On December 18th the secondary regulations for the Organic Productive Development Law, to attract investment, create jobs while providing fiscal stability and balance, were published, as  discussed in Progreso 16.

The regulation keeps to the inclusive spirit of the law it is supporting, specifying and clarifying how it is to be applied, in order to avoid contrasting interpretations and giving certainty to taxpayers who qualify for its benefits.

Some of the most important areas covered in the regulation are:

Amendments to sector-specific laws

There are numerous amendments to sector-based regulations. Among them are the Regulation on the application of the Domestic Tax Regime Law, the Regulation on the application of the foreign currency outflow tax (IDS), the Regulation on the Structure of Productive Development, and the Regulation on the application of the Single Taxpayers Register (RUC) Law.

Inward investment

• This defines the concept of "new investment", such that the location (city) where the investment is executed prevails over where the company has its headquarters.
• It allows domestic and foreign investments to be executed immediately, laying out in a simple manner the steps that should be followed in applying the law.

Tax exemption

• The system for redeeming value-added tax (IVA) and the currency outflow tax (ISD) have been optimized for exports.
• It automatically recognizes the incentive for income tax (IR) exemption for new companies, while in the case of pre-existing companies this exemption is conditional on the rate of their asset growth.
• ISD will be exempted on the dividends of companies reinvesting at least 50% of their profits back into their businesses

Environment

This sets out a simplified procedure for environmental licensing. To this end, it contains a new type of contract, such that activities with low environmental impact, provided they meet the prior requirements, will receive immediate approval, and those with medium and high impact will have to submit studies that demonstrate they are protecting their surroundings.

Others

• Procedures to follow in monitoring compliance with fiscal regulations, ensuring that social programs are permanent and protecting the most vulnerable.
• Simplifies and speeds up customs procedures, equality for craft enterprises, together with incentives and concessions for those who admit to having funds in tax havens.
• Regulates the Guarantee Funds for the Popular sharing Economy to move forward with promoting this sector