In an opinion article published today by Diario Financiero newspaper, our partner Alex Fischer comments: “The main advantage of investment funds is that they allow direct access to project financing, without the intermediation of banks or insurance companies. In practice, investment funds are the main channel through which small and medium-sized investors can collectively participate in specific investment projects (…).

At first glance, since banks and insurance companies are subject to income tax, the recent proposal from the Ministry of Finance -which eliminates the exemption applicable to investment funds- might appear to be a technically sound reform (…). However, that approach overlooks a key fact: both banks and insurance companies have special rules for determining their taxable base, including deductions for provisions and technical reserves. These adjustments significantly reduce their effective tax burden, advantages that investment funds do not have access to.”

To read the full article, click this link.