TECHNOLOGY TRANSFERS IN ARGENTINA
The Argentine Transfer of Technology law No. 22,426 (Ley de Transferencia de Tecnología) governs trademark, patent, industrial designs, models and know how license agreements, as well as any other technology transfer agreements entered by an Argentine resident and a non-resident as licensor ("Agreements").
There is no legal requirement to register the Agreements with the Argentine Patent and Trademark Office, INPI (Instituto Nacional de Propiedad Industrial). However, registration provides several advantages.
1. Advantages of Registration with INPI
Registering an Agreement with INPI provides the following advantages:
a. Legal Acknowledgment of the Agreement's Date
This is relevant under Argentine law because the date of execution of the agreement can by challenged by third parties unless it has been acknowledged.
b. Avoidance of Double Taxation
Avoidance of double taxation per to international agreements entered by Argentina with the governments of Germany, Australia, Canada, Brazil, Chile, Denmark, Spain, Finland, France, Italy, Belgium and Swede.. There is a bilateral agreement signed between Argentina and the United States, but Argentina has not ratified it yet.
c. Lower Presumed Net Income
Lower presumed net income is Used to Calculate Licensee's tax Obligations when Royalty Payments are Transferred Outside Argentina.
1) In the event of technical assistance or consulting agreements of services not obtainable in Argentina, the presumed net income to calculate the licensee's income taxes is 60% of the royalty payment (instead of 100% of the royalty payment); and
2) In the event of assignment of rights, patent or trademark licenses, or any other transfer of technology, the presumed net income of these transactions is 80% of the royalty paid (instead of 100% of the royalty payment).
d. Lower Withholding Tax
Royalty payments to a non-Argentine licensor are subject to a lower withholding income tax rate as indicated below.
1) Royalties related to registered technical assistance or consulting agreements of services not obtainable in Argentina are subject to 21% withholding tax of the royalty payment. Royalties of unregistered agreements are subject to 35% withholding tax; and
2) Royalties related to registered assignment of rights, patent or trademark licenses, or any other transfer of technology, are subject to 28% withholding tax. Royalties of unregistered agreements are subject to 35% withholding tax.
In order to deduct the exemptions from payments abroad, it is necessary to keep updated the estimation conducted at the time of registering the contract before INPI. Otherwise, royalties paid in excess of this estimation you would not be deductible (according to the Decca Piazza case of September 2002).
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