On May 5, 2023, Law No. 1503 of May 5, 2023 (hereinafter, the “ Law”) was published in the Official Gazette of the Plurinational State of Bolivia, on the purchase of gold for the strengthening of Bolivian International Reserves.

Among other relevant aspects, the purpose of this Law is to authorize the Central Bank of Bolivia (“BCB”) to carry out gold purchase operations in the domestic market in order to strengthen Bolivian international reserves. In addition, it allows financial operations to be carried out with the International Reserves in gold in international markets.

This Law is applicable to all individuals and public and private legal entities, that are legally established and authorized by the competent entities, that participate in the commercialization of gold.

On the other hand, and according to the purpose of this Law, it is established that the BCB may buy gold as just another participant in the domestic market. For the purchase of gold, said State entity will pay in national currency based on the international price of the mineral.

Furthermore, the BCB is exempt from the application of the Basic Rules of the Goods and Services Administration System, as well as the regulations applicable to the contracting of specialized goods and services abroad provided for in the Law.

On the relevant aspects of this Law, and in line with the above, we present a brief summary below:

  • Tax exemption

The BCB, due to its purpose, when carrying out gold purchase operations in the domestic market that is exclusively intended to increase International Reserves, is exempt from Transaction Tax and is subject to the zero rate of Value Added Tax - VAT.

  • Operations with gold reserves

The BCB will be able to carry out operations in the international markets with the gold reserves. It may invest, buy, deposit in custody, in addition to transforming and converting them into currencies in order to optimize the liquidity and/or performance of the International Reserves.

The BCB must maintain a minimum of twenty-two (22) tons of gold for international reserves, in addition, it must report on operations to the Plurinational Legislative Assembly.

Within sixty (60) calendar days - computed from the publication of the Law - the BCB must establish the conditions, characteristics and procedures through regulations issued by its board of directors.

Likewise, the Ministry of Mining and Metallurgy, the National Service for the Registration and Control of the Marketing of Minerals and Metals - SENARECOM and other competent institutions must issue specific regulations. Said institutions will have a term of sixty (60) calendar days from the publication of the regulation issued by the Central Bank of Bolivia (BCB).

With this law, Law No. 175 of October 11, 2011 “Law for the purchase of gold destined for International Reserves” and other contrary provisions are repealed.