On January 11, 2022, Decree No. 2371/2022, complementary of Law No. 15,325 of the Province of Buenos Aires (the “Decree”), was published in the Official Gazette of the Province of Buenos Aires. Following the publication of the Decree, User-Generators of the Province of Buenos Aires, authorized to generate energy from renewable sources for self-consumption, may register in the Registry of Users-Generators of Renewable Energy of the Province of Buenos Aires (the “RUGER”, for its Spanish acronym, Registro de Usuarios-Generadores de Energía Renovable de la provincia de Buenos Aires) and benefit from tax exemptions related to Stamp Tax and Gross Income of such Province.
I. Legal Background
Law No. 27,424, passed by the National Congress on November 30, 2017, approved the federal regime that promotes distributed generation of renewable energy integrated into the public electricity grid (for additional information on Law No. 27,424, please see https://www.trsym.com/renewable-energy-regulation-of-distributed-generation-law-no-27424/?lang=en). Article 40 invites the provinces and the City of Buenos Aires to adhere to such law and pass any specific regulation.
Within such framework, Law No. 15,325, passed by the Congress of the Province of Buenos Aires on April 21, 2022, adhered to Law No. 27,424.
Law No. 15,325 declares of provincial interest distributed generation renewable energy generation, for self-consumption and eventual injection of energy surplus into the provincial grid.
Furthermore, by Law No. 15,325, the Province of Buenos Aires adheres to the promotional, tax, fiscal and financing benefits scheme set forth by Law No. 27,424.
II. Relevant aspects of the Decree
The most relevant aspects of the Decree are described below:
a. Enforcement authority
The Decree designates the Ministry of Infrastructure and Public Services (or any legal successor thereto) as the enforcement authority of Law No. 15,325. The enforcement authority will determine the technical, legal, economic, contractual, rate terms, and all other necessary matters that are necessary to allow the application of the distributed energy generation scheme in the Province of Buenos Aires.
Likewise, the enforcement authority is entrusted to enter into agreements with the Bank of the Province of Buenos Aires (Banco de la Provincia de Buenos Aires) to offer special promotional credit lines.
b. Definition of User-Generator
“User-Generator” is defined as the user of the public electricity distribution service of provincial or municipal distributors that installs renewable generation equipment for self-use, that may inject any surplus thereof to the grid, and meets the technical requirements determined by the enforcement authority. Large Users or self-generators of the Wholesale Electricity Market (WEM) are not included, as they are ruled by Law No. 27,424.
c. Creation of RUGER and issuance of a tax exemption certificate
The Decree creates the RUGER. The RUGER will be implemented for the registration of User-Generators, as determined by the enforcement authority, through the organization of a data base that enables access to the provincial tax exemptions established by Law No. 15,325 and special credit lines, as well as any other benefit or tax incentive that may be foreseen in the future.
For the purposes of processing the provincial tax exemptions set forth in article 4 of Law No. 15,325, the RUGER will issue a User-Generator certificate. In addition, the RUGER will notify ARBA of any certificate that is issued and receives from User-Generators, under the concession area of federal jurisdiction. Such certificate must contain surname and name, or company name, tax id (CUIT), NIS, address, code of the activity included in that benefit (according to the corresponding Nomenclator of Activities of the Tax on Gross Income, of NAIIB 18 approved by ARBA) or their equivalents codes under the Nomenclator of Economic Activities of the Federal Collection System (NAES) of the Arbitration Commission of the Multilateral Agreement (Comisión Arbitral del Convenio Multilateral), details of the respective exemption and term for which it is granted.
d. Taxes for which the exemption is granted and term
User-Generators registered under the RUGER are exempted from the following taxes for a period of twelve (12) years:
- Stamp tax: only applies to the power purchase agreements entered into by the distributor and the User-Generator, as long as the latter is registered in the RUGER, and such inscription is detailed in that agreement; and
- Tax on Gross Income: with respect to the injection of surplus renewable energy into the distribution network by the User-Generator.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó and/or Rocío Valdez.