GRANTS INCREASE TO PENSIONS AND ESTABLISHES YOUR |! | FINANCING BY MEANS OF MODIFICATIONS TO RULES |! | TAXES Having present that the H. National Congress |! |has given its approval to the following P r o y c t o d e l e y: '' Article 1.- Introduce the following amendments to the Law on Income Tax, contained in article 1 of Decree Law No. 824, 1974: 1.-In point (c) of Article 14º (1) (a), add the following final points, New: " When taxpayers invest in the payment of public limited liability companies, subject to the provisions of this letter, they shall be deemed by act among the living, the enajenante shall be deemed to have made a taxable withdrawal equivalent to the amount invested in the acquisition of the shares, being subject in excess to the general rules of this law. The taxpayer may give credit for the First Category Tax paid in the company from which the investment was made, against the Additional or Additional Global Tax that is applicable on the withdrawal, in accordance with the rules of Articles 56º, number 3), and 63º of this law. Therefore, in this type of operations, the investment and the credit will not become part of the tax profit fund of the society that receives the investment. The same treatment provided for in this paragraph shall have the total or partial returns of capital in respect of the shares in which the investment was made. For the purposes of determining the withdrawal and the corresponding credit, the respective sums shall be adjusted in accordance with the change in the Consumer Price Index on the last day of the month preceding that of the payment of the shares and the last day of the month before the disposal. However, the taxpayers who have completed the above mentioned actions may reinvest the amount collected up to the amount corresponding to the value of the shares, duly adjusted until the last day of the month preceding the of the new investment, in companies obliged to determine their actual income by means of complete accounting, not applying in this case the taxes mentioned in the previous paragraph. The taxpayers will be able to benefit from the rules set out in this letter in respect of new investments. For that purpose, the period of 20 days referred to in the second subparagraph of this point shall be counted from the date of the respective disposal. The taxpayers who make the investments referred to in this letter must inform the receiving company at the time the investment is received, the amount of the contribution corresponding to the taxable profits that they have not paid for Additional or Additional Global Tax and the First Category Tax credit, a requirement without which the investor will not be able to enjoy the treatment provided for in this letter. The company must acknowledge receipt of the investment and the credit associated with it and report this circumstance to the Internal Revenue Service. When the recipient is an anonymous company, the latter must also inform the Service of the disposal of the respective shares. ' 2.-In Article 21: A.-Amend the first subparagraph, as follows: a.-Attaché, then of the words '' natural persons partners '' the phrase '' or additional tax payers who are not natural persons, when in the latter case the Internal Revenue Service determines that the loan is an undercover retirement of profits. B.-Attaché, following the fourth point followed (.) the following sentence: ' In the case of automobiles, station wagons and similar vehicles, the minimum value of the benefit shall be presumed to be 20%. '' c.-Attaché, after the separate point (.), which happens to be followed (.), the following: '' In the case that any good of the company is delivered in guarantee of obligations, direct or indirect, of the partners natural persons or contributors of the additional tax, and it is executed for the full or partial payment of such obligations, will be considered withdrawal in favor of such persons up to the amount of the payment made by the guarantor company. '' B.-In the second and third incissos, replace the expression '' second indent '', which in both cases follows guarism '' 38 '', by '' with the exception of its first paragraph ''. 3.-In Article 31º N ° 2, add the following sentence '' real estate '': '' unless in the latter case its use is not applicable as a credit ''. 4.-Substitute in the sixth indent of the first paragraph of Article 54º, the expression '' second indent '', the second time it appears, by '' with the exception of its 5.-In Article 57º: A.-Derogase the paragraph called ' A. Shares of public limited liability companies. '' B.-Replace the expression ' B. Other investments '', by " A. Of the investments. '' C.-Substitute the letter '' C. '' of the title '' Special Rules for the Taxpayers of Article 42º, No. 1. '', by letter '' B. ''. D.-In the first paragraph, of the current letter B., which became letter A., replace the expression '' the the average rate of tax of the person before making the rebates for credits that the law confers '' for the expression '' a rate of 15% ''. E.-Substitute the first paragraph, from the 5th.-, from the current letter B., which has become letter A., by the following: " 5 °. If the net saving figure for the year is negative, it will be multiplied by a rate of 15%. The resulting amount shall be a debit which shall be deemed to be a Supplementary or Single Second Category Tax of the taxpayer, as appropriate, applying the rules of Article 72 °. In the case where the taxpayer has a positive saving figure for four consecutive years, after that period, the rate referred to, for all subsequent annual turns, shall be applied only on the part exceeding the equivalent of 10 years. Annual Tax Units, according to their value at 31 December of the respective year. F.-In the first indent of the 6th. of the current letter B., which became letter A.: a.-Substitute the expression '' this letter '' by '' this article ''. b.-Suffer the expression '' with the exception of persons whose negative net saving figure of the year does not exceed the 10 Annual Tax Units referred to in the 5th. '', replacing the comma (,) with the antecede, by an end point (.). G.-First of the 10th.-of the current letter B.-, which became letter A.-, and add the following number 10th.-, new: '' 10th.-The investments that are made by the subscription and payment will also be covered by the provisions of this article acquisition of shares of public limited liability companies, which at the date of the investment meet the necessary conditions to be the object of mutual funds investment according to the provisions of article 13º of the decree law No. 1.328, 1976. In respect of these investments, the following special rules shall apply: (a) Only the shares of open anonymous companies which have indicated to the Internal Revenue Service may be covered by this number. to become the recipient institutions for the purposes of this article, which must also inform the Stock Exchanges in which they transact their shares. (b) For the purposes of this Article, the date of the investment shall be deemed to be the date of the registration of the transfer or subscription and the payment of the shares in the shareholders ' register of the company, and as the value of the investment the amount of the purchase or subscription, as appropriate. The investor must manifest when applying for the transfer or the subscription and payment, his intention to receive the investment to the provisions of this article. For its part, it shall be understood as the date of withdrawal or reversal of the investment, in which the respective disposal is recorded. (c) Investments that are made through the acquisition of non-first-issue shares must be made in the country's Stock Exchanges. (d) The disposal shall be carried out on any Stock Exchange of the country, and the price of them shall be the amount of the withdrawal or rotation. '' H.-In the first indent of the first number of the current letter C., which becomes letter B., delete the expression "the first letter A. and the determination of the credit referred to in point B. of '". I.-The second is the number 2. of the current letter C., which has become letter B., passing the current number 3º to be number 2. J.-Substitute in the current number 3º, which happened to be number 2º, of the current letter C., which has passed to be read B. expression '' the letter B. '' for '' this article '' in the two opportunities in which it is used. 6.-Intercalase, in the final article 101st, between the expressions "interests" and "that pay" 'the following: '' or other income' ', and replace the expression '' deposits' 'with '' fetch operations' '. Article 2.-The following amendments to Article 27a of Decree Law No 825, 1974: 1.-The fourth paragraph is replaced by the following: " To obtain the return of the remaining tax credit, the taxpayers who choose This procedure must be submitted to the Internal Revenue Service in order to verify and certify, prior to the return by the General Treasury of the Republic, the correct constitution of this credit. The Internal Revenue Service shall act within 60 days from the date on which it receives the relevant records. If it does not do so at the end of that period, the taxpayer's application shall be deemed to have been approved and the Treasury Department shall to refund the remaining amount of tax credit, within five working days from the date on which the copy of the said application is submitted, duly timbrated by the Internal Revenue Service. 2.-Defeat the fifth indent. 3.-Replace, in the seventh indent, the expression 'fifth' 'by' fourth '. Article 3.-Enter the following amendments to the Tax Code: 1.-In the first paragraph of Article 30, delete the sentence "Likewise, may be sent by registered letter to those offices." 2.- Article 92 (a), the following Article 92 (a): ' Article 92 (a).-The Directorate may provide that the documents which it maintains under its sphere of protection are filed in non-paper media, the reading of which may be carried out by means of systems technology. The Director may also authorise the taxpayer to keep his or her documentation on media other than paper. The paper printing of the documents contained in the aforementioned media will have the probative value of public or private instrument, according to the nature of the original. In the event of the disconformity of the printing of a document with the original or an authentic copy of the document, the latter shall prevail without the need for another collation. " 3.-In Article 97º: A.-Add the following paragraph in The number 1: '' In case of delay or omission in the submission of reports referring to operations carried out or antecedents related to third persons, the fines referred to in the previous paragraph shall apply. However, if required subsequently under warning by the Service, the taxpayer does not comply with these legal obligations within 30 days, will also be applied, a fine that will be up to 0.2 Monthly Tax Units for each month or fraction of the month of delay and for each person who has been omitted, or for which the respective submission has been delayed. However, the maximum fine to be applied may not exceed 30 Annual Tax Units, whether the infringer is a taxpayer or a State Administration Agency. '' B.-Add the following number 20.: '' 20.- The deduction as expense or use of the tax credit that is made, in a repeated manner, the taxpayers of the tax of First Category of the Law of the Income, other than public limited companies, of disbursements that are rejected or that do not give the right to such credit, according to the Law of Income or Decree Law No. 825 of 1974, by the fact of giving in personal and free benefit of the owner or partner of the company, his or her spouse or children, or of a third person who does not have a working or service relationship with the company that justifies the disbursement or use of the tax credit, with a fine of up to 200% of all taxes that should have been learned in tax coffers, not to mediate the undue deduction. '' 4.-In the article 165th: A.-In the first paragraph of the first paragraph, replace by commas (,) the conjunction '' and '' between the numerals '' 11 '' and '' 17 '' and the conjunction '' y '' that exists between numerals '' 17 '' and '' 19 ''; and delete the comma (,) after numeral 19, adding the expression '' and 20 ''. B.-In the number 1., after the guitarianism '' 1, '', add the expression '' first paragraph, ''. C.-In the number 2: a.-Intercalase between the word "numbers" and the numeral "6 '', the phrase" 1, incisos second and final, "; b.-replace by comma (,) the conjunction '' y '' that exists between the numerals '' 10 '' and '' 17 ''; c.- '' y '' that exists between the numerals '' 17 '' and '' 19 '', and d.-Delete the comma (,) that exists after the numeral '' 19 '', adding the expression '' and 20 ''. D.-Add the following number 9.-, new: '' 9.-The interposition of claim against the liquidation of the taxes originated in the infraccional facts sanctioned in the Nº20 of the article 97º, will suspend the resolution of the claim that has been deducted against the notification of the said infringement, until the final judgment which fails the claim against the liquidation is executed. '' 5.-Add in the first paragraph of Article 185º, following the point final (.), which is replaced by a comma (,), the following sentence: '' having as the only value This is the result of multiplying by 1.3 times the tax guarantee that is in force for the purposes of the real estate contribution. '' Article 4.-In the first edition of the single article of Law No. 18.320, replace the term "two months" by the phrase "stated in article 63º of the Tax Code,". Article 5.-Substitute, in the first paragraph of Article 13 of Law No. 18,768, the expression "is certified by the National Customs Service." "by the phrase" the Internal Revenue Service is verified. " Article 6.-Amend the 16th of article 24º of Decree Law No. 3,475, of 1980, as follows: 1.-Intercalase, following the expressions '' of money '', the following sentence: '' by Banks and Financial Institutions, '', preceded by a comma (,). 2.-Get the words that follow the word "countries", from the first time it appears to the point followed (.). Article 7.-Modify the plants of the staff of the Internal Revenue Service, established by Article 14º of Law No. 19,041, modified by the laws Nºs. 19.224 and 19.226, the text of which was recast and updated by decree Supreme Nº 1.368, of the Ministry of Finance, 1993, as follows: 1.-At the Professional Plant, create the following posts: Ten professionals grade 5 Four professionals grade 6 Three professionals grade 7 Two professionals grade 8 The charges that are created in this number may be exercised, interchangeably, by Civil Engineers or Execution Engineers in the area of Informatics. 2.-At the Fiscaliser Plant, create the following charges: Twenty fiscalizers grade 10 Twenty fiscalizers grade 11 Twenty fiscalizers grade 12 Twenty-four fiscalizers grade 13 Nineteen fiscalizers grade 14 Eight fiscalizers grade 15 3.-To count from January 1, 1999, in the Plants indicated, create the following positions: A.-Professional Plant: Three professionals grade 5 Two professionals grade 6 Three Professionals grade 7 Two professionals grade 8 B.-Fiscaliser plant: Five fiscalizers Five fiscalizers grade 11 Five fiscalizers grade 12 4.-To count from January 1, 2000, in the Plants indicated, create the following positions: A.-Plant of Professionals: Two professionals grade 5 Three professionals grade 6 Two professionals grade 7 Three professionals grade 8 B.-Fiscalizers plant: Five fiscalizers grade 10 Five fiscalizers grade 11 Five fiscalizers grade 12 The degrees of Professionals that are created in the numerals 3 and 4 of this Article, may be exercised, interchangeably, by Lawyers, Civil Engineers, Engineers Commercial or Engineers in Execution in the area of Informatics. Article 8.-Increase the maximum staff of the Internal Revenue Service set in law No. 19,540, on Public Sector Budgets for the year 1998, to 2,809 officials. Article 9 °.-Increase, to count from the first day of the month following that indicated in the first transitory article of this law, in $8,000 the amount of the care pension of decree law No. 869, of 1975. Care pensions granted prior to the date indicated in the preceding paragraph, the amount of which is lower than that of the care pension resulting from the application of the said paragraph, shall be raised to that value at the date of the date of the indicated. Article 10.-Increase, from 1 January 1999, by $8,000 the amount of the minimum pensions referred to in the first and second points of Article 26 and the old age and invalidity pensions of Article 27, both of which are law No 15.386, including those that correspond to pensioners who are 70 or more years of age, referred to in Decree Law No. 3.360 of 1980, and those of old age and invalidity of Article 39 of Law No. 10,662. Article 11.-Increase, as from 1 January 1999, the amount of the minimum survival pensions referred to in Article 26 of Law No 15.386, those of Article 24 of that law having the character of minimum and those of Article 79 of Decree Law No. 3,500 of 1980, including those that correspond to pensioners who are 70 or more years of age, referred to in Decree Law No. 3.360, of 1980, and those of the survival of Article 39 of Law No 10,662, in the following amounts: (a) Widowhood without children entitled to orphan's pension, $8,000. b) Widowhood with children entitled to an orphan's pension, $6,800. (c) Mother of natural children of the deceased without children entitled to an orphan's pension, $4,800. (d) Mother of natural children of the deceased with children entitled to orphan's pension, $4,080. e) Of widow and invalid father, $6,800. (f) Orphanage, $1,200. However, the increase that corresponds to the partial invalid widower referred to in points (a) and (b) of the aforementioned Article 79 of Decree Law No. 3,500, will be the one that results from the increase of the minimum pension of old age and invalidity, the respective percentages mentioned in the letters mentioned. The holders of widowhood and mother's pensions of the natural children of the deceased who, as of December 31, 1998, are receiving some of the bonuses established in the laws Nºs. 19,403 and 19,539, will be entitled to count of the 1st of January 1999, that your pension is increased in the amount that as indicated in the first paragraph of this article corresponds. The pensions of widowhood and the mother of the natural son the deceased, whose amounts at 31 December 1998 are higher than the amount of the respective minimum pensions plus the allowances of the laws Nºs. 19,403 and 19,539, which correspond, but lower than those, increased in accordance with the First of this article and with the bonuses of the aforementioned laws, which correspond, will be increased, to count from January 1, 1999, in the amount necessary to reach this last amount. The above, provided that your beneficiaries meet the requirements for minimum pension. Article 12.-Increase, as from 1 October 1999, in $8,000 the old-age, invalidity and other retirement or retirement pensions, as referred to in Article 14 of Decree Law No 2,448 and Article 2 of Decree Law No 2,547, both of which 1979, excluding minimum pensions of Law No. 15.386 and those of Article 39 of Law No. 10,662. The increase in the survivor's pensions covered by the provisions referred to in the preceding subparagraph, excluding those increased in accordance with the provisions of the preceding Article, shall be as follows: (a) No children entitled to orphan's pension, $8,000. b) Widowhood with children entitled to an orphan's pension, $6,800. c) Of mothers of natural children of the deceased without children entitled to an orphan's pension, $4,800. d) Of mothers of natural children of the deceased with children entitled to an orphan's pension, $4,080. e) Of widow and invalid father, $6,800. f) Orphanage, $1,200. g) Other survivors, $1,200. Article 13.-Pension holders governed by the rules mentioned in the previous article, excluding widowhood and mother's pensions of the natural children of the deceased, whose benefits as of December 31 1998 shall not be of a minimum character, but which, pursuant to Articles 10 and 11 of this Law, shall be equal to the amount of the respective minimum pension, shall be entitled to the increase of the corresponding Article 12, as from 1 October 1999, replacement of the one they are perceiving. This increase will apply to the amount of the pension in force as at 31 December 1998, adjusted to 30 September 1999 in accordance with the relevant legal provisions. The holders of the pensions referred to in Article 11 (4) of this Law shall be entitled, as from 1 October 1999, to the respective increases referred to in the previous Article, replacing the one in which they are perceiving. This increase will apply to the amount of the pension in force as at 31 December 1998, adjusted to 30 September 1999 in accordance with the relevant legal provisions. In the case of survivors ' pensions governed by the rules referred to in the previous Article, which arose after 1 January 1999 and before 1 October 1999, which since their beginning have been the character of the minimum, In the case of pensioners, who received benefits of higher amounts than the current minimum, they would have to be reliqued. For this purpose, the corresponding increase, as provided for in Article 12 of this Law, shall apply to the amount of the initial calculation pension, adjusted to 30 September 1999 in accordance with the relevant legal provisions. The amount thus determined may not be less than the sum of the respective minimum pension and the allowances of the laws Nºs. 19,403 and 19,539. Article 14.-Those who hold more than one pension of any pension or welfare scheme, including those of accidents at work and occupational diseases, shall be entitled to receive only a single increase of those laid down in the present law. Such an increase in respect of the lower value pension to be increased shall be the responsibility. However, if one of the pensions has the character of the minimum, it will only be for the latter to increase. Article 15.-In respect of the pensions referred to in Article 2 of Decree Law No 2,547 of 1979, in order to grant the increases laid down in the preceding articles, the rules of Law No 18,694, and the provisions of the Article 83 of Law No. 18,948 and in Article 66 of Law No. 18,961. Article 16.-The greatest expense that irrogue during the year 1998, the application of articles 7 and 8 of this law, will be financed by reallocations of the current budget of the Internal Revenue Service and, in what will be missing, with the item 50-01-03-25-33.104 from the Public Treasury of the Nation's Budget. Article 17.-The highest tax expense that demands during the |! |this year the application of article 9 of this law, |! |increase the sum of the net value of the amounts to which is |! |refers to the first paragraph of article 4 of the Law No. |! | 19,540, Law of public sector budgets for 1998. |! This increase in the net value referred to, will be financed |! |with the highest income coming from the |! |tax collection by application of the provisions in the |! |first transitory article of this law. Article 18.-The provisions of article 1 of the |! |present law and in the letters D.-and following of No. 5, |! |shall be governed by the 1999 Tax Year. Also, the first indent added by Nº 1.-|! |of the article mentioned, will govern with respect to investments |! |in actions that are carried out to count from May 1, 1998. REPEALED PARAGRAPH |! | |! | The modifications that are made to the article 57º |! |bis, letter B.-, by the letter D.-and the following of the Nº 5.-|! |of the article 1.-of this law, shall govern to count of the |! |day 1 of the month following that of the date of publication of |! |this law. However, the modified rules will continue |! |in effect with respect to the savings balances that the |! |contributors keep to the date of entry into force of |! |the modifications. These must determine the rate to which |! |refers to the No. 5.-of the letter B.-of the referred article |! | 57a, before its modification, to December 31 of |! | 1998, considering the balance of savings that they have to that |! |date, and to inform that rate to the Tax Service |! | Internal in the form and time period that this indicates. The rate referred to in the preceding paragraph shall be the |! |to be applied in the exercises in which a |! |negative net saving figure is produced in relation to that balance |! |net savings, considering for this purpose, |! exclusively, the Orders that are made from the |! |instruments and deposits made prior to the |! |date of validity of the modification, without adding the |! |investments made to count of the validity of this. Article 19.-Add to Article 2 of the Law No. |! | 17.235, on Territorial Tax the following paragraph |! |final, new: '' All good non-agricultural root whose original destination is |! |the room, which has been subsequently destined in |! |form partial to a use other than this one, whose avaluo is |! |equal to or less than the amount of the general exemption |! |housing and that is inhabited by its owner, |! |natural person, will enjoy a 100% exemption of the |! | Territorial Tax. '' Article 20.-Without prejudice to the provisions of Article 55 of Law No 16,744, to count from the date of publication of this law, the Mutualities of Employers governed by the aforementioned legal body, will finance the extraordinary improvements of (a) pensions granted in this law and the extraordinary pecuniary benefits to be established for the future by law for their pensioners under the social security they administer, in accordance with the procedure and allocation of resources available in the the following items. Notwithstanding the foregoing, this procedure shall also apply and the allocation of resources to the extraordinary benefits granted by Articles 2, 3, 5, 7, 8, 10 and 13 of Law No. 19.539 and 6 of Law No. 19.564, shall also apply. count from 1 January 1998. Article 21.-Without prejudice to the provisions of the |! |articles 19 and 20 of Law No 16,744, the Mutualities |! |of Employers of the said law, shall form and |! |maintain a Contingency Fund and, in addition, must |! composition of assets |! |representative of the pension reserve provided in |! |the article 20 quoted, according to the following rules and the |! |instructions that to the effect the Superintendence of the Superintendence |! |of Social Security: A.-Fund of Contingency 1. From 1st October 1998, every |! | Mutuality should constitute a Contingency Fund, |! |that will be destined to solve improvements |! |extraordinary pensions and pecuniary benefits |! |extraordinary for pensioners. The Mutuality |! |respective will have to allocate the following resources to |! |the formation and maintenance of this fund: a) The monthly income per concept of the |! |extraordinary quote provided in the sixth article |! |transitory of this law; b) sum equivalent to the positive difference, if the |! |were, between the GPE and the annual GAP, as defined in |! |article 22 of this law, and c) The amount equivalent to 0.25% of the monthly IC |! |defined in article 22 of this law. The obligation of the Mutual Fund to allocate resources to the Contingency Fund, shall remain until it completes the sum equivalent to the Current Value of the Obligations for Extraordinary Increases Granted to Pension and pecuniary Benefits extraordinary granted to pensioners, an obligation that will be restored each time the Fund represents a lower amount than the one indicated. In any case, the above limit cannot be lower than the Contingency Fund's Value at 31 December of the previous year. The present value of these obligations must be determined and revised, at least once a year by the Social Security Superintendence. 2. The Fund's representative assets |! | Contingency, must be exclusively constituted by |! |the financial instruments mentioned in (a), |! |b), (c), (d), (e) and (k) of Article 45 of the decree law Nº |! | 3,500, 1980, according to the instructions provided |! |al Social Security Superintendence 3. Each Mutuality will only be able to turn resources with charge |! |the Contingency Fund for the following purposes: a) Pay extraordinary pension improvements and |! |extraordinary pecuniary benefits for the |! |pensioners, and b) Financing the representative assets formation |! |of increases in the pension reserve referred to |! |article 20 of the law N ° 16,744, originating in the |! |obligation to increase such reservation as a consequence of |! |extraordinary improvements awarded to their pensioners |! |during the year. B.-Composition of Representative Assets 1. Each Mutuality must allocate the following |! |resources for the acquisition of assets of the above |! |in the number 2 of the letter A of this article, |! |representative of the pension reserve to which it refers |! |article 20 of the law N ° 16.744: a) The resources defined in the 1 letter A |! |of this article, each time the Contingency Fund |! |has reached its maximum amount, and b) The transfer of assets representative of the Fund of |! | Contingency in the case foreseen in the number |! | 3 (b) of the preceding letter. The obligation of each Mutuality to allocate resources |! |to the acquisition of these assets, subsist until |! |complete a sum equivalent to 100% of the amount of the |! |pension reserve at December 31 of the previous year, |! |obligation which is reset each time the assets |! |cited represent a percentage lower than the indicated. 2. Each Mutuality may only liquidate the assets |! |representative referred to in the previous number in the |! |measure that they exceed 100% of the amount of the pension reserve at December 31 of the previous year. The |! |resource settlement can only be reached up to the sum that |! |result from subtracting the total amount paid for |! |pensions for the Mutual during the respective year, the |! |total amount paid for the same concept during the year |! | 1997, and multiply the result by the relationship that |! |represent, at the end of the year, the sum of the assets |! |representative of the pension reserve invested in |! |the financial instruments referred to in the number 1 |! total amount of such reservation. In the case of Mutualities that have not paid |! |pensions during 1997, to carry out the estimated calculation |! |in the previous paragraph, the value of the said |! |pensions will be replaced by the figure that results from applying to the amount |! |total paid by concept In the year for this |! | Mutuality, the average of the relationships that represents the |! |amount paid in pensions in 1997, with respect to their |! |respective total pension payment of the year. 3. Any increase in the pension reserve that is |! |origine in extraordinary increments of pensions |! |established by law, must be represented in assets of |! |those mentioned in the number 2 of the letter A of this |! |article. 4. The Superintendence of Social Security will regulate the |! |way to provide a provisional and monthly form of the sum |! |that corresponds to the resources of the letter b) |! |of the number 1 of the letter A of this article, destined to |! |the formation of the Contingency Fund and to adjust them |! |annually. Also, it will regulate how to determine |! |monthly the amounts of the pension reserve that the |! | Mutualities will have to invest in the indicated instruments |! |in the number 2 of the letter A of this article. Article 22.-For the purposes of the |! |article 20 of this law, establish the following rules |! |and calculation procedures: A.-Base Numbers Each Mutuality shall determine the following |! |base numbers, subject to approval of the |! | Superintendence of Social Security: 1.-Base Pension Expenditure (GPB) The GPB, in the case of the existing Mutualities to the |! | December 31, 1997, will be the amount equivalent to the |! |total sum of the following items: (a) The sum equivalent to the actual pension expenditure |! |and other financial benefits attached to them, paid to |! |their pensioners during the year 1997; (b) The sum of representative capital reserves |! |for pensions constituted during the year 1997, and c) The sum corresponding to the increase in pensions |! |originated by the payment in the month of December 1997 of the |! |extraordinary pension readjustment established by law |! | No. 19,539, and the respective increase of the reserves of |! |pensions, if not included in (a) and (b) |! |precedents. In the case of the Mutualities constituted with |! |after December 31, 1997, the GPB of each |! |one of them will be the amount that will result from applying to their |! | Revenue by Quotations, corresponding to the first year |! |of operation, the average of the percentages it represents |! |the GPB of each existing mutuality to December 31 of |! | 1997 with respect to its corresponding Income of Quote |! | Base (BCI). 2.-Income from Base Quote (BCI) The BCI, in the case of the existing Mutualities to the |! | December 31, 1997, will be the amount equivalent to the |! |total sum of the following items: a) The sum equivalent to the total of quotations |! |basic and (b) The sum total equivalent to the adjustments, |! |interest and fines entered in the financial statements |! |of the year 1997. For the purposes of points (a) and (b) |! |above, they must be added to the quotes |! |registered in the financial statements of that year, |! |those corresponding to the remuneration of the month of |! |December 1996, which were due Learn in January 1997. In the case of the Mutualities constituted with |! |after December 31, 1997, the BCI of each |! |one of them will be the amount that will result from deflecting your |! | Income by Quotations, corresponding to the first year of |! |operation, by the percentage variation of the index of |! |consumer prices and by the percentage increase of the |! |number of contributors of the total of Mutualities, both of the |! |first year, in the form that will establish the Superintendence |! |of Social Security. B.-Annual Reference Parameters Within the month of March each year, each Mutuality |! |must determine the following annual parameters of |! |reference from the previous year, subject to the |! |approval of the Security Superintendence Social: 1.-Pension adjusted expenditure (GAP) The GAP will be the amount equal to the total sum of |! |the following items: (a) The sum equivalent to the actual pension expenditure |! |and other financial benefits attached to them paid to their |! |pensioners during the year, and (b) The sum of representative capital reserves |! |for pensions constituted during the year, in how much does not |! |exceed 20% of total capital reserves |! |representative for existing pensions at 31 of |! |December of the previous year. 2.-Income for Quotations (IC) The CI will be the amount equal to the total sum |! |of the following items recorded in the states |! |financial corresponding: a) The sum equivalent to total quotes |! |basic and additional, and b) The total sum equivalent to the realignments, interest and |! |fines. 3.-Expenditure on Equivalent Pensions (GPE) The GPE corresponding to 1998 that will be calculated in |! |March 1999, will be the amount resulting from applying to the |! | GPB the percentage that represents the CI of 1998 with respect to |! |of the BCI. The GPE, in other cases, will be the largest amount |! |between: a) The sum resulting from applying to the GPE of the year |! |previous the percentage that represents the CI of the year |! |corresponding with respect to the CI of the previous year, and b) The amount of the GPE of the year preceding, increased |! |by percentage of price index variation to |! |exercise consumer and percentage representing |! |total number of pensioners at 31 December of the year |! |with respect to total number of pensioners existing to equal |! |date of the previous year. 4.-Expenditure Guaranteed by Mutuality (GGM) The GGM will be the sum of the GPE plus 2% of the CI, plus the |! |income recorded in its financial statements by the |! | Mutuality during the respective year by concept of the |! |extraordinary quote established in the sixth article |! |transitory of this law. C.-State contribution To be counted from 1 January 1998, if as a result |! |of extraordinary pension or |! improvements, with extraordinary pecuniary benefits to |! |the pensioners of law No 16,744, the GAP of a |! | Mutuality exceeds the GGM of the same, the State will contribute |! |to that Mutuality with 50% of the difference. The contribution to be made by the State by |! |application of the above paragraph, will be expressed in Units |! | Monthly Tax in force in December of the year |! |respective. It will be paid no later than March 31 of the year |! |next to the one in which it originates, previous report of the |! | Superintendence of Social Security. To this effect, each Mutuality must provide |! |to that Superintendence the background of the calculation and the |! |results regarding the Base Numbers and Parameters |! | Reference Annals that allow to determine the |! |contribution of the State, in the form that the |! | Superintendence determines. The information indicated, must |! |be presented within the first ten days of the month of |! |March of each year. All in all, if the Social Security Superintendence |! |will object to the financial statements of the Mutuality or the |! |determination of the annual parameters or other elements |! |that have served for the lime The contribution of the |! | State, this contribution will be paid within the month |! |next to the one in which the |! |objections, to the satisfaction of the Superintendence of |! | Social Security. D.-Determination of Figures Figures relating to the calculation of the base numbers and |! |the reference annual parameters, as referred to |! |the letters A and B of this article, will be determined and |! |update, as the case may be, according to the |! |instructions that give the effect of the Superintendence of |! | Social Security. E.-Sanctions The malicious background of calculation or |! |financial statements of a Mutuality, containing |! |false or erroneous information leading to the determination of |! |contributions from the State of the referred to in the letters C |! |and D Above the above, |! |it will be sanctioned with a penalty to the respective Mutuality of |! |up to 200% of the amount of the undue difference. They will be |! |severally liable for the fine the directors and the |! |general manager of the Mutuality, unless they prove their no |! |participation or their opposition to the fact that generated the fine. The provisions of Articles 58 and 60 of the Law No. |! | 16.395, Organic of the Superintendence of Security |! | Social, will govern with respect to the sanctions that it applies |! |in accordance with the previous paragraph. TRANSITIONAL ARTICLES Article 1.-The taxpayers referred to in Article 84th (a) of the Law on Income Tax, to whom the derogation provided for in the third transitional article of this law is affected, shall begin with make provisional monthly payments in respect of this derogation, for the gross receipts received or due to be counted on the first day of the month following the publication of this law in the Official Journal. For these purposes, those taxpayers shall recalculate the percentage in the terms laid down in the second and third subparagraphs of Article 84th (a), without deducting the credit for the territorial contribution of the first tax the category to be paid for the relevant business year. Article 2.-Notwithstanding the provisions of Article 17, No. 8, of the Law on Income Tax, any taxpayer is or is not habitual according to the provisions of article 18 of the Law, which during the years 1999 to 2002, both In addition, it obtains a higher value in the disposal, carried out on a Stock Exchange of the country, of shares issued by public limited companies with stock exchange, at the time of the acquisition and that has been carried out on a stock exchange Country values, where they are not first issued, may choose to declare and pay, for that higher value, the The only tax established in the third indent of Article 17, No. 8, or the Complementary Global Tax, of the Law on Income Tax. For these purposes, it is understood that they have stock market shares that at the date of their acquisition comply with the necessary conditions to be the object of mutual funds investment, according to the provisions of the Article No. 1 13th of Decree Law No. 1,328, of 1976. The option referred to shall be for each full year and shall apply to all operations carried out by the taxpayer during that year. The taxpayer may change the tax regime, alternatively, on an annual basis. However, taxpayers will not be able to accept this option as the greatest value originating in the disposal of shares to related persons, referred to in Article 17, number 8, nor the higher value obtained in the disposal of shares. Article 57a, both of the Law on Income Tax, is accepted. Article 3.-The taxpayers referred to in point (d) and in the second subparagraph of point (f) of the first paragraph of Article 20 and in Article 39º, number 3.-of the Law on Income Tax, during the tax years 1999 to 2002, both They may not deduct from the first class tax payable in those years the territorial contribution referred to in those provisions. Notwithstanding the foregoing, the taxpayers referred to in point (d) of Article 20 (1) and Article 39º (3) of the law referred to above may continue to deduct from their first class tax the territorial contribution paid for buildings which are intended for rent only, provided that it does not give up for the benefit of a related person and that the annual rent income is equal to or greater than 11% of the tax guarantee at the end of the financial year. Related to these effects shall be understood to the persons referred to in Article 100º of Law No 18,045. Taxpayers who, by application of the foregoing paragraph, cannot discount the payment of the territorial contribution of the first class tax, in respect of a property transferred to a lease or use to a related natural person, may In this case, it is not possible for the company to be included in the income tax. To make use of this benefit, it will be necessary for that natural person to occupy the root good as a permanent room, for himself or his family, at the time of publication of this law. In this case, the provisions of Article 64 of the Tax Code and the provisions of Articles 1,888 et seq. of the Civil Code shall not apply. Article 4-During the tax years 1999 to 2002, both inclusive, the excess credit that is produced by the application of the provisions of Article 333a of the Law on Income Tax, may be deducted from the tax of the first category of the following exercises. If, at the end of that period, a surplus persists, the surplus may be deducted from the tax referred to in the subsequent financial years, up to its total extinction, following the credit provided for in Article 33a origine in the respective exercise. For this purpose the credit surplus shall be adjusted in accordance with the change in the Consumer Price Index, which occurred between the last day of the month preceding the end of the year in which the surplus occurs and the last day of the month before the end of the financial year in which it is to be deducted. Article 5.-During the tax years 1999 to 2002, both inclusive, the contributors of the Complementary Global Tax may deduct from the base of that tax 50% of the dividends and interest that meet the following conditions: a) Dividends must come from shares of open-ended public limited companies that are traded on some of the country's Stock Exchange. (b) Interest shall come from deposits of any kind, in national or foreign currency, made in national banks and financial institutions. The discount provided for in this article may not exceed in each tax year the sum equivalent to twelve and a half annual Tax Units, according to their value at the end of the financial year. The interests of instruments under the rules of Article 57º of the Law on Income Tax shall not benefit from the provisions of this Article. Article 6.-Set up, to count from the 1st of |! |September 1998 and until 31 March of the year |! | 2017, an extraordinary quote of 0.05% of |! |taxable remuneration, of employer's charge, |! |in favour of social insurance against accident hazards |! |work and occupational diseases of the law N ° |! | 16,744. The companies that have the quality of |! |managers delegated of the insurance, will find out |! |the mentioned quote, in its entirety, in the Institute |! |of Normative Normalization, in conjunction with the |! |contributions to be realized in this in accordance with the |! legislation in force. Article 7-The increases in the pension reserve provided for in Article 20 of Law No 16,744, which the Mutualities are required to carry out for the extraordinary increases in pensions determined by this law and which must be paid from October 1999, shall be set up in January 2000. ' And because I have had to approve and sanction it; therefore, promulgate and take effect as the Law of the Republic. Santiago, 28 July 1998.-EDUARDO FREI RUIZ-TAGLE, President of the Republic.-Eduardo Aninat Ureta, Minister of Finance.-Jorge Arrate Mac Niven, Minister of Labour and Social Welfare. What I transcribe to you for your knowledge.-Salute to you. Manuel Marfan Lewis, Undersecretary of Finance