Key Benefits:
LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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DECREE NO 148
THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR,
CONSIDERING:
I.-That Art. 101, second paragraph of the Constitution of the Republic, states that the State shall promote the economic and social development of the country through the
increase of production, productivity and rational use of resources; and for the same purpose, it will encourage the various sectors of
II.-That by Legislative Decree No. 462, dated November 8, 2007, published in the Official Journal No. 238, Volume No. 377, of December 20 of the
same year, the Law of Tax Incentives for the Promotion was issued Renewable Energy in the Generation of Electricity.
III.-That it is necessary to encourage the use of renewable energy sources, in order to reduce dependence on the purchase of fossil fuels, to reduce pollution In the country, reduce the emission of greenhouse gases and significantly improve the balance
IV.-That technological development has opened possibilities for the use of different renewable energy sources that are currently not covered by the Law,
renewable sources in the generation of electricity and, at the same time, allow investments that enable the sustainable development of large-scale projects using this type of
energy resources available in the country, which are currently excluded from the benefits of the Law.
V.-That for the above In the above recitals, it is imperative to reform the aforementioned Law, in order to include new energy sources and extend the coverage of incentives to larger projects.
BY TANTO,
in use of its powers Constitutional and at the initiative of the President of the Republic, through the Minister of Economy, and with the support of the Deputies and the Deputies Lorena Guadalupe Peña Mendoza, Ana Vilma Albanez de Escobar, José Serafin Orantes Rodríguez, Santiago Flores Alfaro, Jackeline
Noemi Rivera Avalos, Margarita Escobar, Rodolfo Antonio Martinez, Jose Javier Palomo Nieto, Karla Elena Hernández Molina, Calixto Mejía Hernández, Martyr Arnoldo Marín, Damián Alegría, Ana Marina Alvarenga Barahona, Rolando Alvarenga Argueta, Dina Yamileth Argueta Avelar, Rodrigo Avila Avilés, Ana Lucia Baires
Martinez, Rosa Armida Barrera, Luis Alberto Batres Garay, Marta Evelyn Batres Araujo, Yohalmo Edmundo Cabrera Chacon, Manuel Orlando Cabrera Candray, Jose Vidal Carrillo Delgado, Silvia Alejandrina Castro Figueroa, Crissia Suhan Chavez Garcia, Norma Cristina Cornejo Amaya, Valentin Aristides Corpeno, Felissa Guadalupe Cristales Miranda, Rosa Alma Cruz Seaman, René Alfredo Portillo Cuadra, Lucia del
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Carmen Ayala de Leon, José Edgar Escolan Batse, Jorge Adalberto Josue Godoy Cardoza, Ricardo Ernesto Godoy Penate, Norma Fidelia Guevara de Ramírios, Estela Yanet Hernández Rodríguez, Ana Mercedes
Larrave de Ayala, Audelia Guadalupe Lopez de Kleutgens, Hortensia Margarita López Quintana, Mario Marroquín Mejia, Rolando Mata Fuentes, Maria Otilia Matamoros de Hernandez, Misael Mejia Mejia, Jose Santos Melara Yanes, Ana Victoria Mendoza de Zacarias, Julio Cesar Miranda Quezada, José Mario Mirasol
Cristales, José Alfredo Mirón Ruiz, Ernesto Luis Muyshondt García Prieto, Ana Maria Gertrudis Ortiz Lemus, Silvia Estela Ostorga de Escobar, Carlos Alberto Palma Zaldana, Lisseth Arely Palma Figueroa, Nelson de Jesus Quintanilla Gomez, Carlos Armando Reyes Ramos, Sonia Margarita Rodriguez Siguenza, Alberto
Armando Romero Rodriguez, Carlos Alberto Garcia, Marcos Francisco Salazar Umana, Patricia Maria Salazar de Rosales, Jaime Orlando Sandoval, Karina Ivette Sosa, Victor Hugo Suazo Alvarez, Carlos Alfonso Tejada Ponce, Jaime Gilberto Valdés Hernandez, Patricia Elena Valdivieso de Gallardo, Juan Alberto Valiente
Alvarez, Donato Eugenio Vaquerano Rivas, Mauricio Ernesto Vargas Valdez, Ricardo Andres Velasquez Parker, John Tennant Wright Sol.
DECRETA the following:
REFORMS TO THE TAX INCENTIVES LAW FOR THE PROMOTION OF ENERGY
RENEWABLE IN ELECTRICITY GENERATION
Art. 1.-Substitute Art. 1, for the following:
" Art 1.-This Law aims to promote the realization of investments in projects from the use of renewable energy sources, through the use of resources such as the hydraulic, geothermal, wind, solar, marine, biogas and biomass; as well as any other source that
will be identified as renewable for the generation of electric power. "
Art. 2.-Replace Art. 3, by the following:
" Art. 3.-The natural or legal persons who from the validity of this Law are the holders of new investments in projects of installation of power plants for the generation of energy
existing generation, using renewable energy sources, as provided for in Art. 1 of this Law, will enjoy the following benefits and tax incentives exclusively in relation to the costs and expenses of the investment
to those projects:
a) For the first ten years they will enjoy Total exemption from the payment of tariff duties
Import of machinery, equipment, materials and inputs intended exclusively for pre-investment and investment in the construction and expansion of works of the plants for the generation of electrical energy, including the construction or expansion of the substation, the line of
transmission or subtransmission, necessary to transport the energy from the power station to the transmission and/or transmission networks electrical distribution.
The exemption from payment of the Tariff Import shall be requested from the Ministry of Finance at least 15 days prior to the importation of the necessary machinery, equipment, materials and inputs and intended exclusively for the development of renewable energy projects, compliance with the project documentation endorsed in the certification issued by the
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General Superintendence of Electricity and Telecommunications, which in the text of this Law may be referred to as SIGGET.
Except for the benefit contained in this literal, the acquisition of the following goods: furniture and household goods, as well as vehicles for the transport of persons individually or
collective.
(b) The income derived directly from the generation of energy based on renewable sources,
shall enjoy total exemption from the payment of the Income Tax for a period of five years in the case of projects exceeding 10 years. (MW); and ten years in the case of projects of 10 or less megawatts (MW); in both cases, counted from the fiscal year in which it obtains revenues
derived from the generation of energy based on renewable sources.
c) Total payment of all taxes on revenue coming directly
from the the sale of the 'Reduced Emissions Certificates', hereinafter referred to as the 'Clean Emission Certificates', under the Kyoto Protocol's Clean Development Mechanism (CDM) or similar carbon markets, obtained by qualified and benefited projects under This Law.
To benefit from the benefits referred to in the preceding literal, the beneficiary must comply with the following conditions:
i. That the projects are duly registered and certified in accordance with the modalities and procedures of the Clean Development Mechanism (CDM) of the Kyoto Protocol, or similar carbon markets.
ii. That the holders of the projects qualified in accordance with this Law, add in their income tax return a detail of the ERCs issued and revenues
obtained from their sale, stating the name of the acquiring.
iii. Present certified copy of the purchase contract of the certified reductions of
emissions (ERPA) on the record of the quantity of such reductions sold and the price of their sale.
iv. of the Ministry of the Environment and Natural Resources, on the amount issued by CER.
In the case of geothermal power plants, it may be deducted from income tax for a maximum period of ten years, costs and expenses related to the activities related to the process of total reinjection of the geothermal resource. This deduction may not exceed 20% of gross receipts
generated in the previous year and shall be carried out by means of annual instalments that do not exceed 25% of the income obtained in each financial year, up to the total amortization.
For the purposes of the deduction of the corresponding tax credits contained in Art. 65 of the Law on the Transfer of Furniture and Services to the Service, in respect of installation projects or extension of power plants for power generation, using sources renewable energy, the deduction to which such a rule is referred to
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dealing with pre-investment work and investment in construction the necessary works and components of the process electrical energy degeneration, including those made in
buildings, either by adhesion or destination.
The tax benefits described in this article will be granted only to the activities
corresponding to the installation projects or expansion of power generation plants, which are benefited by this Law, that involve a new investment.
For the purposes of this Law, it is understood by new investments, those that represent an acquisition to any title, additional assets allowing the installation of a power-generating plant in the country or the extension of an existing power plant.
Such an extension may consist of the acquisition of assets for the optimization, repotentiation and rehabilitation of pre-generation power plants In this case, only the
tax benefit, if it is possible to identify and verify, that with the new investment realized the additional generation of electrical energy has been achieved, therefore it will have to have the respective equipment or measurement mechanisms.
The SIGET shall verify that the measuring equipment to be installed or the measurement mechanisms identified by the data subject is sufficient to comply with the provisions of the preceding paragraph, time to evaluate the project certification request. In addition, it is empowered to exercise
verification and control activities with respect to such equipment or mechanisms after the qualification of the project.
The natural or legal persons who enjoy any of the exemptions granted by this Law, shall use accounting systems that permit the identification of income, costs and expenses related to the new investment subject to the tax benefits set forth in this Law. "
Art. 3.-Replace Art. 11, by the following:
" Art. 11. To make use of the benefits granted by this Law, the interested party must submit a written request to the SIGET, complying with the requirements required by the Law, its Regulations and other regulations issued by SIGET.
Within the fifteen working days following the submission of the application, the SIGET may request additional clarifications from the data subject, which must be delivered within the maximum period of fifteen
working days.
The SIGET must resolve the relevant within forty-five working days, numbered to
from the business day following the filing of the application or the submission of additional clarifications, as appropriate.
In case If there are grounds for refusing certification, the SIGET shall have the same time limit to issue a reasoned decision rejecting the request, which shall be notified to the person concerned, who may bring the appeal provided for in Article 17 of this Law.
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Art. 4.-Replace Art. 12 by the following.
" Art 12.-From obtaining the favorable certification as provided in the previous article, the interested party will apply for the tax benefits to the Ministry of Finance, which is based on the certification issued by SIGET that contains the technical opinion on the goods, inputs and services that enjoy
the tax incentives and in the verification that the holders of the investments do not have tax obligations In the case of the law, it will qualify for the benefits and tax incentives contained in this Law. Corresponding Executive Agreement, within a maximum period of forty-five days
working days, counted from the working day following that of the filing of the application, which shall be published by that Ministry in the Official Journal.
In case there are grounds for refusal to qualify, the Ministry of Finance will have the same time limit to issue a reasoned decision rejecting the request, which will be notified to the interested party. "
Transitional Provisions
Art. 5.-The tax benefits granted prior to these reforms shall remain valid, in the terms indicated in the respective Executive Agreements that provide them, in accordance with the provisions in force at the date of their issuance.
In the case of projects based on the use of renewable energy sources that have been awarded under free competition processes, prior to the date of entry into force of this Decree, and that at that date they have not submitted your application for the respective certification to
the SIGET, the provisions of the Tax Incentive Act for the Promotion of Renewable Energy in the Generation of Electricity, in force at the time of the award; except that the provisions of this Decree are more favourable to the interested party, who must indicate in your application,
whether you opt for the new legislation or the current regulation at the time the project was awarded to you.
Art. 6.-The reforms contained in this Decree, will apply for new investments in the terms defined by it to enjoy the incentives and benefits established by these reforms, the interested party will have to start the certification and qualification outlined in Articles 11
and 12 of the Law.
Art. 7.-This Decree shall enter into force eight days after its publication in the Official Journal
.
GIVEN IN THE BLUE HALL OF THE LEGISLATIVE PALACE: San Salvador, at the fifteenth day of the month
October two thousand fifteen.
LORENA GUADALUPE PEÑA MENDOZA,
PRESIDENT.
GUILLERMO ANTONIO GALLEGOS NAVARRETE, ANA VILMA ALMASEZ DE ESCOBAR, FIRST VICE PRESIDENT. SECOND VICE-PRESIDENT.
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JOSÉ SERAFIN ORANTES RODRÍGUEZ, NORMAN NOEL QUIJANO GONZÁLEZ,
THIRD VICE-PRESIDENT. FOURTH VICE-PRESIDENT.
SANTIAGO FLORES ALFARO,
FIFTH VICE PRESIDENT.
GUILLERMO FRANCISCO MATA BENNETT, DAVID ERNESTO REYES MOLINA,
FIRST SECRETARY. SECOND SECRETARY.
MARIO ALBERTO TENORIO GUERRERO, REYNALDO ANTONIO LÓPEZ CARDOZA,
THIRD SECRETARY. FOURTH SECRETARY.
JACKELINE NOEMI RIVERA AVALOS, JORGE ALBERTO ESCOBAR BERNAL,
FIFTH SECRETARY. SIXTH SECRETARY.
ABILIO ORESTES RODRÍGUEZ MENJÍVAR, JOSÉ FRANCISCO MERINO LÓPEZ, SEVENTH SECRETARY. EIGHTH SECRETARY.
CASA PRESIDENTIAL: San Salvador, at the twenty-eight days of October of the year two thousand
fifteen.
PUBESQUIESE,
Salvador Sánchez Cerén, President of the Republic.
Tharsis Salomon López Guzmán, Minister of Economy.
D. O. N ° 200 Tomo N ° 409
Date: October 30, 2015
FN/pch 30-11-2015
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