Agreement 567-2019

To regulate the provisions contained in Decree No. 131-2018, which contains the Law on Social Contribution of the Social and Solidarity Economy Sector, published in the Official Gazette, La Gaceta, on February 7, 2019.

The norms contained in this Regulation shall apply throughout the National Territory to all Legal Entities operating under the Law of the Social and Solidarity Economy Sector not included in Decrees Nos. 53-2015 dated April 29, 2015 and 92-2015 dated September 8, 2015.

For purposes of applying this Regulation, the following terms are defined: 1. CSSE: Social Contribution of the Social and Solidarity Economy Sector. 2. LAW: Law on Social Contribution of the Social and Solidarity Economy Sector. 3. SAR: Revenue Administration Service acting as the Tax Authority. 4. SOCIAL AND SOLIDARITY ECONOMY SECTOR: The set of enterprises and organizations formed by workers that maintain the primacy of labor, opt for social ownership of the means of production, and establish that the surplus generated is a means to raise the standard of living of their members. 5. SEFIN: State Secretariat in the Ministry of Finance. TITLE II OBLIGATED SUBJECTS, TAXABLE EVENT, FORMS AND TIMING OF PAYMENT OF THE SOCIAL CONTRIBUTION OF THE SOCIAL AND SOLIDARITY ECONOMY SECTOR

All Legal Entities operating under the Law of the Social and Solidarity Economy Sector not included in Decrees Nos. 53-2015 dated April 29, 2015 and 92-2015 dated September 8, 2015 and that are duly registered in the Qualified Registry of the Institute of Property (IP) created by Decree No. 46-2016 dated April 26, 2016, published in the Official Gazette, La Gaceta, on April 28, 2016, are obligated to pay the Social Contribution of the Social and Solidarity Economy Sector (CSSE).

FIFTEEN PERCENT (15%) of the net surpluses or net earnings generated in the prior fiscal period.

For these purposes, it shall be understood as the actual act that gives rise to the birth of the tax obligation: the net surpluses or net earnings generated in the prior fiscal period.

Net surpluses or net earnings result from the difference between total income minus expenses directly related to the generation of income and funds.

Total income shall comprise the total income received or accrued by Legal Entities operating under the Law of the Social and Solidarity Economy Sector not included in Decrees Nos. 53-2015 dated April 29, 2015 and 92-2015 dated September 8, 2015, excluding income received in the form of dividends or any other form of participation in the surpluses or earnings of another legal entity operating under Decrees Nos. 53-2015 and 92-2015.

Expenses directly related to the generation of income are those ordinary and necessary expenses that must be incurred and directly impact the production of net surpluses or net earnings and bear a proper proportion to the amount thereof.

Funds may only be deductible when directly related to:

• 1)

  Capitalizations;

• 2)

  Reserve for cases of losses or legal reserves;

• 3)

  Housing, Education and Health;

• 4)

  Social welfare and training; and, 5. Donations duly documented, in accordance with the Invoicing Regime.

Settlement and payment of the CSSE must be made no later than within three (3) months following the close of the prior fiscal period in the forms and conditions established by the Revenue Administration Service. Legal Entities operating under the Law of the Social and Solidarity Economy Sector not included in Decrees Nos. 53-2015 dated April 29, 2015 and 92-2015 dated September 8, 2015, that do not comply with the payment obligation described in the preceding paragraph, shall be subject to the sanctions established in the current Tax Code. TITLE III AUDIT AND SANCTIONS

It is the responsibility of the Tax Authority to exercise control, audit, and collection of the CSSE, in accordance with the Law and this Regulation.

The obligated subjects set forth in Article 4 of this Regulation must comply with the following obligations: 1. Comply with the formal and material obligations derived from performing the function of withholding agent for any tax in accordance with the legal framework governing the tax and customs system. 2. Comply with the obligations established in the Law and this Regulation. Obligated subjects shall not be subject to the payment of Income Tax, including advance payments, withholdings or anticipated payments for income that gives rise to net surpluses or net earnings that constitute the tax base of the CSSE.

Legal Entities operating under the Law of the Social and Solidarity Economy Sector not included in Decrees Nos. 53-2015 dated April 29, 2015 and 92-2015 dated September 8, 2015, that fail to comply with the obligations established in the Law and this Regulation, shall be sanctioned in accordance with the Current Tax Code. TITLE IV FINAL PROVISIONS

Advance payments of Income Tax for the fiscal period made by Legal Entities operating under the Law of the Social and Solidarity Economy Sector not included in Decrees Nos. 53-2015 dated April 29, 2015 and 92-2015 dated September 8, 2015, may request the refund or credit notes of favorable balances from the 2019 period for payments to which they were not obligated. The foregoing rule is also applicable to withholdings and anticipated payments in the matter of Income Tax.

ADDITIONAL PROVISIONS. The Secretariat of State in the Office of Finance, in coordination with the Tax Administration, shall regulate by Agreement all matters not provided for in this Regulation.

EFFECTIVE DATE. This Regulation shall enter into force on the day of its publication in the Official Journal "La Gaceta". COMMUNICATED AND PUBLISHED, MARTHA VICENTA DOBLADO ANDARA Undersecretary of General Government Coordination by delegation of the President of the Republic Executive Agreement Number 023-2018, published in the Official Journal "La Gaceta" on April 4 of 2018. ROCÍO IZABEL TÁBORA MORALES Secretary of State in the Office of Finance