FINANCING OF THE VIVIENDA AND CONSTRUCTION

Decree 873/97

Decree No. 627/96 regulating Title II of Law No. 24,441, establishing the tax treatment to be granted to leasing contracts under the above-mentioned law. Consider certain special situations. General provisions. Winning tax. Contracts for Financial Operations. Added Value Tax. Lease Back operations.

Bs. As., 1/9/97

B.O: 3/9/97

VISTO Decree No. 627 of 18 June 1996 and

CONSIDERING:

That the aforesaid decree regulates Title II of Act No. 24,441, establishing the tax treatment that must be dispensed to the leasing contracts covered by the aforementioned legal standard.

In order to achieve greater precision with respect to the scope of the above-mentioned provisions, it is necessary to supplement these provisions by contemplating certain special situations, which, while included in the legal regime, may have been excluded from the regulations.

That the present is given in the use of the powers conferred by article 99, paragraph 2, of the NATIONAL CONSTITUTION.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1Replace article 1 of Decree No. 627 of 18 June 1996 with the following:

"I - GENERAL PROVISIONS"

"ARTICULO 1o-A for the purposes of its tax treatment, leasing contracts under Law No. 24,441 shall be considered, those that conform to the relevant provisions of Title II and in which the giver is:

(a) A financial entity governed by Act No. 21.526 and its amendments;

(b) a corporation that is intended for such contracts; or

(c) a manufacturer or importer of movable things for the equipment of industries, trades, service companies, agribusinesses or professional activities, which the taker uses exclusively for this purpose.

Art. 2o-Replace Article 2 of Decree No. 627 of 18 June 1996 with the following:

"II - IMPESTO TO GANANCIES"

"Final OPERATIONS SUPPOSED CONTRATS"

"REATMENT 2o-The contracts of leasing referred to in Article 1 of the present decree, celebrated by the damages indicated in its subparagraphs (a) and (b), for the purposes of the Tax on profits will be assimilated for those damages to financial operations, provided that the duration of the contracts is greater than the CINCUENTA per ID (50 %), VEINTE BY CIENTEZ (20 %) or

The FEDERAL ADMINISTRATION OF PUBLIC INCOME, an auto-archic entity within the scope of the MINISTERY OF ECONOMY AND ARTS AND PUBLIC SERVICES, may modify the Table referred to in the preceding paragraph, grouping, disaggregating or incorporating goods or, where appropriate, increasing or decreasing the estimates provided in the same regime, when such adjustments result in the application.

The recovery of the capital applied to such operations shall be determined by dividing the cost or value of acquisition of the object of the contract-decrease in the proportion of the contract contained in the price established to exercise the purchase option-by the number of rental periods fixed in the contract.

The cost to be considered for the purposes set out above shall be determined in accordance with articles 58 and 59 of the Vocabulary Tax Act, which was ordained in 1997 in the case of movable or immovable property, respectively.

The resulting differences between the amount of the canons and the recovery of the capital applied in this article will constitute the gross gain obtained by the giver."

Art. 3o-Replace article 9 of Decree No. 627 of 18 June 1996 with the following:

"III - IMPESTO TO AGREGATE VALUE"

"ARTICULO 9o-The contracts for leasing of movable things referred to in Article 1 or shall be deemed to be covered by the provisions of the Law on Attached Value Tax, text ordained in 1997 and its modification, set out in item 7, subparagraph (e), of its Article 3o and in subparagraph (d), of its Article 5o, except where the object of the contract is durable consumer goods for non-inscript consumer.

In cases where the purchase option provided for in the above-mentioned contracts is exercised, and in situations included in the exception set out in the preceding paragraph "in fine" the provisions of article 2 and 5 (a) of the said legal text shall apply, where appropriate, to the provisions of articles 3 and 4 of the present decree to determine the sale price.

Furthermore, in the contracts of leasing covered by articles 2 or 4 or 5 of the present decree, which are intended to be located with option to buy property, the presumption provided for in article 5 (e) of the aforementioned act of taxation shall not apply.

The situations referred to in the preceding paragraph shall be considered in all cases as location operations, not by reviewing the character of the subjects referred to in article 4 (d) of the tax law, at the time of the purchase option.

When contracts are subject to the provisions of article 7 of this decree, the presumption referred to in article 5 (e) of the tax law shall be deemed to be set up."

Art. 4o-Incorporated as Article 12 bis, the following:

"IV - LEASE BACK OPERATIONS"

"ARTICULO 12 bis-The contracts of leasing entered into by the givers included in article 1 (a) or (b) of this decree, which are for real purposes of their property, acquired for that purpose to those who result the takers of the same, shall be assimilated to financial operations and shall have the following tax treatment.

(a) For the purposes of the Gain Tax, a law in accordance with a text ordained in 1997, the provisions of articles 2 and 3 of this decree shall be applied to the daggers, regardless of the duration of the contract.

For their part, the intakers that affect the good to the production of encumbered profits, will calculate as deduction the amount that arises from subtracting to the sum of the canons plus the price set for the exercise of the purchase option, the value for which the transfer of the property to the giver has been made, in the proportion appropriate to impute to each fiscal period, according to the expiration of the so-called canons and exercise.

In addition, the intakers may choose to impute the profit from the disposal made to the insignor, to the fiscal period in which the same is made or to affect the cost of the well-required in exercise of the purchase option, which is made up of the price actually paid plus the amount corresponding to the difference not deducted from the accrued canons until the time that such option is exercised, in which case the affected new profits may be considered.

In the event that the purchase option is not exercised, such an act will generate for the giver the obligation to compute in the determination of the period of termination of the contract, the income corresponding to the sum of the share of the proceeds in the period of validity of the same considered in a timely manner the recovery of capital and the deduction of the amortizations provided for in article 83 of the tax law.

The situation envisaged in the preceding paragraph will generate for the taker, the obligation to consider in the determination of the tax of the same fiscal period, the deduction of the corresponding difference to the accruals not deducted in due course and the profit from the disposal made to the giver, when it had been opted not to declare it in the fiscal period in which the sale was made.

(b) For the purposes of the Attached Value Tax, law as ordered in 1997 and its amendment, the taxable basis, corresponding to the giver provided for in Article 10 of the Tax Law shall be given by the amount resulting from the difference between the value of the canons and the recovery of the applied capital, determined in accordance with Article 2 of this Decree. In this case, the improvement of the taxable fact set out in item 7 (b) of article 5 of the above-mentioned tax law shall be set at the time of the expiry of the time limit set for the payment of the canon or for its total or partial perception, which is the case before.

For its part, the addition to the tax debit set out in the third paragraph of article 11 of the 1ey of the levy, which would have been made by the taker at the time of the transfer of the property, shall only proceed when the operation has been carried out within the period specified in the legal standard reference, the purchase option contained in the contract is not exercised, in which case the expected settlement shall be carried out in the fiscal period corresponding to its completion".

Art. 5o-The provisions of this decree shall enter into force on the day of its publication in the Official Gazette.

Art. 6o-Contact, post, give to the National Directorate of the Official Register and archívese.-MENEM.-Jorge A. Rodríguez.-Roque B. Fernández.

Annex

TABLA

Life-time estimate of assets

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 DENOMINATION YEARS LIVE UTIL a) Buildings. 50 b) Facilities. 10 (c) Furniture and useful. 10 (d) Machinery and equipment. 10 (e) Tools. 3 (f) Railroads (locomotives and carriages). 10 g) Rods (cars, trucks, trailers, 5 car lifts, cranes, motorcycles). h) Boats 15 i) Recreation Boats. 8 (j) Aircraft in general (planes, jets, 5 helicopters). (k) Containers-includes tank containers and 10 containers containers-for any means of transport. l) Equipment, appliances and instruments of technical use and 8 professional. ll) Equipment, equipment and precision instrument of 5 technical and professional use. m) Computer equipment and accessories of 3 computer. n) Without prejudice to the provisions of the above points, for the following properties of agricultural activity will be considered: I Galpones. 20 II Silos 20 III Molinos. 20 IV Width and tranches. 30 V Water and drinkers. 20 VI Containers, except silos (tonels, drums). 8 VII Tambo Tarros. 5 VIII Reproductive Treasury. 5 IX Tractors. 8 X Harvesters (grains, oleaginous and forages). 10 XI Rotoenfardadoras. 6 XII Motorcycle propelled sprayers. 8 XIII Trailer equipment and machinery (seeders, 8 discs, slab plows, chin plows, scarders, etc.) 

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