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Tax benefits for industries engaged in renewable alternative energy generation

Tax benefits for industries engaged in renewable alternative energy generation

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After several debates, Law 3009 was approved, regulating the electricity production from non-hydraulic non-conventional renewable energy sources (NCRE).

1. What is the purpose of this new Law?

The Law seeks to strengthen the legislative order by promoting the development, production, and use of clean energies, fostering and diversifying the obtaining of electric energy with self-generation, cogeneration, and non-conventional renewable energy generation systems, which will guarantee the population’s energy supply.

Likewise, it seeks to develop the non-hydroelectric power market, an industry currently inexistent in our country. The idea is that a private individual can install the equipment and produce, use, and market it through the ANDE (Administración Nacional de Electricidad – National Electricity Administration).

2. What are the alternative energy sources?

Alternative energy sources include biomass (from the spontaneous or induced degradation of any organic matter), wind (movement of air masses), geothermal (heat in the earth’s subsoil), and solar (the sun’s electromagnetic radiation).

3. Applicable Tax Regime

Fee

According to Law 3009, the Application Authority shall collect a fee equivalent to 1% of the transactions carried out by the Licensee or the Joint Venture Company, for which an affidavit of the income resulting from the annual commercial balance shall be filed. 

Benefits

Access to tax exemption

The Licensee Companies or Joint Venture Companies are subject to the tax regulations in force in the country, being able to access the benefits of the national tax exemption laws for the import of equipment, machinery, and other goods necessary for the construction of the generating plant and auxiliary facilities, including the Transportation Lines, as well as those of the Maquila Law.

Non-payment of taxes

Likewise, the export of electric energy will be carried out freely, with prior authorization of the Application Authority. It will not be subject to any national, regional, or municipal tax. Dispatches of natural gas imports or electric energy exports will be made quarterly, and the quantities will be determined based on meters installed at the entry and exit points under the control of the customs authorities and the Enforcement Authority. 

To access this regulation, please click here.

Source: Abc 26/11/21

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