On March 6, 2026, the President of Argentina enacted the Labor Modernization Law (the “Reform”), which introduced, among other measures, the Incentive Regime for Medium Investments (RIMI).
This is a new tax incentive scheme aimed at fostering productive investment in Argentina, with a clear focus on Micro, Small and Medium-Sized Enterprises (MSMEs). It combines incentives under Income Tax and Value Added Tax (VAT) and is intended to complement the Large Investment Incentive Regime (RIGI).
The benefit applies throughout the national territory and is designed to accompany investment decisions made during the first two years following its entry into force.
Target beneficiaries
The regime is aimed at companies that qualify as Micro, Small or Medium-Sized Enterprises under Law No. 24,467, up to the category of Medium Enterprise – Segment 2, whether of domestic or foreign capital, that carry out productive investments in Argentina within the established timeframe.
The regime only applies to investments executed within the first two years following its entry into force. In this regard, RIMI is not a permanent tax benefit but rather a time-limited incentive designed to encourage companies to bring forward investment decisions and capitalize on the opportunity while it remains available.
What qualifies as a productive investment?
The concept of productive investment includes:
- The acquisition, construction, manufacture and/or importation of new movable assets (with the express exclusion of automobiles) that are depreciable for Income Tax purposes.
- The execution of works directly aimed at the development of productive activities within Argentine territory.
Investments in financial assets, portfolio investments and inventory are expressly excluded.
In other words, the regime does not promote financial placements or commercial stock, but rather capital goods and infrastructure that directly increase productive capacity.
Although the regime generally establishes minimum investment thresholds, certain strategic investments (such as irrigation systems and equipment, high-energy-efficiency assets, anti-hail netting for the agricultural sector and livestock assets) may access the benefits without meeting those thresholds.
Minimum investment thresholds
To qualify for the benefits, the total investment made during the relevant period must reach certain thresholds, measured in U.S. dollars, depending on the MSME category:
- Microenterprise: USD 150,000
- Small enterprise: USD 600,000
- Medium enterprise – Segment 1: USD 3,500,000
- Medium enterprise – Segment 2: USD 9,000,000
These thresholds operate as an objective eligibility requirement, except in the specific cases mentioned above (irrigation systems, energy-efficiency assets, anti-hail netting and livestock), which may qualify regardless of the investment amount.
Benefits
- Accelerated depreciation for Income Tax purposes
The first major incentive under RIMI is the possibility to opt for an accelerated depreciation regime for Income Tax purposes. Depreciation is the mechanism through which the cost of an asset is gradually deducted over its useful life. Under the general regime, this deduction is spread over several years, whereas RIMI allows it to be concentrated over a shorter period.The practical effect is an earlier reduction of the taxable base and therefore lower tax payable in the first fiscal years, significantly improving the project’s financial cash flow.
Taxpayers may choose between the general system or the accelerated depreciation scheme, which provides for:
- Depreciable movable assets (in general): two equal and consecutive annual installments.
- Works: depreciation based on a useful life reduced to 60% of the normal period.
- Agricultural irrigation equipment and high-energy-efficiency assets: fully depreciable in a single installment.
- Depreciable livestock assets: single installment.
- Anti-hail netting: single installment.
The election is integral and, once exercised, must be reported to ARCA and applied without exception to all investments covered by the regime. It is not possible to select assets individually.
- Early VAT refund
The second key feature of RIMI concerns the treatment of VAT input tax credits generated by eligible productive investments.
The regime allows taxpayers to request a refund of VAT input credits once three monthly tax periods have elapsed since the credit became available for offset. In practical terms, this enables taxpayers to accelerate the recovery of VAT associated with the investment, reducing the financial burden typically involved in waiting to offset such credits against future VAT liabilities.
For capital-intensive investment projects, this element can be particularly significant, as VAT often represents a substantial portion of the initial outlay.
The regime also establishes a minimum holding requirement for the assets, reinforcing its productive purpose and preventing the benefit from being used for purely transactional purposes.
Assets must remain in the beneficiary’s patrimony for at least two fiscal years from the moment they are allocated to the productive activity. If the asset is sold, transferred or otherwise ceases to be part of the taxpayer’s patrimony before that period, the benefits are forfeited, and the beneficiary must repay the tax savings and/or refunded tax credits, plus the corresponding interest.
However, the regulation provides relevant exceptions. The benefit is not lost when the asset is replaced with another asset of equal or greater value, when its destruction results from force majeure or unforeseen circumstances, or when at least one-third of its useful life has elapsed, under the conditions to be established by regulation.
Exclusions and forfeiture grounds
The regime establishes certain exclusions. Entities may not adhere if they:
- Have final convictions confirmed by a second-instance court for crimes related to tax, customs, foreign exchange or corporate criminal liability regimes.
- Have been declared bankrupt.
- Have final, enforceable and unpaid tax, customs or social security liabilities.
- Are benefiting from RIGI or other incentive regimes for the same investments.
If any of these situations arise after joining the regime, the benefits may be fully revoked.
In the event of revocation, the beneficiary must repay the refunded tax credits or the tax underpaid, plus compensatory interest, and may be subject to a fine of up to twice the amount of the benefit obtained.
Timing of the investment
For purposes of the regime, the investment is not considered to have been made when the asset is paid for or acquired, but rather in the fiscal year in which the asset is effectively placed into service and begins to be used to generate taxable income.
This criterion is key from a practical standpoint, as it determines the tax period in which the benefits may be applied, directly impacting the timing of the project and the realization of the tax savings.
Regulation and next steps
ARCA must issue the implementing regulations within fifteen calendar days from the regime’s entry into force and clarifies that such regulations may not impose additional restrictions solely by reason of adhering to RIMI.
In practice, operational details such as procedures, requirements and the VAT refund mechanism will be decisive in determining the actual scope of the benefit, making the implementing regulation critical when structuring each investment.
Conclusion
RIMI introduces an investment promotion framework focused on the MSME segment, built around two tools with a significant financial impact: accelerated depreciation for Income Tax purposes and early VAT refunds. Rather than merely reducing tax rates, the regime effectively anticipates the recovery of tax benefits and improves the economic profile of investments during their initial years.
For companies planning capital expenditures, plant expansions, technology incorporation or energy-efficiency improvements, the regime may represent a concrete opportunity to enhance the financial viability of their investment projects.
