Friday, January 21

A law that puts the country on the path of growth

As strange as it may seem in our country, promoting the development and export of software seems to be a state policy to which the different governments adhere without the slightest disagreement. First with the Software Industry Promotion Law (25922), sanctioned in August 2004 and now with the new Knowledge Economy Promotion Regime (27570), sanctioned in 2020.

This new law covers a greater number of sectors, it is no longer limited only to software development companies, it has a specific section that encourages the hiring of people with a higher degree of professional training and, although it continues to have a strong “exporting” character, it is It facilitates the registration of young companies that do not yet have sufficient billing history.

In the previous regime, the company could only benefit from the reduction of the employer’s burdens of the personnel directly affected by the activity, which in my opinion, was not entirely correct, since the company needs 100% of its staff to be able to operate. With this new law, the entire staff is covered by tax benefits. On the other hand, before companies had to be either clearly exporters, or have a large percentage of their work (it reached values ​​of 9% of annual turnover) applied to Research and development (R&D) projects. And if this was the case, the justification and documentation of all R&D activity would become a complex task, since many of the projects that are faced do not necessarily have a linear development, or are merged with others, or are they abandon due to technological or commercial changes or simply because they are not viable.

With this new law, on the other hand, it is proposed that the company must comply with two of three conditions:

  • Maintain a system of continuous improvement of processes, through a known quality management system. At this point the issue was relaxed, since previously a certification of the system was requested through a recognized body.

  • Make Investments in R&D, here the percentages change depending on the size of the company, but they range from 1 to 3% of the annual turnover. You can also invest in staff training between 1 and 5% of annual turnover, also depending on the size of the company.
  • Exporting goods and services promoted by this law between 4 and 13% of annual turnover, as in the previous cases, this percentage depends on the size of the company.

In summary, training is added as a means of accessing the benefit of this law, since it establishes that investments that are destined to train the unemployed population under 25 years old and over 45 years old can be calculated at double their value. Also women who have access to a formal job for the first time and other vulnerable groups that can be determined in the future.

The only questionable point is the cut in benefits: this new law establishes that 1.5% of the tax benefit obtained annually must be allocated to the Entrepreneurial Capital Fund (FONDCE), and 4% to the cost of the audit of the regime. In short, 5.5% must be subtracted from the profits obtained. Although, it is a reduction of the previous regime that reached 7% of the benefit obtained, it is still something that in my opinion should be reversed, or reduced directly from the benefit and avoid all the bureaucracy that these processes entail.

By Javier Sánchez, president of Global Computing Solutions