Industrial and agro-industrial micro, small and medium enterprises (MSMEs) in Argentina will soon be able to stop paying withholding taxes on exports. For the wine industry, this benefit means that close to 80 percent of the sector will be positively impacted.
The elimination or reduction of export withholdings would impact three out of four Argentinean wineries. This calculation was made by the National Institute of Viticulture (INV) based on the new government guidelines. The guidelines state that MSMEs exporting up to $500,000 of goods per year will have withholding requirements completely eliminated. This will affect 64 percent of wineries.
Those that export $500,001-$1 million per year will have withholding requirements reduced by 50 percent, benefiting another ten percent of wineries. This amounts to a savings of $164 million for viticulture, as estimated by INV. To qualify, in addition to being on the official registry, a company is not permitted to have exported more than $3 million in goods the previous year.
Martín Hinojosa, president of the INV, said that the elimination or reduction is “extremely important” for exporters to be able to enter the foreign market. He recalled that, for more than a decade, the wine sector has been calling for the elimination and that it is beneficial that the Argentinian government understands that the decision will allow an increase in exports and enable more sales.
While the reduction and elimination for some is a step forward and seen as progress, many continue the work to achieve total elimination of withholdings for all exporters in the sector. dlr
