Agreement 227-2020

PURPOSE. This Technical Tax Customs Instructive has the purpose of developing the provisions contained in Legislative Decree No. 29-2020 dated March 12, 2020 related to the Non-Subject Status in the payment of "Sales Tax" and "Production and Consumption Tax" to natural and legal persons in local purchases and imports of raw materials, packaging material and containers, necessary for the manufacture of sanitizing products and medications to address the health emergency and combat the effects of the probable risk of coronavirus infection.

SCOPE OF APPLICATION. The rules contained in this instructive are of public order, mandatory observance and applicable throughout the national territory for all those acts, facts and situations regulated in Legislative Decree No. 29-2020 dated March 12, 2020.

DEFINITIONS. For the application of the Non-Subject Status criterion for the payment of "Sales Tax" and "Production and Consumption Tax" established in Decree 29-2020, the following terms are defined: 1. NON-SUBJECT STATUS CRITERION: It occurs when the act performed by the taxpayer is not included in the legal premise that gives rise to the tax and customs obligation. 2. PACKAGING AND CONTAINERS: A product container, designed and produced to protect and/or preserve it adequately during its transport, storage and delivery to the consumer or client. 3. STATE: The Centralized and Decentralized Institutions that comprise the Public Administration of Honduras, with administrative functions and public powers that the State grants them within the scope of their competencies. 4. HAND GEL: Antibacterial gel used for hand disinfection, consisting of an alcoholized gel at seventy percent (70%). 5. RAW MATERIAL: Natural or artificial substance that is industrially transformed to produce products that will become consumer goods or final products. 6. MEDICATIONS: Simple or compound substance, natural, synthetic, or mixture thereof, with defined pharmaceutical form, used to diagnose, treat, prevent diseases or modify a physiological function of human beings. 7. SANITIZING PRODUCT: Substances that reduce the number of microorganisms to a safe level. SECOND TITLE CHAPTER I PROVISIONS APPLICABLE TO IMPORTS AND LOCAL PURCHASES

REQUIREMENTS IN IMPORTS. In the imports of goods not subject to the payment of "Sales Tax" and "Production and Consumption Tax", natural or legal persons and State Institutions must present: a) Documentation in accordance with current customs legislation; and, b) Authorization document for import, issued by the Health Regulatory Agency (ARSA).

REQUIREMENTS IN LOCAL PURCHASES. In local purchases of goods not subject to the payment of "Sales Tax" and "Production and Consumption Tax", natural and legal persons must prove to be duly authorized by the Health Regulatory Agency (ARSA). CHAPTER II ON THE APPLICATION OF THE NON-SUBJECT STATUS CRITERION

RAW MATERIAL AND INPUTS. For the application of the Non-Subject Status criterion of the payment of Sales Tax and Production and Consumption Tax in the import of raw materials and inputs for the preparation of sanitizing products, medications and containers, it should be used in accordance with the following:

PACKAGING AND CONTAINERS. The application of the Non-Subject Status criterion of the payment of Sales Tax in imports and local purchases of packaging and containers used to protect and adequately preserve during transport and storage, should be performed in accordance with the following:

CREATION OF PRECISION CODES. The Honduran Customs Administration is instructed to create the necessary precision codes in the Automated System of Honduran Customs Income (SARAH) for the application of what is established in this Agreement. CHAPTER III ON THE APPLICATION OF THE EXEMPTION

REGARDING THE EXEMPTION. In order to comply with the exemption established in the third paragraph of Article 1 of Decree No. 29-2020, all businesses that sell masks and hand gel to the general population throughout the national territory are instructed that at the time of sale they must place on the invoice manually, the resolution number DGCFA-ISV-00001-2020 which will be the supporting document for non-collection of Sales Tax. CHAPTER IV PROVISIONS APPLICABLE TO STATE INSTITUTIONS AND NON-PROFIT ASSOCIATIONS

EXCEPTION OF TAX SOLVENCY. The General Directorate for Control of Customs Franchises of the Secretariat of State in the Ministry of Finance is instructed to except from its requirements the "Certificate of Tax Solvency" for State Institutions and Non-Profit Associations in the customs franchise procedure, exemptions in local purchases, as well as donations in the concept of humanitarian aid in the area of health, education and food derived from the emergency established in the Directive Council of the National Risk System (SINAGER).

REQUIREMENTS. The State and Civil Associations, Non-Profit for the processing of Customs Franchises, exemptions in local purchases, as well as humanitarian aid in the area of health, education and food derived from the Emergency must comply, in addition to the usual requirements, with the following: a) Certificate issued by the Permanent Commission of Contingencies of Honduras (COPECO) that certifies that the institution is registered as a cooperating entity and is working in the prevention and fight against coronavirus. CHAPTER V ON THE DONATION AND SALE OF MEDICAL SUPPLIES AND EQUIPMENT BY COMPANIES COVERED UNDER THE DIFFERENT SPECIAL REGIMES

DONATIONS FROM SPECIAL REGIMES. The Customs Administration is instructed to issue expeditious technical criteria for processing donations to the public sector through the different Special Regimes of specific medical supplies and equipment to address the health emergency, and must comply with customs formalities.

FACILITATION. The Customs Administration must instruct the personnel located in the different customs offices of the country in order to facilitate the prompt dispatch of products for the prevention and fight against coronavirus.

EFFECTIVE DATE. This Agreement shall enter into force on the day of its publication in the Official Gazette "La Gaceta". LET IT BE COMMUNICATED AND PUBLISHED, ROCIO IZABEL TABORA MORALES Secretary of State in the Office of Finance MARTHA SUYAPA GUILLEN CARRASCO General Secretary, by Law Municipal Mayor's Office of the Central District THE UNDERSIGNED MUNICIPAL SECRETARY OF THE CENTRAL DISTRICT, CERTIFIES AGREEMENT No. 009 CONTAINED IN THE EXTRAORDINARY MINUTES No. 007 DATED MARCH TWELFTH OF THE YEAR TWO THOUSAND TWENTY, WHICH LITERALLY STATES: "AGREEMENT No. 009.- WHEREAS: One of the essential functions of the Municipal Government is to guarantee to the inhabitants of the municipality, the protection of their lives and their property and the exercise of the right to protection of health and security in accordance with the law. WHEREAS: That due to the arrival of the first two cases of the global pandemic of the COVID-19 virus, Coronavirus, to the Honduran national territory and specifically one of them to the municipal jurisdiction of the Central District, an extraordinary session has been held by the Municipal Corporation as the highest authority within the limits of its territorial entity. WHEREAS: That the Municipal Mayor issued on the eleventh (11) of March Administrative Agreement 046-2020 in the framework of the appearance of the first case in the Central District, in which he establishes a series of administrative measures of a preparatory nature to CERTIFICATION