FRANCE Decree 937/93 Establish a subsidy regime, in the form of fiscal return, applicable to the holders of companies that make sales of new capital goods and of national production for investments in economic activities in the country.

Bs. As., 5/5/93

VISTO the need to accelerate the productive revolution faced by the National Government, and

CONSIDERING:

The economic programme seeks to optimize the use of available productive resources in order to achieve lower actual costs and higher per capita income of the population.

In order to do so, access to the modernization of the productive structure should be encouraged with the encouragement of the entrepreneurship in the field of re-equipment.

That actions for the fulfilment of these objectives should be exercised through mechanisms that facilitate the reconversion of the productive structure.

In addition, the instruments to be adopted must ensure equal access to their benefits by companies that produce and sell the capital goods that are deemed necessary, through an automatic system that reduces the complexity of the procedures.

That is why the granting of a subsidy in the form of fiscal refund in cash equivalent to the QUINCE per SCIENT (15 per cent) of the sale price of the new and manufactured capital goods in the country has been determined as an appropriate way to achieve it.

Moreover, it is necessary for the provinces to adhere to the regime that is instituted by participating in the reduction of the tax burdens that affect the operations that give rise to the return to be favoured, indirectly, by the economic reactivation that will be achieved by the proposed measure.

Moreover, it is essential that the regulations be implemented immediately, in order to avoid the paralysing of the acquisitions of capital goods which, as a logical consequence from their official announcement, occurs until the conclusion of the norm.

That the exercise of legislative powers by the NATIONAL EXECUTIVE PODER, in situations of necessity and urgency such as the present, has the support of the best constitutional doctrine (cf. Joaquín V. González, "Manual de la Constitución Argentina", p. 538, issue 1951; Rafael Bielsa, "Administrative Law", 1954, p. 309) and the jurisprudence of the Supreme Court of Justice of the Nation (Fallos 11:4

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 Artículo The holders of companies that make sales of new and national capital goods destined for investments in economic activities in the country will receive a tax refund of the QUINCE per CENTO (15 %) on the sale price of the aforementioned goods.

Reimbursements referred to in the preceding paragraph shall apply for sales made until 31 December 1994.

Art. 2o o The subjects referred to in Article 1 are the manufacturers that produce and sell the goods mentioned in Article 3, with fabril plant located in provinces that have eliminated seal and gross revenue taxes on these operations, inscribed in the registry that for this purpose enables the SECRETARIAT OF INDUSTRIA And TRADE and communicated such inscription to the IMPOSTITIVE GENERAL DIRECTION.

The pre-established requirement for deletion of provincial levies shall not be applied by the first SESENTA (60) days that have been settled since the entry into force of this decree.

Art. 3o o New and nationally produced capital assets will be reached by the provisions of this regime, which are detailed in the list to be made by the SECRETARIAT OF INDUSTRIA And TRADE and sold by the subjects defined in Article 2. Art. 4o — The sale price of capital assets arising from the invoice and/or equivalent document, net of taxes, discounts, bonuses and/or financial expenses, contained therein shall be considered. The amount arising from the application of the QUINCE per SENT (15 %) referred to in Article 1 will be deducted from the price. This amount must be recorded separately in the invoice and/or equivalent document, it must be an effective reduction in the price of sale in force as at 15 April 1993 and shall not be part of the tax base in the value added tax. Art. 5o o The sale of the goods will be computable for the return when the subjects referred to in Article 2 have made the delivery of the goods to the acquirers who incorporate them into their heritage as a capital asset. Art. 6o o The capital assets subject to the franchise provided by this regime shall not enjoy such profit when their sale, made by the subjects of Article 1 is intended for export to third countries.

If the export is carried out by the acquirer, it must return to the IMPOSITIVA General DIRECTION the amount deducted by the tax refund in the purchase, with more the interests established by Law No. 11.683 (text ordered in 1978 and its modifications) from the date of the respective acquisition to the date of the verification of the taxable fact export according to the rules of Law No. 22.415.

Art. 7o o In the case of the subjects covered by Article 1 when the IMPOSTITIVE GENERAL DIRECTION in use of its powers determines an omission of more than TEN per cent of the encumbered income for the purposes of the determination of the tax to the aggregate value corresponding to any of the first CINCO (5) closed commercial periods after the granting of the last refund, such subjects shall return to the IMPRECTION .

When such omission is verified in the determination of the tax on the aggregate value of the purchaser, it must enter the IMPOSITIVA General DIRECTION the amount deducted by the tax refund in the purchase, increased in A CIENTO (100 %).

In both cases, the regime governing interests, fines and accessories shall be applied, and Act No. 11.683 (text ordered in 1978 and its amendments) is governed by the Law on the procedure for the application of sanctions and the collection of the corresponding tax credit.

Art. 8o o The tax return received under this regime shall not be computed as taxable in the profit tax. In the case of the purchaser, the amount deducted by the tax return in the purchase shall not constitute the basis for the determination of the amortizable value of the goods or of its acquisition value at the time of the disposal. Art. 9o o Subjects referred to in article 1 may request the return provided for in this decree in the month of delivery, referred to in article 5, of the property or the respective property. No more than one request per month may be submitted.

The termination of the refund shall be carried out by the IMPOSTITIVE GENERAL DIRECTION within the TREINTA (30) days after the date of submission of the application.

Where the persons concerned have tax debts that are required in respect of income tax, assets, or added value, the return may be subject to compensation until the tax obligation in arrears.

Art. 10. MINISTERY OF ECONOMY AND ARTWORKS AND SERVICES PUBLICOS may modify the percentage of refund established in Article 1 in the same proportion as the regime of refunds by export in force at the date of this decree for capital assets. It may also modify the time limit set out in the second paragraph of Article 1. Art. 11. IMPOSITIVE GENERAL DIRECTION shall be the body of application of this regime and is empowered to establish conditions, requirements and formalities for the purposes of this regime. For the purposes of the refunds determined by this decree, the IMPOSTITIVE GENERAL DIRECTION shall take from its daily collection of national taxes the funds necessary to make the respective payments. Art. 12. The provisions of this decree shall govern from the day following the date of publication in the Official Gazette. Art. 13. Note the HONORALBE CONGRESS OF NATION. Art. 14. Contact, post, give to the National Directorate of the Official Register and archvese. . MENEM. . Domingo F. Cavallo.