Agreement 382-2021
Congreso Nacional
- Decree: 382-2021
- Published: August 12, 2021
- Issuing body: Congreso Nacional
- Gazette: 35,685
- Category: Financial & Tax
Summary
This agreement establishes the rules for electricity companies to be exempt from the Sales Tax on services such as electricity transportation, transmission, distribution, and system operation. It benefits the national electricity sector by making these essential services more affordable, and requires companies to properly invoice and report these tax-exempt services to the government.
Considerations
Whereas Article 247 of the Constitution of the Republic establishes that the Secretaries of State are collaborators of the President of the Republic in the guidance, coordination, direction and supervision of the organs and entities of the National Public Administration in their area of competence.
Whereas the Constitution of the Republic in Article 351 establishes that the tax system shall be governed by the principles of legality, proportionality, generality and equity, in accordance with the economic capacity of the taxpayer.
Whereas through Legislative Decree No. 100-2020 published in the Official Gazette La Gaceta on February 22, 2021, the National Congress of the Republic exempts companies in the electricity subsector from the payment of the Tax called Contribution for the Attention to Social Programs and Conservation of Road Patrimony (ACPV), created through Decree No. 131-98 dated April 30, 1998 and its amendments, associated with fossil fuels used by their electricity generation plants that are sold in the National Electricity Market as established by the General Law of the Electrical Industry, its Regulations and Normatives.
Whereas Article 3 of Legislative Decree No. 100-2020 refers to Electrical Services, establishing the following: "Are exempt from the payment of the Sales Tax the transportation of electricity and the services required for the maintenance of quality, reliability and safety of the electrical service, as well as the services provided by the Association Operator of the National Electrical System (ODS), in the exercise of system operation, the Administration of the Wholesale Electricity Market of Honduras when such services do not generate profit, for which the Secretary of State in the Office of Finance is instructed to coordinate with the Secretary of Energy (SEN), the Electrical Energy Regulatory Commission (CREE) and the Customs Administration to prepare the technical tax-customs instruction that determines the services referred to in this article in accordance with the regulation of the electricity market, for the correct application of the benefit".
Whereas through Legislative Decree No. 404-2013 published in the Official Gazette "La Gaceta", dated twenty (20) May 2014, the General Law of the Electrical Industry was approved, which has as its object to regulate the activities of generation, transmission, distribution and commercialization of electricity in the national territory, the importation and exportation of electrical energy and the operation of the national electrical system.
Whereas it is the obligation of the State to ensure that in the different procedures that the public administration knows, at the request of private parties, the principles of economy, expedience and efficiency are applied, in order to achieve prompt and effective satisfaction of the same.
Whereas in accordance with numeral 15 of Article 29 of the Public Administration Law and its Amendments, the Secretary of State in the Office of Finance is competent for everything concerning the formulation, coordination, execution and evaluation of policies related to Public Finance.
Whereas in accordance with Article 60 of the Regulation of Organization, Functioning and Competence of the Executive Branch contained in Executive Decree PCM-008-97, amended by Decree PCM-35-2015, published in the Official Gazette La Gaceta on June 26, 2015, the Secretary of State in the Office of Finance is competent through the General Directorate of Tax Policy to collaborate in the definition, monitoring and evaluation of tax policy for decision-making by superior authorities in order to achieve a sustainable fiscal policy for the benefit of Honduran society.
Articles
PURPOSE: The purpose of this Technical Tax Instruction is to develop the provisions contained in Article 3 of Legislative Decree No. 100-2020 published on February 22, 2021, related to electrical services in accordance with the regulation of the electrical market, for the correct application of the tax benefit.
SCOPE OF APPLICATION: The norms contained in this instruction are of public order, mandatory compliance, and applicable throughout the national territory for all acts, facts, and situations regulated in Article 3 of Legislative Decree No. 100-2020 dated February 22, 2021.
TERMS AND DEFINITIONS: The terms used in this instruction shall be understood according to their definition and use in the General Law of the Electrical Industry, its regulations and technical standards derived therefrom, and the Framework Treaty of the Regional Electrical Market and the regulations derived therefrom. Additionally, for purposes of the application of this instruction, the following concepts are defined: 1. Electrical Energy Regulatory Commission (CREE): is the entity created by Article 3 of the General Law of the Electrical Industry. 2. Regional Electrical Interconnection Commission (CRIE): is the regulatory and normative body of the Regional Electrical Market, with its own legal personality, capacity for public international law, economic independence, functional independence and technical specialization, which shall perform its functions with impartiality and transparency; Article 19 of the Framework Treaty of the Electrical Market of Central America. 3. Regional Operating Entity (EOR): is the entity responsible for the dispatch and energy exchanges between countries, in its capacity as market administrator. The EOR is headquartered in San Salvador, El Salvador. 4. National Electrical Market (MEN): It is the set of buying and selling transactions of electricity administered by the System Operator. 5. Regional Electrical Market (MER): In accordance with the Framework Treaty of the Electrical Market of Central America, it is the permanent activity of commercial electricity transactions, derived from an energy dispatch with regional economic criteria and through medium and long-term contracts between authorized agents. 6. System Operator (ODS): It is the Non-profit Civil Association called Association System Operator of the National Electrical System, with legal status granted by Resolution No. 1250-2016 dated the eighth (8) day of November of the year two thousand sixteen (2016), issued by the Secretariat of State in the Offices of Human Rights, Justice, Governance and Decentralization and which has the powers and functions of the System Operator in accordance with the General Law of the Electrical Industry. 7. Regional Regulation: Composed of the Framework Treaty of the Electrical Market of Central America, its Protocols, the Regional Electrical Market Regulation and other approved regulations and other resolutions issued by the CRIE. CHAPTER II OF THE ELECTRICAL TRANSPORT SERVICES, TRANSMISSION, DISTRIBUTION AND COMPLEMENTARY
ENJOYMENT OF BENEFIT: The exemptions contained in Article 3 of Legislative Decree No. 100-2020 shall not be subject to authorizing administrative procedures.
ELECTRICAL TRANSPORT SERVICES: are the services for transporting electricity provided by distribution companies and transmission companies in accordance with the provisions of the General Law of the Electrical Industry and its regulations and the Regional Regulation.
TRANSMISSION SERVICES: Transmission services are the electrical transport services provided by national or regional Transmission Companies, using assets of the transmission network at voltages equal to or greater than sixty thousand volts. These services are defined by the General Law of the Electrical Industry and its regulations and by Regional Regulation: 1. Transmission Toll. 2. Variable Income from Transmission. 3. Charges for Use of the Secondary Transmission System. 4. Variable Transmission Charge (CVT). 5. Transmission Toll. 6. Income from Sale of Transmission Rights (IVDT). 7. Monthly Compensation of the MER (CMM). 8. Complementary Transmission Charge (CC). The above list is indicative, so the ODS must include the charges to cover the cost of transmission services under the concept of "Transmission Services" in the Commercial Transactions Report. Regional transmission services are those provided by transmission companies under the concept of "Transmission Services" contained in the Regional Economic Transactions Document (DTER) issued by the EOR in compliance with what is established in Regional Regulation.
DISTRIBUTION SERVICE: The distribution service is the electrical transport service provided by distribution companies, its cost shall be integrated in the tariff of the final users of the distribution company and may also be charged separately to Qualified Consumers or Traders as established by the regulations issued by the CREE. The settlement of the cost of the electrical transport service provided by distribution companies to Qualified Consumers and Traders shall be included as "Distribution Service" in the Commercial Transactions Report (ITC).
COMPLEMENTARY SERVICES: Services required for the operation of the electrical system in conditions of quality, safety, reliability and lower economic cost, which shall be managed by the System Operator in accordance with what is established in the standard issued by the CREE: 1. Primary Frequency Regulation (RPF). 2. Secondary Frequency Regulation (RSF or "AGC Charges"). 3. Tertiary Frequency Regulation (RTF). 4. Spinning Reserve. 5. Cold Reserve. 6. Voltage Control. 7. Supply of Reactive Power. 8. Black Start. 9. Deviations by Control Area.
SERVICES FOR SYSTEM OPERATION AND ADMINISTRATION OF THE WHOLESALE ELECTRICITY MARKET: Are the services provided by the ODS to comply with the functions assigned to it through the legal, regulatory, and normative framework currently applicable to the electrical sector, as well as in its bylaws; which are required to guarantee the continuity and security of the electrical supply and the correct coordination of the generation and transmission system at minimum cost. In accordance with the purpose for which the ODS was created, in accordance with what is established in Article 9 of the General Law of the Electrical Industry (LGIE) contained in Legislative Decree No. 404-2013 published in the Official Gazette "La Gaceta" dated the twentieth (20) day of May of 2014; its annual operating budget constitutes an audited cost center for the development of its functions; consequently, the fiscal documents issued for the collection of the services indicated in this article shall not contain the description of the activities carried out. The cost of these services is incorporated in the tariffs of final users served by distribution companies and may also be charged separately to other agents of the MEN. The ODS shall include the charges to agents to cover the "Costs of System Operation and Wholesale Market Administration" in the Transactions Report and the billing instructions it issues monthly, indicating their status as a charge exempt from the Sales Tax. CHAPTER III OF SETTLEMENT AND BILLING
SETTLEMENT AND BILLING: The ODS shall issue monthly a document called the Commercial Transactions Report (ITC), containing the settlements resulting from transactions carried out in both the MEN and the MER. The exemption of the Sales Tax for "Complementary Services" defined according to national regulation shall require that these be invoiced following the billing instructions issued by the ODS based on the ITC it issues monthly in accordance with the Technical Settlements Standard. In said report, the "Complementary Services" mentioned in this article shall be included. In the case of "Complementary Services" provided in accordance with Regional Regulation and the Regulation of the Framework Treaty of the Regional Electrical Market, these shall be invoiced according to the instructions contained in the Regional Economic Transactions Document issued by the EOR in accordance with Regional Regulation. CHAPTER IV FINAL PROVISIONS
EFFECTS OF EXEMPTION: The tax or customs exemption does not exempt the obligated taxpayer from the duties to present declarations, withhold taxes where applicable, and other duties contained in the Tax Code.
UPDATE OF THE INSTRUCTION: The Secretariat of State in the Office of Finances (SEFIN) in coordination with the Secretariat of State in the Office of Energy (SEN) and the Electrical Energy Regulatory Commission (CREE), in compliance with Legislative Decree No. 100-2020, must make the changes, modifications, and/or updates to this Instruction that are necessary for its efficient application.
REPEAL: The legal provisions contained in Agreement No. 551-2018, published in the Official Gazette La Gaceta dated August 22, 2018, are hereby repealed.
EFFECTIVE DATE: This Agreement shall enter into force as of the date of its publication in the Official Gazette "La Gaceta". LET IT BE COMMUNICATED AND PUBLISHED, LUIS FERNANDO MATA ECHEVERRI SECRETARIAT OF STATE FANNY LUCÍA MARADIAGA VALLECILLO GENERAL SECRETARIAT
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