Law No.. 20.097 Introduces Modifications To The Article 2Nd Of The Law Nº 20.026, Which Establishes A Tax Specific To The Income Of The Mining Activity And Adds A New Article Transitional


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"(Artículo único.-Modifíca_se la ley Nº 20.026, de la siguiente forma: 1) Agreganse in article 2 transitional, paragraphs following second, third and fourth:"in cases in which participate in the capital of a company operating mining recipient of foreign investment, partners who benefit from invariability rights contained in articles 7 or 11 bis, paragraphs 1 and 2 " , of Decree Law No. 600, 1974, and other partners, national or foreign, that they do not benefit from any of these rights or that, having renounced the tax invariability established in article 7 warranty and, in consequence, to the warranty set forth in article 11 bis No. 1, enjoy only the invariability of rules of paragraph 2 of article 11 bis partners benefiting from the tax invariability benefit are entitled to a credit against the additional tax established in article 60 of the law on income tax by the specific tax on mining activities paid by the receiving company of its investment. This credit will be equal to the proportion participation having the respective foreign investor profit from the mining company to represent in the total of the tax established in article 64 bis of the designated law, earned by the company in the same period that corresponds to the affected to the respective additional tax revenue. To this effect, such a tax must reset according to the variation of the price index the consumer between the month prior to that established in article 64 specific tax would have earned in that bis of the same Act and the month preceding that in which should be attributed as a credit against the additional tax that affects the foreign investor. The undertaking shall calculate and record the credit referred to in this article in accordance with instructions to be issued by the internal revenue service.
Will be deducted to credit established in the preceding paragraph, the amount resulting from applying the rate of the tax for first category that corresponds on the amount of the tax of article 64 bis of the aforementioned Act on tax income is deducted as an expense in determining the taxable liquid income of the first category tax in proportion to the respective foreign investor participation have on the profits of the mining company.
Product of the allocation established in the preceding subparagraphs is a surplus in favour of the foreign investor, this will return as interim payment as provided in the Act on tax on income, as appropriate. "."

(2) add the following article 8 ° transitional: "article 8 transitional.-those foreign investors who have embraced article 3 transitional preceding provisions and are holders of the rights granted by the paragraph 2 of article 11 bis of Decree Law No. 600, 1974, in relation to the treatment of accelerated asset depreciation, and those investors who maintain current foreign investment contracts under which to enjoy that right" (, they shall benefit from the provisions of article transitional 3rd of this law, under the same conditions and for the period laid down in Nº 3 of that article, with the following modifications: 1) may deduct from the operational taxable income established in article 64 bis of the law on tax on income, interest paid or accrued on amounts owed , within the year covered by such a tax;
(2) may be deducted from the operational taxable income interest paid or owed to entities or people related to the mining operator in that part which, in accordance with the provisions of paragraph 1 of article 59 of the law on income tax, should be considered excess indebtedness;
((3) receiving the investment enterprise and foreign investors must renounce expressly and irrevocably the rights referred to in paragraph 2 of article 3 transitional preceding, and 4) the request to the foreign investment Committee expressing the will avail himself of the rules of the present article and the waiver referred to in the previous number must be submitted at the latest on 30 June of 2006. ".".