Buenos Aires, June 4, 2019. Officials of the Ministry of Finance, Interior and AFIP explained the benefits of Sections 205 and 206 of the Productive Financing Act, whose objectives are to channel savings to long-term investments through the capital market, to increase financing for SMEs, and to encourage the construction of social housing.
The regulations provide incentives for closed mutual funds and financial trusts to channel funds into the real economy through the capital market. In addition, it promotes the development of social housing by establishing particular tax benefits for investors.
Under Section 205, investments may be allocated to any type of economic activity within the country without a deadline. In this way, the investor pays the income tax only when it receives the distribution of the fund, that is to say, it is fiscally transparent.
Meanwhile, Section 206 establishes tax benefits in the payment of income taxes for those investments destined to the real estate development of medium and low income housing.
Those vehicles that finance this type of housing will have a 15% reduction in the income tax rate for placements for more than five years (without distribution of shares or participation) and a 0% income tax for placements for more than 10 years.
In recent months, the Ministry of Finance, the Argentine Securities Commission (CNV), the Argentine Insurance Authority (SSN), and AFIP have promoted, in collaboration with the private sector, a set of measures aimed at the promotion of products for voluntary savings, protection and long-term investment.
During the event, the Secretary of Finance, Santiago Bausili and the Undersecretary of Financial Services, Francisco Sosa del Valle, were present on behalf of the Ministry of Finance. In addition, the President of the Argentine Securities Commission, Marcos Ayerra ,and the Vice-Chair of the Insurance Authority, Guillermo Plate, participated. For the Ministry of the Interior, the Secretary of Housing Ivan Kerr attended the event, and so did the undersecretary of Livestock, Rodrigo Troncoso, for the Ministry of Production. The Chair of AFIP, Leandro Cucciolli, also participated.
Representatives of investment funds, construction chambers, insurance companies, stockbrokers, banks and the livestock sector were present on behalf of the private sector.