El Salvador: Congress extends tax amnesty until December 2023

El Salvador’s Congress has passed a tax amnesty, which is open to taxpayers only until 31 December 2023 and permits regularizing monthly and/or annual obligations (including customs) arising until September 2023.

Legislative Decree No. 875 contains the Special and Transitory Law that Grants Facilities for Voluntary Compliance with Tax and Customs Obligations, published in the Official Gazette 205, Volume 441, dated November 1, 2023.

In accordance with the corresponding Legislative Decree, the amnesty will be applicable to taxes administered by the General Directorate of Internal Taxes and by the General Directorate of Customs, as well as with respect to collection processes that are under the jurisdiction of the General Directorate of Treasury. Benefits include up to nine instalments with a low downpayment and a broad scope that taxpayers can request from the General Directorate of Treasury (“DGT”).

All taxpayers who should have declared and/or paid taxes and customs duties corresponding to periods until September 30, 2023, without having done so, may apply for the benefits contained in the Legislative Decree. Likewise, taxpayers whose tax debts have been determined in accordance with article 74-A of the Tax Code may apply to the aforementioned benefits.

Taxpayers who pay the original or complementary taxes they owe could be exempt from interest, surcharges and fines, depending on the situation in which they find themselves, including those cases that have been referred to the Attorney General’s Office of the Republic.

Additionally, the Legislative Decree establishes that taxpayers who have taken advantage of any previous amnesty program and who, due to different circumstances, have not paid their debt within the period established in said program, could enjoy the benefits established in the tax amnesty program, with the exception of the exemption of fines, which can only be paid in installments. The DGT may grant them a period of no more than eight months to pay the debt.

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