Environment

Incentive Law for the Import and Use of Electric and Hybrid Means of Transportation.

On September 24, 2020, the Legislative Assembly approved Legislative Decree number 738, enacting the Incentives Law for the Importation and Use of Electric and Hybrid Means of Transportation. The purpose of this law is to promote the use of electric and hybrid vehicles in the country through the establishment of tax and economic incentives to enhance sustainable mobility and promote environmental protection.

Economic and tax benefits:

  • The economic and tax benefits established in this law will apply to electric and hybrid motor vehicles regulated by the Land Transport, Traffic and Road Safety Law and the Special Law for Cargo Transport by Road, as well as bicycles and other pedal-powered transportation assisted by electric engines.
  • Total tax exemption of customs duties on the import of the aforementioned vehicles.
  • Exemption from the payment of VAT on the importation of the aforementioned motor vehicles and pedal-powered transportation assisted by an electric motor.
  • Reduction of the Special Tax on the First Registration of Vehicles in the National Territory of the aforementioned motor vehicles as follows: (i) 100% for new electric motor vehicles and hybrid motor vehicles, whether pluggable or not; (ii) 25% for used electric motor vehicles and hybrid motor vehicles, whether pluggable or not.
  • The exemptions will be valid for 10 years from the entry into force of this law.

Tax exemption on charging station services: Revenues obtained from the provision of electric charging services at authorized charging centers will enjoy total exemption from the payment of Income Tax for 5 years.

Entry into force: This law will enter into force eight days after its publication in the Official Gazette. This decree has not been published in the Official Gazette and it may be subject to further amendments.

Electricity

SIGET approved the Charges for Connection and Reconnection of End-users to Distribution Networks

The Superintendency of Electricity and Telecommunications (SIGET) approved the charges for connection and reconnection of end-users to distribution networks, and all costs associated with such activities such as the service assessment, inspection, budget preparation, and approval of plans to be applied by all electricity distribution companies operating in the country.

These charges will enter into force on October 1, 2020, provided that they are published in the Official Gazette and may be updated as per the provisions of the Methodology for Determining Charges for Connection and Reconnection to Low and Medium Distribution Networks Tension.

(Official Gazette number 198 published on October 02, 2020; reference number 197-E-2020)

Telecommunication  

Temporary law for the Adjustment of the Payment of the Annual Rate Established in Article 116 of the Telecommunications Law Due to the COVID-19 Crisis.

On October 22, the Legislative Assembly approved decree number 756 enacting the Temporary law for the Adjustment of the Payment of the Annual Rate Established in Article 116 of the Telecommunications Law Due to the COVID-19 Crisis. The law grants during 2020 a discount on the payment of the rate established in article 116 of the Telecommunications Law. Such a rate is paid annually to the SIGET by holders of enabling qualifications as consideration for the use of the radioelectric spectrum for Sonoran Broadcasting and Television services.

For 2020, the amount to be paid will be subject to a 90% discount of the normal rate Therefore, the 10% payment of the annual rate initially scheduled for October 2020 has been postponed and will be paid in April 2021, without generating interests, arrears or fines.

The entities that have requested the payment of quarterly installments and also canceled the first installment before the entry into force of this decree will be exempted from the subsequent installment payments. The amount exonerated will be deemed as the percentage of discount granted for the year 2020.

This decree will enter into force upon publication in the Official Gazette.

This decree has not been published in the Official Gazette and may be subject to further changes.

Pension System

Amendment to the Law of the Savings System for Pensions.

The Legislative Assembly approved Legislative Decree number 739, which amends articles 126 and 126-C of the Law of the Pension Savings System.

The amendment sets forth two cases in which affiliates may request a refund of their individual pension savings account balance:

  1. Non-pensioned Salvadorans residing in a foreign country, regardless of their age, as long as they prove that they have permanent and regular immigration status.
  1. Members suffering from a serious terminal illness diagnosed by a private or public doctor. The Disability Rating Commission must validate the medical opinion. With this validation, the respective administering institution must proceed with the repayment of the balance in a member’s savings account.

These amendments will enter into force 8 days after their publication in the Official Gazette.

(Official Gazette number 205 published on October 13, 2020)