Agreement 551-2018

PURPOSE.- To regulate the provisions contained in Decree No. 181-2012, containing the Law for the Rationalization of the Exemption of Fuels for the Generation of Electrical Energy published in the Official Gazette La Gaceta on December 4, 2012.

SCOPE OF APPLICATION.- The norms contained in this Regulation are applicable in the National Territory for all Natural or Legal Persons that engage in the production, transformation, refinement or importation of fuels for the generation of electrical energy.

DEFINITIONS.- For purposes of the application of this Regulation, the following terms are defined: 1. ACPV: Refers to the tax denomination Contribution for the Care of Social Programs and Conservation of Road Heritage (ACPV), created by Decree No. 131-98 containing the Law of Stimulus to Production, Competitiveness and Support for Human Development and its amendments. 2. CUSTOMS: The Administrative Services responsible for the application of customs legislation and the collection of taxes on imports and exports and that are also charged with the application of other laws and regulations relating, among others, to the importation, transit and exportation of merchandise. 3. CUSTOMS AUTHORITY: The official of the Customs Service who, by reason of his office and by virtue of the competence granted, verifies the correct application of customs norms, complies with them and ensures compliance. 4. CAUCA: Central American Uniform Customs Code. 5. CUSTOMS WAREHOUSE: The temporary storage of merchandise under the control of the Customs Service in premises or in enclosed or unenclosed places, adapted for such purpose awaiting the presentation of the corresponding merchandise declaration. 6. MERCHANDISE DECLARATION: An act carried out in the form prescribed by the Customs Service by which interested parties freely and voluntarily express the regime to which the merchandise is subject and accept the obligations that it imposes. 7. ENEE: The National Enterprise of Electrical Energy. 8. LAW: Law for the Rationalization of the Exemption of Fuels for the Generation of Electrical Energy. 9. CUSTOMS OBLIGATIONS: Legal relationships established by Law between the State and the Tax Obligor, which may be derived into formal or material obligations, material obligations being those that entail the realization of a payment or accessory obligations that have as their object a provision of economic content, the remainder of obligations being considered as formal. 10. SEFIN: Secretariat of State in the Office of Finance.

OBLIGATED SUBJECTS. Natural and Legal Persons that engage in the production, transformation, refinement or importation of fuels are obligated to pay the tax called Contribution for the Care of Social Programs and Conservation of Road Heritage.

FUELS SUBJECT TO PAYMENT OF THE TAX: The fuels subject to payment of ACPV are those destined for the Generation of Electrical Energy such as Bunker "C", Diesel and Natural Gas; as well as Super Gasoline, Regular Gasoline, kerosene, LPG and AV-JET.

GENERATING EVENT OF THE ACPV. For these purposes it shall be understood as the actual act that gives rise to the birth of the tax obligation, the first stage of commercialization of petroleum derivative fuels, whether upon delivery, use or withdrawal of the same, or on the date the respective invoice or equivalent document is issued, whichever occurs first. In the case of electrical energy generating companies with Bunker "C", Diesel and Natural Gas, the generating event occurs at the moment of acceptance of the Merchandise Declaration in the regime of definitive importation and its modalities. In case of change from temporary or suspensive regime to a definitive one, the provisions of paragraph 1 of Article 46 of CAUCA shall apply.

FORMS AND MOMENTS OF PAYMENT OF THE TAX.- Electrical energy generating companies with Bunker "C" and Diesel that introduce fuel through land borders must nationalize it immediately, registering the merchandise declaration and paying the tax called ACPV in cash, remitting the respective payment through authorized collection offices. In the case that electrical energy generating companies with Bunker "C" and Diesel make local fuel purchases from customs warehouses or withdrawals thereof, they may pay the tax called ACPV in cash, bonds issued by the State and in the possession of electrical energy generating companies. For purposes of the settlement of bonds issued by the State and in the possession of electrical energy generating companies, proceedings shall be in accordance with what is provided in Article 11 of this Regulation, until the maximum payment period of 45 business days has elapsed, counted from the date of acceptance of the DUA or equivalent customs document for the full or partial amount of ACPV.

TREATMENT OF PAYMENT MADE BY ELECTRICAL ENERGY GENERATING COMPANIES. The resources remitted to the General Treasury of the Republic must be credited to the account of the Trust provided for in Article 13 of this Regulation. When electrical energy generating companies make payment through bonds issued by the State and in their possession, the provisions of Article 11 of this Regulation shall apply. The Customs Administration is responsible for the receipt and custody of guarantees, bonds or promissory notes used as a means of payment, until the moment of their execution or return, as appropriate. In no case shall the expiration date of the guarantee, bond or promissory note be less than twelve (12) months.

EXECUTION OF GUARANTEES, BONDS OR PROMISSORY NOTES. The execution of guarantees, bonds or promissory notes shall be carried out, where applicable, by the Customs Administration responsible for their receipt and custody, within a maximum period of forty-five (45) business days, counted from the date of acceptance of the respective Merchandise Declaration, the date on which the customs tax obligation is born in accordance with what is established in Article 46 of the Central American Uniform Customs Code. When the execution of a promissory note exceeds the time stipulated in the preceding paragraph and as long as it is not made effective, it shall be considered that the electrical energy generating company is not solvent with the State.

RESPONSIBILITY OF THE NATIONAL ELECTRICAL ENERGY ENTERPRISE (ENEE). ENEE, as the receiving entity of electrical energy supplied by electrical energy generating companies, shall be responsible for certifying to the Customs Administration, upon request made by said companies, within a maximum period of forty (40) business days counted from the Acceptance of the Merchandise Declaration, or from the date of issuance of the respective invoice, the quantities of fuels imported or purchased locally that have been consumed in the generation of electrical energy, so that the respective Customs Administration carries out what is described in the preceding Article or returns the guarantee, bond or promissory note. Such certification must comply with the minimum requirements necessary to prove its validity and legality before future inspection or claim actions, such certification being considered an undisputed document.

CERTIFICATIONS LOWER THAN THE QUANTITY OF FUEL CONSIGNED IN THE MERCHANDISE DECLARATION.- When ENEE certifies that quantities of gallons lower than those consigned in the Merchandise Declaration have been destined for the generation of electrical energy, the corresponding Customs Administration shall make effective before the competent entity the guarantees, bonds or promissory notes for the non-consumed differential, or failing that the electrical energy generating company shall make the payment in cash or in bonds issued by the State and in their possession, returning in this case the respective security. Notwithstanding, when payment is made with State bonds, the Customs Administration shall issue the respective settlement bulletin, so that the electrical energy generating company may present itself to the General Directorate of Public Credit (DGCP) of the Secretariat of State in the Office of Finance to carry out the corresponding procedures for the valuation and recording of the Bond issued by the State, in accordance with the Procedure that for these purposes the Secretariat of State in the Office of Finance shall issue. Once the actions relating to the valuation and recording of the Bond issued by the State have been executed, the DGCP of SEFIN shall remit to the Central Bank of Honduras (BCH) the authorization for it to carry out the corresponding operational procedures, with the BCH proceeding to seal the settlement bulletin and to transfer the value consigned therein to the trust mentioned in Article 13 of this Regulation.

REMOTE INTERROGATION SYSTEM.- The National Enterprise of Electrical Energy is instructed in coordination with the Secretariat of State in the Office of Finance to proceed with the execution of agreements with electrical energy generating companies for the management, design and installation of a Remote Interrogation System that allows, on a daily basis, from the offices of ENEE that is responsible for Certification, to proceed with the remote reading of the fuel measurement system associated with the consumption used for the generation of electrical energy. Said system must be implemented within a maximum period of six (6) months counted from the publication of this Regulation in the Official Gazette La Gaceta.

TRUST.- In accordance with what is established in Article 2 of Decree No. 181-2012 of December 4, 2012, containing the Law for the Rationalization of the Exemption of Fuels for the Generation of Electrical Energy, authorization was granted by the National Congress to the Secretariat of State in the Office of Finance to constitute a TRUST in the Central Bank of Honduras, to deposit the resources generated as a result of ACPV paid by electrical energy generating companies, in cash, bonds issued by the State and in their possession and those derived from the execution of guarantees, bonds or promissory notes carried out by the respective Customs Administration. It is the responsibility of the Central Bank of Honduras (BCH) to receive and keep in custody the cash.

DESTINATION OF TRUST RESOURCES. The resources generated as a result of ACPV paid by electrical energy generating companies shall be used to effect the return of said tax to the Electrical Energy Generating Companies, upon certification by the National Electrical Energy Enterprise (ENEE), regarding the fuels (Bunker "C", Diesel) that have been used in the generation of electrical energy. Upon conclusion of the corresponding fiscal year, the surpluses generated from the Trust by the final settlements made must be remitted to the General Treasury of the Republic.

RETURN OF THE TAX.- The request for return of ACPV paid must be made to the Customs Administration, which must proceed in accordance with what is established in the Tax Code and in any case must request from ENEE the certification of the fuel that was used in the generation of electrical energy supplied by electrical energy generating companies to ENEE. The authorizing resolution for the return of ACPV issued by the Customs Administration must be notified to the Secretariat of State in the Office of Finance in accordance with what is established in Article 115 of the Tax Code, which must make the return in cash when it comes from the execution of guarantees, bonds or promissory notes or in credit notes when it comes from the recording of Bonds issued by the State.

OVERSIGHT.- It is the responsibility of the Customs Administration to exercise control, oversight, and collection of the Contribution for the Care of Social Programs and Conservation of Road Heritage, in accordance with the Law and this Regulation.

SANCTIONS.- Natural or legal persons, including electric energy generating companies with Bunker "C", Diesel, and natural gas, that fail to comply with the obligations established in the Law on Rationalization of Fuel Exemptions for Electric Energy Generation and this Regulation shall be sanctioned in accordance with the current legal framework. TITLE VIII FINAL PROVISIONS

8 - REFUND OF THE ACPV PAID PRIOR TO THE PUBLICATION OF THIS REGULATION.- Electric energy generating companies that have paid the ACPV prior to the approval of this Regulation until the date of entry into force of the Trust may request the respective refund with the Customs Administration, which must proceed in accordance with what is established in the Tax Code and the consumption certification issued by ENEE. Likewise, electric energy generating companies that prior to the approval of this Regulation until the date of entry into force of the Trust have pending payment settlements for the tax known as ACPV must proceed to pay the outstanding tax, and may request the respective refund with the Customs Administration, which must proceed in accordance with what is established in the Tax Code and the consumption certification issued by ENEE.

9 - PROCEDURE FOR NATURALIZATION AND COMMERCIALIZATION OF FUELS.- The Customs Administration is hereby instructed to proceed, within a maximum period of sixty (60) calendar days from the publication of this Regulation, with the preparation, approval, and publication of a General Agreement containing the Procedure for Naturalization and Commercialization of fuels in accordance with the legal customs provisions, the Law on Rationalization of Fuel Exemptions for Electric Energy Generation, and this Regulation.

PROCEDURE FOR THE ACCEPTANCE OF BONDS ISSUED BY THE STATE AS A MEANS OF PAYMENT OF THE TAX.- The Ministry of State in the Office of Finance is authorized to proceed, within a maximum period of 30 business days, with the preparation, approval, and publication of a Ministerial Agreement containing the Procedure for the Acceptance of Bonds Issued by the State and the authority of Private Electric Energy Generating Companies with Fuels, as a means of payment of the ACPV.

REPEAL.- The legal provisions contained in Agreement Number 005-2003 of June 6, 2003, published in the Official Gazette La Gaceta dated August 20, 2003, containing the Regulation for the Refund of Consumption Taxes on Fuels Used in the Generation of Electric Energy under the provisions established in Article 26 of the Tax Equity Law contained in Decree No. 51-2003, are hereby repealed.

EFFECTIVE DATE.- This Regulation shall enter into force on the day of its publication in the Official Gazette "La Gaceta". LET IT BE COMMUNICATED AND PUBLISHED, MARTHA VICENTA DOBLADO ANDARA Undersecretary of General Coordination of Government by delegation of the President of the Republic Executive Agreement Number 023-2018 published in the Official Gazette "La Gaceta" on April 20, 2018 ROCÍO IZABEL TÁBORA MORALES Secretary of State in the Office of Finance