By Establishing Rules On Tax Rationalization Are Issued And Other Provisions

Original Language Title: Por la cual se expiden normas sobre racionalización tributaria y se dictan otras disposiciones

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223 OF 1995

(December 20)

Official Journal No. 42.160, 22 December 1995

For which rules on tax rationalization are issued and other provisions are dictated

Vigency Notes Summary

THE CONGRESS OF COLOMBIA,

DECRETA:

CHAPTER I.

SALES TAX

ARTICLE 1o. Article 420-1 of the Tax Statute will be as follows:

" ARTICLE 420-1. COLLECTION AND CONTROL OF SALES TAX ON THE DISPOSAL OF AIRCRAFTS. In the sales of aircrafts that have the character of fixed assets, the payment of the sales tax shall be credited to the Civil Aviation Special Administrative Unit, at the time of registration of the operation.

For the purposes of the control of sales tax, the Civil Aeronautics will have to report within the fifteen (15) first days of each month to the fiscal sub-direction of the National Customs and Tax Directorate, the registered in the previous month, identifying the names and names or social and NIT names of the contracting parties, as well as the amount of the transaction, the value of the sales tax generated and the identification of the object of the itself ".

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ARTICLE 2o. Add article 424 of the Tax Statute with the following tariff items:

" ARTICLE 424. GOODS THAT DO NOT CAUSE THE TAX:

1502 The fat of animals of the bovine, ovine or caprine species, raw (sebum in branch).

40.11.91.00.00 Tyres for agricultural tractors or implements.

44,07.10.10.00 Tablillas for the manufacture of pencils.

44,08.10.10.00 Tablillas for the manufacture of pencils.

73.10.29.10.00 Deposits of cast iron, iron or steel, of capacity

less than or equal to 3001, no devices for transport

of milk.

73.10.29.90.10 Receipts for semen packed transport, used

in artificial insemination.

73.12.90.10.00 Aluminium deposits of less than or equal to 3001,

without devices, for the transport of milk.

84,32,40.00 Fertilizers and fertilizer distributors.

85.10.20.20 Skylar machines.

87.13 Wheelchairs and other vehicles for the disabled,

even with motor or other propulsion mechanism.

87.13.10.00.00 No propulsion mechanism

87.13.90.00.00 Others.

87.14 Parts and accessories of vehicles of heading 87.13.

87.14.20.00.00 Wheelchairs and other vehicles for the disabled.

90.01.30.00.00 Contact Lentes.

90.01,40,00.00 Glass sheets for glasses.

90.01,500.00 Lents of other materials for glasses.

921 Orthopedics articles and appliances, prostheses, including the

girdles and medical-surgical bands and crutches, tablets,

splints and other articles and apparatus for fractures;

articles and appliances of prostheses; hearing aids and other appliances

appliances that the person is carrying, or are implanted for

compensate for a defect or an inability.

96.09.20.00.00 Mines for pencils.

96.17.01.00.00 Termos for the transport of semen of cattle.

Tariff positions 25.05,25.24 and dichlorodiphenyltrichloroethane are removed from position 29.03. Consequently, such goods are taxed at the general rate. "

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ARTICLE 3o. Add article 424-3 of the Tax Statute with the following tariff item:

87.01.10.00.00 Motorists ".

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ARTICLE 4o. Article 424-5 of the Tax Statute will remain as follows:

" ARTICLE 424-5. GOODS EXCLUDED FROM THE TAX. The following goods are excluded from the sales tax:

1. Pencils of writing and coloring.

2. Creolina.

3. Brooms, trappers and brushes for domestic use, excluding industrial ones.

4. National or imported equipment and elements intended for the construction, installation, assembly and operation of control and monitoring systems, necessary for compliance with the existing environmental regulations, regulations and standards, for which this condition must be credited to the Ministry of the Environment.

5. Matches or matches.

6. Tariff position:

90.23

0.23.00.00.00

95.03.30.00.00

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ARTICLE 5o. Article 426 of the Tax Statute will remain as follows:

" ULOC 426. PREFABRICATED HOUSES EXCLUDED FROM THE TAX. The following goods are excluded from the tax:

prefabricated houses whose value does not exceed 2,300 units of constant purchasing power, UPAC ".

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ARTICLE 6o. IMPORTS THAT DO NOT CAUSE TAX. Modify the literal e) of article 428 of the Tax Statute and include a new literal f), as follows:

e) The temporary importation of heavy machinery for basic industries, provided that such machinery does not occur in the country. Basic industries are those of mining, hydrocarbons, heavy chemicals, steel, extractive metallurgy, generation and transmission of electrical energy and obtaining, purification and conduction of hydrogen oxide. The concept of heavy machinery includes all the complementary elements or accessories of the main equipment;

(f) Import of machinery or equipment, provided that such machinery or equipment is not produced in the country, intended to recycle and process waste or waste (machinery comprises washing, separate, recycling and extrusion), and intended for the purification or treatment of waste water, atmospheric emissions or solid waste, for the recovery of rivers or basic sanitation to improve the environment, provided that they are part of a programme which is approved by the Ministry of the Environment. In the case of contracts already concluded, this exemption shall be reflected in a lower value of the contract. Likewise, the teams for environmental control and monitoring, including those to meet the commitments of the Montreal protocol. "

PARAGRAFO 2o. TRANSITIONAL. The amendment provided for in this Article shall apply only from 1 July 1996.

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ARTICLE 7o. Add article 437 of the Tax Statute with the following literals and paragraph:

" (e) Taxpayers belonging to the common sales tax regime, when making purchases or acquiring services taxed with persons belonging to the simplified scheme, for the value of the tax withheld on such transactions.

PARARAGRAFO. Persons belonging to the simplified scheme, who sell goods or provide services, are prohibited from adding to the price sum by way of sales tax. If they do so, they must comply fully with the predictable obligations of those who belong to the common regime. "

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ARTICLE 8o. Article 437-1 of the Tax Statute will be as follows:

" ARTICLE 437-1. WITHHOLDING TAX ON SALES TAX. In order to facilitate, accelerate and secure the collection of sales tax, establish the withholding tax on this tax, which should be practiced at the time the payment is made or the payment is made, whichever is the first.

The retention will be equivalent to fifty percent (50%) of the tax value. However, the National Government is empowered to authorise lower retention rates. "

The provisions of this Article shall apply from 1 February 1996.

PARAGRAFO. In the case of the provision of taxed services referred to in the number 3. In Article 437-2 of the Tax Statute, the withholding tax shall be equal to one hundred percent (100%) of the value of the tax.

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ARTICLE 9o. Add the Tax Statute with the following article:

" ARTICLE 437-2. RETENTION AGENTS IN SALES TAX. They will act as sales tax retainers in the acquisition of taxed goods and services:

" 1. The following state entities:

" The Nation, the departments, the capital district, and the special districts, the metropolitan areas, the municipalities ' associations and the municipalities; the public establishments, the industrial and commercial enterprises of the State, the mixed-economy companies in which the State has a share of more than 50% (50%), as well as indirect and indirect decentralised entities and other legal entities in which such public participation exists; majority is the denomination they adopt, in all orders and levels and in the State agencies or agencies to which the law grants the capacity to conclude contracts.

" 2. Those responsible for the sales tax that are listed as large contributors by the National Tax and Customs Directorate and those who by resolution of the DIAN are designated as withholding agents in the tax about the sales.

Effective Case-law

" 3. Those who contract with persons or entities without residence or domicile in the country the provision of services taxed in the national territory, in relation to them.

" 4. Persons responsible for the common system, when they acquire movable property or services taxed, from persons belonging to the simplified scheme.

" PARAGRAFO. The sale of goods or services to be carried out between sales tax withholding agents covered by the number 1o. and 2o. of this article shall not be governed by the provisions of this article. "

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ARTICLE 10. Add the Tax Statute with the following article:

" ARTICLE 437-3. LIABILITY FOR RETENTION. Sales tax withholding agents will respond for the sums they are required to retain. The penalties imposed on the agent for failure to fulfil his duties shall be his sole responsibility. "

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ARTICLE 11. Article 443-1 of the Tax Statute will be as follows:

" ARTICLE 443-1. RESPONSIBILITY FOR FINANCIAL SERVICES. In the case of financial services are responsible, in terms of services taxed, banking establishments, financial corporations, savings and housing corporations, commercial finance companies, warehouses general deposit and other financial institutions or financial services subject to the supervision of the Banking Superintendence of a commercial or cooperative nature, with the exception of the companies managing pension funds and (c) the financial institutions of the departmental and territorial.

Also responsible are those entities that normally develop operations similar to those of the entities mentioned in the previous paragraph, whether or not they are subject to State surveillance. "

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ARTICLE 12. Article 466 of the Tax Statute will be as follows:

" ARTICLE 466. TAXABLE BASE IN THE SALE OF MOTOR GASOLINE. The base to liquidate the sales tax on regular and extra motor gasoline, will be the income to the producer. In the case of import of gasoline, the taxable base shall be determined in accordance with the provisions of Article 459.

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ARTICLE 13. Modify the following numerals of article 476 of the Tax Statute, and add the numerals 14, 15, 16, 17, and 18:

" 3. Interest on credit operations, provided that they are not part of the taxable base referred to in Article 447, the commissions of the exchange commission, the management services of State funds, leasing (leasing). Services linked to social security in accordance with the provisions of Law 100 of 1993.

Effective Case-law

4. Utilities, aqueduct and sewer, public toilet, garbage collection and gas house either driven by pipeline or distributed in cylinders. In the case of the local telephone service, the first 250 monthly impulses charged to strata 1 and 2 and the telephone service provided from public telephones are excluded from the tax.

Effective Case-law

5. The rental service of buildings, including the leasing of spaces for exhibitions, fairs, and national handcrafted samples.

6. Education services provided by pre-school, primary, middle and intermediate, higher and special or non-formal education establishments recognised as such by the government and education services provided by natural persons to such establishments. The following services are also excluded from the education establishments referred to in this number: restaurant, cafeteria and transport, as well as those which are provided for in the development of Laws 30, 1992 and 115 1994.

10. Toilet services, surveillance services approved by the Ministry of Defense, and temporary employment services when they are provided by companies authorized by the Ministry of Labor and Social Security or the National Administrative Department of Cooperatives.

11. Commissions for transactions executed by users of credit and debit cards; commissions received by trust companies for the management of common funds; and brokerage fees for the concept of the placement of capitalization and insurance and reinsurance securities and the health plans of the general health insurance system issued by entities legally authorized by the National Superintendence of Health, which are not submitted to sales tax.

Effective Case-law

14. Repair services to maritime vessels and to flag or foreign aircraft.

15. Entry tickets to sporting events, cultural events including musicals, and family recreation.

16. Hair cutting service for men and women.

17. The following services, provided that they are intended for the adaptation of land, agricultural and fishing production and the marketing of the respective products:

(a) Irrigation of land dedicated to agricultural exploitation;

b) The design of irrigation systems, their installation, construction, operation, administration and conservation;

c) Construction of reservoirs for agricultural activity;

d) The preparation and cleaning of seed land;

e) Control of pests, diseases and weeds, including aerial and land spraying of crops;

f) Cutting and mechanized harvesting of agricultural products;

g) Cotton desmote, threshing and drying of agricultural products;

h) The selection, classification and packaging of agricultural products without industrial processing;

i) Technical assistance in the agricultural sector;

j) Capture, processing and marketing of fishery products;

k) The passage and rental of pens at major and minor livestock fairs;

l) The seeding;

m) Construction of drains for agriculture;

n) Building ponds for fish farming;

n) Animal health programs, and

o) The drilling of deep wells for water extraction.

Users of the services excluded by this numeral shall issue a certification to the person providing the service, where the destination is recorded, the value and the name and identification of the service. The person who provides the service shall maintain such certification during the period specified in Article 632 of the Tax Statute, which shall serve as a support for the exclusion of services.

18. The services and commissions directly related to negotiations of products of origin or agricultural destination that are carried out through bags of legally constituted agricultural products ".

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ARTICLE 14. Article 468 of the Tax Statute will be as follows:

" ARTICLE 468. GENERAL SALES TAX RATE. The general rate of sales tax is 16% (16%), for the years 1996, 1997, 1998 and onwards.

This rate will also apply to services, with the exception of those expressly excluded. The general fee will also apply to the goods covered by items 446, 469 , and 474.

Of sixteen percent (16 percent), which is fixed here, two and a half percent (2.5 percent) percentage points, discounted transfers to the territorial entities referred to in the articles 356 and 357 of the Political Constitution, will be allocated exclusively for social investment expenses, as provided for in the number 2o, of the Article 359 of the same Constitution, taking into account the following targets and proportions:

1. At least thirty per cent (30%) for expenditure of the subsidiary health system, established by Law 100 of 1993, Community households and for pre-school, primary, secondary and secondary education, preferably from those departments or districts whose fiscal position per poor inhabitant is below the national average and for the expenditure of welfare households and other programmes aimed at children, Community mothers to complete the value of the UPC of the subsidised scheme that treats the Law 100 of 1993 in order to ensure that Community mothers and fathers workers in solidarity with the community households of the Family Welfare Institute may join the Social Insurance Institute or health-promoting company that they choose in such a way as to enable them to receive the benefits established by the the contributory scheme provided for in the said law, to increase the value of the grant of working community mothers and fathers of the community households of the Colombian Institute of Family Welfare.

2. At least thirty percent (30%) for resources that demand rural social spending, which includes rural, indigenous and rural development, and the Plante program, rural social housing, also part of these resources. This appropriation is intended to cover credit subsidies for small farmers in areas that are identified as being notoriously depressed, in accordance with the regulations established by the government, in the terms outlined in the development plan.

In any case, of the resources referred to in this number two, at least seven percent (7%) will be allocated for rural housing, the Living Better program. Respecting the radication of the projects in the Agrarian Box. 59 of the Law 383 of 1997: > In priority the regions and communities identified as high risk of Chagas by the Ministry of Health.

Vigency Notes

And a minimum of 10% (10%) on two percentage points of the 16% (16%) VAT, during two consecutive fiscal vigencies from 1996, will be applied to the attention and relief of the debts contracted by the coffee growers. for the development of its activity, before December 31, 1994 with Bancafe, the Agrarian Fund and the National Coffee Fund, and whose original capital does not exceed three million pesos ($3,000,000). And half a percentage point of the 16% (16%) VAT, to cater for the other depressed agricultural sectors.

Editor Notes

3. A minimum of 20% (20%) to cover the subsidies of the sectors corresponding to the residential strata 1, II and III of the electrical sector, subtransmission, transformation, distribution and correction of black and technical losses, Law 143 of 1994, to subsidize the residential strata I, II, III in the installation and connection to the system of the use of house gas Law 142 of 1994, for transport in the programs of mass of natural gas, to subsidize and to provide the service of drinking water in rural areas.

4. At least ten per cent (10 per cent) for official national, departmental, district and municipal pension funds.

5. 64 of Act 383 of 1997. The new text is as follows: > At least three percent (3%) for prevention, promotion, diagnosis, surgical medical treatment and comprehensive rehabilitation, including transplants in cases that are indicated, of diseases cardiovascular, diabetes, hematological, hepatic, oncological, renal and plastic reconstructive, children of parents of scarce resources, program that will be executed by the Ministry of Health.

Vigency Notes
Previous Legislation

6. 64 of Act 383 of 1997. The new text is as follows: > Two percent (2%) to develop programs for the third age different from the Revivir program, for the improvement of the country's mental health institutions and the attention of inimputable and for programs of disability of children of parents of scarce resources and of psychosocial rehabilitation of children.

Vigency Notes
Previous Legislation

" PARAGRAFO 1o. The percentages or proportions set forth in this article shall be reviewed every two years (2) years counted from the time of this law.  Likewise, the National Government will have the uncommitted surpluses to finance other sectors or social investment programs.

" PARAGRAFO 2o. For the strict implementation of this article, a monitoring and control commission, composed of the National Government, representatives of the productive sector and the social sector, and two (2) members of each of the commissions will be appointed. The third, fifth and seventh Senate of the Republic, and three (3) of the House of Representatives respectively.

" PARAGRAFO 3o. The Ministry of Finance must submit to the monitoring committee a six-monthly report on the collection of VAT and on the implementation of the specific destinations presented in this article.

" PARAGRAFO 4o. In the case of contracts with public entities, the tenders of which have been awarded prior to the validity of this law, the tariff in force shall continue to apply at the date of the award of the invitation to tender. "

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ARTICLE 15. Article 469 of the Tax Statute will be as follows:

" ARTICLE 469. MOTOR VEHICLES WITH GENERAL TARIFF. They are subject to the general sales tax rate for the following motor vehicles, with motor of any kind:

1. Cabs and cabs also classifiable by tariff headings 87.03.21.011, 87.03.22.0.11, 87.03.23.00.11, 87.03.24.00.11, 87.03.31.00.11, 87.03.32.00.11 and 87.03.33.0.11.

2. Vehicles for the transport of 10 persons or more, including the driver, of heading 87.02 of the tariff.

3. Vehicles for the transport of cargo, of gross vehicle weight of 000 pounds American or more.

4. The ambulance, cell and mortuary cars.

5. The three-wheel drive trains for freight transport with a maximum capacity of £ 1,700.

Likewise, the general sales tax rate will apply to motorcycles manufactured or assembled in the country with motor up to 185 c.c., to the chastes cabineas and to the bodies of the items 87.06 and 87.07, provided that Some and others are destined for the vehicles of the numerals mentioned in this article ".

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ARTICLE 16. Article 471 of the Tax Statute will be as follows:

" ARTICLE 471. TARIFFS FOR MOTOR VEHICLES. Goods vehicles of headings 87.02, 87.03 and 87.04 of the Customs Tariff are subject to the tariff of 40% and 5% (45%) in the import and sale made by the importer, the producer or the marketer or when the result of the service is dealt with by the paragraph of article 476. The motor vehicles referred to in Article 469, which are subject to the general tariff, are exempted from the motor vehicles indicated in the ordinal 1o. of this Article, which are subject to the rate of 20% (20%), and the motor vehicles indicated in the ordinal second of this article which are subject to the tariff of thirty-five per cent (35%).

In the same way, they are subject to the tariff of forty-five per cent (45%) of the chastes of heading 87.04, the chaisis with motor of heading 87.06, the bodies (including the cabins) of heading 87.07, provided that some of them are and others are intended for motor vehicles subject to the tariff of 40% and 5% (45%); likewise, aerodines operating without machinery, of heading 88,01, and the recreational and sports boats of heading No 89.03, of more than 30 feet, of foreign manufacture.

Goods vehicles classifiable by heading 87.03, with the exception of those referred to in Article 469, the value of which in the import declaration is equal to or greater than thirty-five A thousand dollars (USD 35,000), including customs duties, will be taxed at the rate of sixty percent (60%).

In the case of the placing on the market of goods vehicles produced in the country, classifiable by heading 87.03, with the exception of those referred to in Article 469, and their price in the factory is equal to or greater than the same amount indicated in the previous paragraph, excluding the sales tax, the tax rate will be sixty percent (60%). The same rate applies to private service aircrafts.

1. Goods subject to the 20% tariff. The following goods are subject to the special rate of 20% (20%):

(a) Motor vehicles for the transport of persons, manufactured or assembled in the country, with motor up to 1,400 c.c., other than those referred to in Article 469 of the Tax Statute;

(b) Vehicles for the carriage of goods of heading 87.04, whose gross vehicle weight is less than 10 thousand (10,000) American pounds;

(c) The chaisis with engine of heading 87.O6 and the bodies (including cabs) of heading 87.07, provided that each other is intended for vehicles covered by the two preceding literals;

(d) Motorcycles and motorcycles with sidecar, manufactured or assembled in the country, with a motor of more than 185 c.c.;

(e) The recreational and sport vessels of heading 89.03, of national production, and

(f) Vehicles of heading No 87.03. 21.0.19, 87.03.22.00.19, 87.03.23.00.19, 87.03.24.00.19, 87.03.31.00.19, 87.03.32.00.19 and 87.03.33.00.19, other than taxis and those covered by the 3o points. and 4. of this article.

2. Goods subject to the rate of 30% and 5% (35%). They are subject to the special rate of thirty-five percent (35%) of the following goods:

(a) Motor vehicles for the transport of persons, with a motor higher than 1,400 c.c. and up to 1,800 c.c.;

(b) Imported motor vehicles, for the carriage of persons with motor vehicles up to 1,400 c.c., other than those referred to in Article 469 of the Tax Statute;

(c) The chaisis with engine of heading 87.06 and the bodies (including cabins) of heading 87.07, provided that each other is intended for the motor vehicles concerned by the two preceding literals;

d) Motorcycles and motorcycles with sidecar, imported, and

e) The recreational and sports boats of heading 89.03, up to 30 feet, of foreign manufacture.

" PARAGRAFO. Repeal Articles 470 and 472 of the Tax Statute.

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ARTICLE 17. Article 473 of the Tax Statute, will be as follows:

" ARTICLE 473. GOODS SUBJECT TO DIFFERENTIAL TARIFFS OF 35% OR 20%. The goods included in this article are subject to the differential rate of thirty-five percent (35%), when the sale is made by the person who produces them, imports them or markets them, or when they are the result of the service to which they are refers to the paragraph in article 476.

" Tariff Item Denomination of the merchandise

" 22.08 Undenatured ethyl alcohol with a degree

alcoholic strength by volume less than 80% vol.;

spirits, liqueurs, and other beverages

spirits; alcoholic preparations

composed of the type of those used for the

brewing of beverages, other than:

sabajons, ponches, creams and snacks from

less than 20 degrees.

PARAGRAFO. Imported premium imported whiskys, understood by those who have an aging period equal to or greater than twelve (12) years, are subject to the differential rate of twenty percent (20%). "

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ARTICLE 18. The literal (a) of article 474 of the Tax Statute will be as follows:

" a) Gasoline engine, 16% of the income to the producer. In case of imports, 16% of the base referred to in Article 459".

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ARTICLE 19. Article 476-1 of the Tax Statute will be as follows:

" ARTICLE 476-1. INSURANCE TAKEN ABROAD. Insurance taken abroad to protect the risks of transport, ships, aircraft and vehicles registered in Colombia, as well as goods located in the national territory, will be taxed on the sales tax at the general tariff, where they are not taxed in the country of origin.

" When in the country in which the insurance is taken, the service is taxed on sales tax at a rate lower than that indicated in the previous subparagraph, the tax will be charged with the tariff equivalent to the difference between the applicable in Colombia and that of the country concerned. Helmet, accident and liability insurance to third parties, ships or aircraft for the international carriage of goods and those contracted by the solidarity and guarantee fund established by Law 100 of 1993, taken in the country or on the outside, they will not be taxed on sales tax. "

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ARTICLE 20. The literal c) of article 481 of the Tax Statute will be as follows:

" (c) School-type notebooks of heading 48.20 of the Customs Tariff and the forms referred to in Article 478.

Add article 481 with the following literals:

d) Milk powder of heading 04.02.10; diapers; edible fats and oils of headings 15.07, 15.11, 15.12, 15.13, 15.16 and 15.17 of the customs tariff; soybean oil and its fractions; condoms; sanitary napkins and devices Contraceptives, personal soap, soap in bar for washing and packaged water, and

e) Services that are provided in the developing country of a written contract and are used exclusively abroad, by companies without business or activities in Colombia, are also exempt from the sales tax. requirements that point to the regulation ".

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ARTICLE 21. Add the Tax Statute with the following article:

" ARTICLE 484-1. TREATMENT OF SALES TAX WITHHELD. Those responsible for the sales tax subject to the withholding tax in accordance with Article 437-1 of the Tax Statute may carry the amount of the tax that has been imposed on them. retained, as a lower value of the balance to be paid or greater value of the balance in favour, in the statement of the period during which the retention was made, or in the amount corresponding to any of the two immediately following tax periods. '

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ARTICLE 22. Add the Tax Statute with the following article:

" ARTICLE 485-1. SALES TAX REBATE CLEARED ON TAXABLE TRANSACTIONS CARRIED OUT WITH THE SIMPLIFIED SCHEME. The sales tax withheld in the transactions referred to in the literal (e) of Article 437may be deducted by the person responsible under the common scheme in the form provided for by Articles 483 and 485 of the Tax Statute. "

Editor Notes
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ARTICLE 23. SIMPLIFIED SCHEME. Article 499 of the Tax Statute shall be as follows:

" ARTICLE 499. THOSE WHO BELONG TO THIS REGIME. Retail traders or retailers, whose sales are taxed at the general sales tax rate, as well as those who provide taxed services, may be registered under the simplified sales tax scheme when comply with all of the following conditions:

1. Let them be natural people.

2. Have maximum two trading establishments.

3. Other than importers of movable property.

4. May not sell on behalf of third parties so be in their own name.

5. Their net income from their commercial activity in the previous fiscal year is less than the sum of forty-four million pesos ($44,700,000 base year 1994).

6. " That its fiscal gross patrimony December at 31 December of the year immediately preceding it, is less than one hundred and twenty-four million pesos ($124,200,000 base value year 1994).

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ARTICLE 24. Article 502 of the Tax Statute will be as follows:

" ARTICLE 502. SALES TAX AS COST OR INCOME EXPENSE. Those responsible for the simplified scheme may carry the sales tax that they have paid in the purchase of goods and services as cost or expense in their income statement, when they meet the requirements to be treated as tax. accounting.

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ARTICLE 25. Article 505 of the Tax Statute will be as follows:

" ARTICLE 505. COMMON TO SIMPLIFIED REGIME CHANGE. Those responsible under the common scheme will only be eligible for the simplified scheme when they show that in the previous three (3) fiscal years, the conditions set out in Article href="pr021.html#499"> 499".

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ARTICLE 26. Article 510 of the Tax Statute, will remain:

" ARTICLE 510. SALES TAX ACCOUNT HELD. Sales tax withholding agents must bear an account called "sales tax withheld" where the cause and payment of the retained securities are recorded. "

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ARTICLE 27. Add article 530 of the Tax Statute with the following number:

" 52. Orders for the purchase or sale of goods or services, and commercial offers which are accepted on the occasion of the issue of the order of purchase or sale.

Numerals 9o., 15 and 22 of article 530 of the Tax Statute will remain so:

9. The endorsement of securities securities and the documents that are granted for the sole purpose of specifying the conditions of the negotiations, such as those that are carried out in the development of operations of portfolio sale, reported, carousel, options and futures.

15. The documents signed with the Bank of the Republic by the cattlemen's funds and the Educational Credit Institute to use ordinary, extraordinary or special credit quotas. Similarly, the documents in which credit operations are recorded between the Bank of the Republic and the credit institutions or between the latter.

22. The property purchase promise contracts ".

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ARTICLE 28. Modify the following numerals and the paragraph in article 574 of the Tax Statute:

" 2. Bimonthly declaration of sales tax, for those responsible for this tax belonging to the common regime.

3. Monthly statement of withholding tax, for the agents retainers of income tax and supplementary, sales tax, and national stamp duty.

" PARAGRAFO 1o. Without prejudice to the provisions of numerals 2o. and 3o., of this Article, non-income and supplementary income tax entities shall submit an annual statement of income and equity, unless they have been expressly excepted in the article 598".

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ARTICLE 29. Add article 592 of the Tax Statute with the following numeral:

" 4. The contributors noted in article 414-1 of this Statute ".

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ARTICLE 30. Article 594-2 of the Tax Statute will be as follows:

" ARTICLE 594-2. TAX RETURNS FILED BY THE NON-OBLIGATED. Tax returns filed by non-obligated to declare will not have any legal effect. "

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ARTICLE 31. Article 600 of the Tax Statute will be as follows:

" ARTICLE 600. SALES TAX PERIOD. The tax period of sales tax will be bimonthly. The bimonthly periods are January-February; March-April-May-June; July-August; September-October and November-December.

" PARAGRAFO. In the case of settlement or termination of activities during the financial year, the tax period shall be counted from its initiation to the dates referred to in Article 595.

"When activities are initiated during the financial year, the fiscal period shall be between the date of initiation of activities and the end date of the respective period."

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ARTICLE 32. Article 601 of the Tax Statute will be as follows:

" ARTICLE 601. WHO MUST PRESENT A SALES STATEMENT. They shall submit a bimonthly sales tax declaration, as the case may be, those responsible for this tax, including exporters.

They are not required to file sales tax returns, those responsible for the simplified scheme. "

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ARTICLE 33. Article 603 of the Tax Statute will be as follows:

" ARTICLE 603. OBLIGATION TO DECLARE AND PAY THE SALES TAX WITHHELD. The value of the sales tax withheld must be declared and paid within the time limits specified by the National Government, using the same form as prescribed by the National Customs and Tax Directorate to declare Withholding taxes on the source of income and stamp taxes. "

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ARTICLE 34. Add article 615 of the Tax Statute with the following paragraph:

" PARAGRAFO 2o. Those who have the quality of sales tax withholding agents must issue a bimonthly certificate that meets the requirements of Article 381 of the Tax Statute. At the request of the payment beneficiary, the withholding agent shall issue a certificate for each retention made, which shall contain the same specifications of the bimonthly certificate.

" In the other respects the forecasts of the paragrafos 1o will be applied. and 2., of article 381 of the Tax Statute. "

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ARTICLE 35. Add the Tax Statute with the following article:

" ARTICLE 615-1. OBLIGATIONS OF THE WITHHOLDING AGENT IN THE SALES TAX. Where the sales tax withholding agent acquires taxed goods or services, it must liquidate and retain the tax by applying the corresponding withholding tax, which in no case may be more than 50% of the tax settlement, and issue the certificate referred to in paragraph 2 of Article 615 of the Tax Statute.

32 of Act 383 of 1997. The new text is as follows: > Entities marked as sales tax withholding agents, in item 1 of 437-2, must discriminate against the value of the tax on the sales retained in the document ordering the recognition of the payment. This document replaces the sales tax retention certificate.

The government will point out the concepts and minimum amounts not subject to withholding tax on sales tax. "

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ARTICLE 36. Article 616 of the Tax Statute will be as follows:

" ARTICLE 616. FISCAL BOOK OF RECORD OF OPERATIONS. Those who place goods on the market or provide taxed services belonging to the simplified scheme shall be required to carry the daily operations record book for each establishment, in which the taxpayer is identified, duly The operations carried out on a daily basis are recorded and recorded on a daily basis. At the end of each month they shall, on the basis of the invoices issued to them, total the value paid in the purchase of goods and services, as well as the income obtained in the course of their business. "

" This fiscal book shall be based on the establishment of trade and the non-presentation thereof at the time required by the administration, or the establishment of the delay, shall give rise to the application of the sanctions and procedures referred to in paragraph 1. Article 652, being able to establish such facts by means of the method outlined in article 653.

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ARTICLE 37. Add the Tax Statute with the following article:

" ARTICLE 616-1. INVOICE OR EQUIVALENT DOCUMENT. The invoice for sale or equivalent document shall be issued for transactions with traders, importers or service providers or for sale to final consumers.

They are documents equivalent to the sales invoice: the registration machine ticket, the ticket to public shows, the electronic bill, and the others that the National Government points out.

Within six months of this Act the National Government will regulate the use of the electronic bill. "

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ARTICLE 38. Add the Tax Statute with the following article:

" ARTICLE 616-2. CASES IN WHICH THE INVOICE ISSUE IS NOT REQUIRED. No bill issuance will be required in operations conducted by banks, financial corporations, savings and housing corporations and commercial finance companies. Nor shall this obligation exist in the sales made by those responsible for the simplified scheme, and in the case of the disposal of goods resulting from agricultural or livestock farming by natural persons, where the amount of the operation is less than two million pesos ($2,000,000 base year 1995 value), and in other cases the National Government is pointed out. "

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ARTICLE 39. Add the Tax Statute with the following article:

" ARTICLE 616-3. Companies which produce invoices without complying with the requirements laid down in the rules or when they are used to issue invoices with repeated numbering for the same or responsible taxpayer, will be sanctioned with the closure for one day of the establishment or site where the activity is carried out.

Once the closing sanction has been applied, in the event of retaking within the next 2 years in any of the acts punishable by this measure, the sanction to be applied will be the closing for ten (10) calendar days and a fine equivalent to that set in the form provided for in article 655.

When the place closed was additionally room house, the people who inhabit it will be allowed access, but in it no commercial operations or the development of the activity or trade can be carried out, for the time that the sanction and in any case, the corresponding stamps shall be imposed.

The sanction referred to in this article shall be imposed by resolution, upon transfer of charges to the offending person or entity, who shall have a term of ten (10) days to respond. Against this providence, the appeal provided for in Article 735 of the Tax Statute is appropriate.

The penalty will be effective within ten (10) days of the exhaustion of the gubernative path. "

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ARTICLE 40. Article 617 of the Tax Statute will be as follows:

" ARTICLE 617. REQUIREMENTS OF THE SALES INVOICE. For tax purposes, the invoice issue referred to in Article 615 consists of delivering the original of the same, with the full of the following requirements:

a) Be expressly named as a sales invoice;

b) Surname and name or reason and NIT of the seller or the person providing the service;

(c) Surname and name or social name of the acquirer of the goods or services, where this requires discrimination against the tax paid, as it is a responsible person entitled to the corresponding discount;

d) Bring a number that corresponds to a consecutive numbering system of sales invoices;

e) Date of issue;

f) Specific or generic description of the items sold or services provided;

g) Total value of the operation;

h) The name or social reason and the NIT of the invoice printer, and

i) Indicate the quality of sales tax retainer.

At the time of issue of the invoice the requirements of literals (a), (b), (d) and (h) must be previously printed through lithographic, typographical or industrial techniques of a similar nature. When the taxpayer uses a computer billing system or recording machines, the printing made by such means is met with the requirements of previous printing. The billing system must number in a row the invoices and the necessary means must be provided for verification and auditing.

" PARAGRAFO. In the case of companies selling transport tickets it will not be mandatory to deliver the original of the invoice. It will be enough to deliver copy of it. "

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ARTICLE 41. Add the Tax Statute with the following article:

" ARTICLE 618-2. Persons or entities producing invoices or equivalent documents shall fulfil the following obligations:

1. Prepare invoices or documents equivalent to the requirements laid down in the Tax Statute and with the characteristics prescribed by the National Customs and Tax Directorate.

2. Keep a record of the persons or entities that have requested the processing of invoices, with their identification, address, number of invoices prepared for each client and respective numbering.

3. To refrain from making invoicing in relation to a particular customer to whom the same numbering has been drawn up by that undertaking.

4. Issue an invoice for the provision of the service, which, in addition to complying with the requirements laid down in Article 617 of the Tax Statute, must have the constancy of the first and last number consecutive of those documents, which he has prepared for the acquirer of the service. "

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ARTICLE 42. Add the Tax Statute with the following article:

" ARTICLE 618-3. DEADLINE TO START APPLYING THE BILLING SYSTEM. The new requirements laid down in the preceding Articles must be fulfilled for the invoicing issued from 1 July 1996. '

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ARTICLE 43. COMPENSATION OF BALANCES IN FAVOR. The paragraph of article 815 of the Tax Statute will be as follows:

" PARAGRAFO. In the case of sales tax liability, the compensation of balances in favour arising from the sales tax declaration may be requested only by those responsible for the goods and services in question. Article 481, and by those that have been the object of retention.

Will be entitled to compensation, the entities that have paid sales tax on the acquisition of building materials for housing of social interest, whose plans are duly approved by the Inurbe, or by whom Delegated body. They shall also be entitled to the compensation provided here, the cooperatives, non-governmental organizations and other non-profit entities, which carry out self-construction plans, previously approved by the Inurbe or its delegate.

They are exempt from sales tax, and consequently give rise to compensation, sales of materials for self-construction, by cooperatives, non-governmental organizations and other non-profit entities. referred to in the preceding paragraph, provided that they are carried out on natural persons, and that the individual value does not exceed the equivalent of a minimum monthly salary, in terms and with the fulfilment of the requirements laid down in the regulation.

It is exempt from sales tax, with the right to compensation, the barbed wire. "

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ARTICLE 44. Article 652 of the Tax Statute will be as follows:

" ARTICLE 652. PENALTY FOR ISSUING INVOICES WITHOUT REQUIREMENTS. Those who are obliged to issue invoices, do so without the fulfilment of the requirements laid down, shall incur a closure or closure of the establishment of trade, office, office or place where the activity, occupation or occupation is carried out. trade, in accordance with the provisions of Articles 657 and 658.

When the sanction referred to in this article is imposed by independent resolution, the person or entity shall be transferred in advance to sanction, who shall have a term of ten (10) days to respond. "

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ARTICLE 45. Article 653 of the Tax Statute will be as follows:

" ARTICLE 653. CONSTANCY OF THE NON-ISSUE OF INVOICES OR ISSUE WITHOUT THE FULL OF THE REQUIREMENTS. Where, in respect of transactions in respect of which an invoice is to be issued, this obligation is not complied with or is met without the full of the requirements laid down in the law, two officials appointed in particular by the head of the division of the audit for that purpose, which has established the infringement, shall attest to the fact, by means of an act in which it is entered and the explanations given by the person who carried out the operation without issuing the invoice. At the later stage of discussion, no explanations other than those entered in the respective minutes may be adduced. "

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ARTICLE 46. The title and first paragraph of article 656 of the Tax Statute will remain so:

" ARTICLE 656. REDUCTION OF PENALTIES FOR ACCOUNTING BOOKS. The financial penalties referred to in Article 655 shall be reduced as follows:

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ARTICLE 47. CLOSING SANCTION OF THE ESTABLISHMENT. Literal a) and paragraph 4 of Article 657 of the Tax Statute shall remain as follows:

" (a) Where no invoice or equivalent document is issued or is required to do so or is issued without the fulfilment of the requirements.

Once the closing sanction has been applied, if any of the acts punishable by this measure are incurred again, the penalty to be applied will be the closure for ten (10) calendar days and a fine equivalent to that established in the form provided in article 655".

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ARTICLE 48. RETURN OF THE SALES TAX WITHHELD. Add the Tax Statute with the following article:

" ARTICLE 815-1. Taxpayers subject to sales tax withholding, who obtain a balance in their sales tax return, may request the return of the respective balance, or charge it in the statement corresponding to the next fiscal period. "

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ARTICLE 49. RETURN OF BALANCES IN FAVOR. Article 850 of the Tax Statute will be as follows:

" ARTICLE 850. RETURN OF BALANCES IN FAVOR. Taxpayers or those responsible who liquidate balances in their tax returns may request their return.

" The National Tax and Customs Directorate shall return the taxpayers in due time, the overpayments or the due, which they have made for the purposes of tax and customs duties, whatever the concept of the payment, following the same procedure that applies for the returns of the balances in favor.

" PARAGRAFO. In the case of sales tax liability, the return of balances in favour of the sales tax return may be requested only by those responsible for the goods and services in question. Article 481, and by those that have been the object of retention.

" Will be entitled to the return of sales tax paid on the purchase of building materials for housing of social interest, the entities whose plans are duly approved by the Inurbe, or by whom this body delegate. They shall also be entitled to the refund provided here, the cooperatives, non-governmental organizations and other non-profit entities, which carry out self-construction plans, previously approved by the Inurbe, or its delegate.

" They are exempt from sales tax, and consequently result in return, sales of materials destined for self-construction, which are carried out by cooperatives, non-governmental organizations and other non-profit entities. referred to in the preceding paragraph, provided that they are carried out on natural persons, and that the individual value does not exceed the equivalent of a minimum monthly salary, in terms and with the fulfilment of the requirements laid down in the regulation.

"Is exempt from sales tax, with right to return, barbed wire."

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