MercadoLibre granted software development tax benefits

MercadoLibre recently received approval for income tax and payroll exemptions from the Argentine Industry Secretary under a new software development law, guaranteeing the company a reduction of the effective income tax rate for its operations and a reduction on labor costs.

MercadoLibre was granted the tax break retroactively to its September 2014 application. Among the benefits of the law are relief of 60 percent of the total taxable income stemming from software development activities and a 70 percent exemption on payroll taxes for employees involved in software development activities.

MercadoLibre's income tax savings will approach $15.5 from October through December 2015. The payroll tax break will cut labor expenses by $3 million to $4.5 million over the same period.

Established in 2011, the software development tax law is valid through 2019.