New tax measures to support micro, small and medium-sized enterprises

by | Jun 15, 2021

Last Thursday, June 10th, the Chamber of Deputies approved the bill corresponding to bulletin No. 14278-05, leaving only the procedures for promulgation and publication in the Official Gazette to become law.

The regulation aims to renew some of the tax measures implemented in 2020 and adopt new measures to help micro, small and medium-sized companies, in order to face the difficulties arising from the current health crisis.

The new law consists of 4 points that we detail below:

Temporary decrease in the interest rate for SMEs

The interest rate is temporarily reduced from 1.5% to 0% in case of delay in the payment of all or part of any kind of taxes and contributions, for companies that meet the requirements to benefit from the Pro Regime SME that contemplates letter D) of article 14 of the Income Tax Law (hereinafter “LIR”), from the first day of the month following the date of publication of the law in the Official Gazette, and until December 31st, 2021.

Refund of the remainder of the tax credit of the Value Added Tax to SMEs

The option of requesting a refund of the accumulated remainder of the VAT tax credit determined in the returns for the months of July, August and September 2021, corresponding to the tax periods of June, July and August 2021 is established for the companies indicated in the previous section, which will be paid by the General Treasury of the Republic (hereinafter “TGR”), as long as the following copulative requirements are met:

  1. That it has obtained income from sales and services of the business in at least two months, continuous or discontinuous, during the period between January 1st, 2020 and May 31st, 2021.
  2. That the declaration made in June 2021 results in a VAT tax credit remaining, generated by the acquisition of goods or the use of services between March 1st, 2020 and May 31st, 2021 .
  3. That it has not repeatedly incurred in tax offenses or is formalized, accused or convicted of tax crimes.
  4. That it has submitted all its VAT returns for the last 36 tax periods.
  5. That the operations that give rise to the remainder are registered in the sales and purchases register.
  6. That it does not maintain a tax debt, except for taxpayers who are complying with payment agreements before the TGR, or who sign an agreement with said institution between the date of publication of this law and August 31st, 2021.

The reimbursement may be requested only once in any of the indicated months. For these purposes, taxpayers must exercise the option through a request before the Internal Revenue Service (hereinafter “SII”), that after verifying its origin will notify the TGR, so that it can proceed to payment within a period of ten working days counted from the date the request was made. The refund will not be subject to any administrative withholding.

The taxpayers who obtain the reimbursement must return the amounts received through the actual payments they make for the VAT generated in their normal operations that they carry out as of the month following the one in which the request is made.

Extension of validity of provisional patents

The validity of provisional commercial patents expired during the validity of Decree No. 4 of 2020 of the Ministry of Health, which decrees a health alert, and its extensions is extended. Said patents will remain in force for a period of one year from the day following the end of the health alert established by the aforementioned decree No. 4 or its extensions.


Flexibility of Payment Agreements

The TGR is granted the exceptional power to grant facilities of up to four years, for the payment in periodic installments of the taxes owed, in accordance with the provisions of article 192 of the Tax Code, for the period between the date of publication of the law in the Official Gazette and until December 31st, 2021. On the date of subscription of the respective agreement, the TGR will waive all the interest and penalties for late payment of the respective taxes, which are due in June 30th, 2021. Likewise, said agreements will not generate interest or penalties while the debtor is complying with and maintains its payment agreement in force.

The same power is established for the Municipalities with respect to payments related to commercial patents and patents on the sale and consumption of alcoholic beverages.

Javier Figueroa, Fischer y Cía. associate


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