Norm for the Application of Article 87, Item 1) of Law No. 822, Tax Coordination Law, with its Reforms and Additions

Page 1 of 2 Resolution No. CD-SIBOIF-1102-1-MAR19-2019 Dated March 19, 2019

NORM FOR THE APPLICATION OF ARTICLE 87, ITEM 1) OF LAW NO. 822, TAX COORDINATION LAW, WITH ITS REFORMS AND ADDITIONS

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I

That Article 87, item 1) of Law No. 822, Tax Coordination Law, published in La Gaceta, Official Gazette No. 241, of December 17, 2012; reformed and added to by Law No. 987, Law of Reforms and Additions to Law No. 822, Tax Coordination Law, published in La Gaceta, Official Gazette No. 41, of February 28, 2019; establishes that, "...The income tax rate payable on capital income and capital gains and losses is: 1. Ten percent (10%), for income generated by financing granted by international banks with investment grade, according to the regulation on the matter defined by SIBOIF...".

II

That for the purposes of applying the aforementioned article, it is necessary for the Superintendence of Banks and Other Financial Institutions to determine which international banks hold an investment-grade rating.

In exercise of its powers;

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-1102-1-MAR19-2019 NORM FOR THE APPLICATION OF ARTICLE 87, ITEM 1) OF LAW NO. 822, TAX COORDINATION LAW, WITH ITS REFORMS AND ADDITIONS

CHAPTER I CONCEPTS, OBJECT, AND SCOPE

Article 1. Concepts.- For the purposes of applying the provisions contained in this norm, the terms indicated in this article, whether in uppercase or lowercase, singular or plural, shall have the following meanings:

Investment-grade rating: First-order risk rating issued by a credit rating agency, according to the nomenclature used by the respective agency.

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Tax Coordination Law: Law No. 822, Tax Coordination Law, published in the Official Gazette No. 241, of December 17, 2012, with its reforms and additions.

Superintendence: Superintendence of Banks and Other Financial Institutions.

Superintendent: Superintendent of Banks and Other Financial Institutions.

Article 2. Object and Scope.- This norm aims to determine which international banks hold an investment-grade rating, for the purposes of applying what is established in Article 87, item 1) of the Tax Coordination Law.

CHAPTER II INTERNATIONAL BANKS WITH INVESTMENT GRADE

Article 3. Publication of list.- For the purposes of applying what is established in Article 87, item 1) of the Tax Coordination Law, the Superintendence will publish on its website a list of international banks with investment-grade rating, which will be updated annually. Borrowers of loans, whose banks are not included in the aforementioned list, may request the Superintendent to include them, by presenting the information that accredits that the bank holds the required investment-grade rating and the rating agency that assigned it.

Article 4. Notification.- The Superintendent will notify the competent tax authorities of the list of banks referred to in the previous article, as well as any updates to it.

CHAPTER III FINAL PROVISION

Article 5. Repeal.- The "Norm for the Application of Article 87, Item 3) of Law No. 822, Tax Coordination Law," contained in Resolution No. CD-SIBOIF-884-1-ABR7-2015, published in La Gaceta, Official Gazette No. 88, of May 14, 2015, is hereby repealed.

Article 6. Effectiveness.- This Norm shall enter into effect from its publication on the website of the Superintendence, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (F) S. Rosales C. (F) M. Díaz O. (F) Fausto Reyes B. (F) Illegible (Silvio Moisés Casco Marenco) (F) Illegible (Rafael Ángel Avellán Rivas).

RAFAEL ÁNGEL AVELLÁN RIVAS Secretary of the Board of Directors SIBOIF