisition of intellectual property rights, and the services contracted with non-resident related parties are added to the amount obtained in the numerator.
2. Provision of software development services and related services
For fiscal years beginning on January 1, 2018, income is exempt from IRAE provided that the following conditions are met:
employ full-time human resources in numbers commensurate with the services rendered, qualified and adequately remunerated; and
the amount of expenses and direct costs incurred in the country for the provision of such services exceeds 50% of the amount of expenses and total direct costs incurred in the year for the provision of the same.
Sole proprietorships, de facto partnerships and civil companies are excluded from the exemption mentioned in point 1 and 2.
To access the IRAE exemption benefit mentioned in points 1 and 2, companies in the software sector must comply with the following requirements:
submit a sworn statement along with the IRAE statement detailing the information requested in order to verify that it is included in the exemption
Record the exemption coefficient or if it is totally exonerated from IRAE in the documentation that supports the corresponding operation. If said proof is not included in any of the vouchers, all the income generated in the year will be unable to qualify for the exemption.
The companies that were in operation as of 11/30/2018, to be included in the aforementioned IRAE exemptions, had to apply for the electronic tax receipt regime before March 1, 2019.
Companies that start activities after the date mentioned in the previous point must apply for the electronic tax receipts regime within 90 days from the start of said activities.
La normativa tributaria establece beneficios fiscales para las empresas que producen software, prestan servicios de desarrollo y vinculados.
A los efectos de realizar el análisis de la exoneración del impuesto a la renta (IRAE), resulta necesario separar las rentas en dos tipos:
1. Producción de software
2. Prestación de servicios de desarrollo y vinculados