Decree 1517/98 Bs. As., 24/12/98

VISTO Issue No. 020-002175/98 of the record of the MINISTERY OF ECONOMY AND ARTWS AND PUBLIC SERVICES, and

CONSIDERING:

That through the Draft Law registered under the N. 25.063, sanctioned by the HONORABLE CONGRESS of the NATION on 7 December 1998, a series of reforms are introduced to the national tax system, which imply modifications to the Tax on the Added Value, in the Social Security Resources Regime, in the Tax on the Tax of the Tax on the Personal Property and in the Tax

With regard to the Added Value Tax, it should be borne in mind that the administrative possibilities of efficient control are closely linked to the scope of the levy, which according to its theoretical conception implies a tax regime applicable to all transactions that are carried out throughout the production and distribution cycles, including sales and services made with final consumers, with the only exception of those with a strong social impact.

On the other hand, it should be considered in this regard that the widespread application of the tax also tends to achieve a better balance in its structure, allowing in some cases to defect the cost of the tax on the inputs of the services that are taxed, without affecting the borrowers of the same, for which a tax credit is generated.

At the same time, in order to achieve an equanime effect that compensates for the elimination of certain exemptions, the application of differential rates below that established on a general basis can be admitted, but only with respect to certain goods and services of diffused popular consumption and taking care not to provoke situations that cause distortions at market competition levels.

That in the same way, elementary reasons for fiscal control that make the correct administration of the tax, discourage their discrimination when operations are carried out with subjects that are of the quality of final or exempt consumers or not reached by the tax.

In the same vein, it is not appropriate for certain activities to allow them to be computed as tax credit against their encumbered operations, the tax they have invoiced in their acquisitions for exempt operations, as such circumstances would result in a serious imbalance in the structure of the levy, and could also cause the claim of other sectors of the economy in similar situations.

That under the above, it is considered appropriate to observe in article 1 of Title I of the Draft Law registered under paragraph 25,063, which amends the Law on Taxation, which was ordained in 1997 and its amendments, in subparagraph (d.1), which replaces paragraph 1 (a) of the first paragraph of the Tax Law, the term "In all cases the exemption shall correspond to the first paragraph or half of the paragraph used for dissemination", in paragraph 4.

That in terms of the provisions inherent in the Income Tax, it is not considered prudent to incorporate exemptions that benefit certain State enterprises, since the same could lead to distortions in the levels of competence of their respective activities, nor to establish exceptions in compliance with the requirements required for the reorganization of companies to subtract the expected tax effects, so that it is considered appropriate to observe in Article 4 of Title III.

That in relation to the changes in the treatment of the interests, which led to the creation of the tax on the business indebtedness, it is not considered appropriate to establish in the same maximum topes of taxation, since such circumstances could result in imbalances in relation to the regime applicable to the same concepts in the taxation tax, it is also understood that it is not appropriate to derive in the NACIONAL EXECUTIVE PODER the possibility of handling the transitory tax rate

It is considered appropriate to note in section 5 of Title IV of the Draft Law registered under No. 25.063, which creates the Tax on the Interests Paid and the Financial Cost of the Indebted Business, the expression "-except the provisions of the following paragraph" contained in the first paragraph of Article 5, the second paragraph of the same article and article 11, of the tax.

That in the subject of the Minimum Wage Tax, it is not prudent to establish exemptions in respect of certain activities, especially when the same are of difficult definition and could result in confusing interpretations as to their scope, so it is considered appropriate to observe in article 6 of Title V of the Bill registered under No. 25.063, which creates the Tax on Minimum Wage 3, paragraph 3 of the Tax.

In respect of the Personal Property Tax, it should be borne in mind that the amendments introduced to the Personal Property Tax must preserve the clarity regarding the rules that make the valuation of the computable assets for the determination of the tax and take care not to affect the flow of investments from the outside that have enabled the economic reactivation achieved, and therefore it is considered appropriate to observe in section 7 of the Personal Property Bill registered under the Act No.

That also, with regard to the substantive provisions incorporated into the Gain Tax, referring to the treatment applicable to foreign source incomes obtained by residents in the country, the violation of the principle of legality that would result in retroactive validity of them, leads to the need for their application to have effects for the periods that close after their entry into force or, in their case, fiscal year in progress to that date.

That according to the above, it is considered appropriate to observe in article 12 of Title IX of the Draft Law registered under No. 25.063, which establishes the validity of its provisions, the expression "and from the validity set for the purposes relevant by law 24.073, regarding the provisions of subparagraph (e')", contained in the last part of subparagraph (c) of that article.

That this measure does not alter the spirit or unity of the draft law sanctioned

for the HONORABLE CONGRESS OF NATION.

That the General Directorate of Humanitarian Affairs of the MINISTERY OF ECONOMY AND ARTWS AND SERVICES PUBLICOS has taken the intervention that belongs to him.

That the NATIONAL EXECUTIVE POWER is entitled to dictate the present pursuant to article 80 of the NATIONAL CONSTITUTION.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION IN GENERAL AGREEMENT OF MINISTERS

RIGHT:

Article 1 -In article 1 of Title I of the Bill registered under No. 25.063, amending the Law on Attached Value Tax, which was ordained in 1997 and its amendments, please note:

(a) In subparagraph (d.1), which replaces subparagraph (a) of the first paragraph of Article 7 of the Tax Law, the expression "In all cases the exemption shall correspond whatever the support or means used for dissemination", contained in the first paragraph of the aforementioned rule.

(b) Subparagraph (e.5 bis).

(c) In subparagraph (j), which replaces article 28 of the tax law:

I. Paragraph 4 (a) of the third paragraph of that article.

II. The reference to point 4 of subparagraph (a), contained in subparagraph (b) of the third paragraph of that article.

III. Paragraph 3 (g) of the article.

(d) Subparagraph (k).

(e) Subparagraph (l).

(f) Subparagraph (m).

Art. 2° -In section 4 of Title III of the Bill registered under No. 25.063, which amends the Law on Taxation of Gains, a text ordered in 1997 and its amendments, please note:

(a) Subparagraph (i).

(b) In subparagraph (r), the last of the paragraphs incorporated into article 77 of the law of the taxation.

Art. 3° -In Article 5 of Title IV of the Bill registered under No. 25.063, which creates the Tax on the Interests Paid and the Financial Cost of the Indebted Business, please note:

(a) The term "except the provisions of the following paragraph" contained in the first paragraph of Article 5 and the second paragraph of the same article, of the aforementioned tribute.

(b) Article 11, of the aforementioned tribute.

Art. 4° -In section 6 of Title V of the Bill registered under No. 25.063, which creates the Tax on the Minimum Worship, please note Article 3 (i) of the said tax. Art. 5° -Section 7 of Title VI of the Bill registered under Act No. 25.063, amending Act No. 23.966, Title VI of Personal Property Tax, which was ordained in 1997, observe subparagraphs (f) and (1). Art. 6° -Article 12 of Title IX of the Bill registered under No. 25.063, which establishes the validity of its provisions,

Note the expression "and from the validity set for the purposes of the law 24,073 regarding the provisions of subparagraph (e)" contained in the last part of subparagraph (c) of that article.

Art. 7° -With the salvedades set out in the previous articles, please fill in, promute and tengase by the National Act the Bill registered under No. 25.063. Art. 8° -Note the HONORABLE CONGRESS OF NATION. Art. 9° -Contact, post, give to the National Directorate of the Official Register and archvese. -Jorge A. Rodriguez. -Roque B. Fernández. -Raúl E. Granillo Ocampo. - Guido J. Di Tella. -Jorge M. R. Domínguez. - Antonio E. González. - Alberto J. Mazza. -Susana B. Decibe.