By: Jorge Romero
The Constitution of the Republic enshrines the right of every person to the security of his or her economic means of subsistence in the event of inability to work or obtain gainful employment. It is well known that the world crisis caused by COVID-19, besides being a health crisis, has been catalogued as an economic crisis of great proportions. Considering that the National Congress of the Republic has the power to create, decree, interpret, reform and repeal laws, on December 29, 2021 Decree 110-2021 was published in the Official Gazette La Gaceta, which contains the Customs Tax Amnesty whose benefits will be in force until April 30, 2022.
The amnesty is a pardon, in this case its scope is tax and customs, the Decree makes special emphasis in that it does not include municipal taxes. The benefit is in favor of whoever applies or requests it and there cannot be a discriminatory treatment if a taxpayer complies with the objective and subjective elements to enjoy such benefit.
Among the main benefits contained in the Amnesty we can highlight the following:
1) Filing, without pecuniary penalty, the formal and material obligations pending until December 31, 2021. In those cases in which the returns filed under this numeral generate liquid amounts of taxes payable in favor of the State, the amount of the tax debt will be determined without the application of pecuniary sanctions of the formal and material obligations during the term of the benefit;
2) To pay, without pecuniary penalty, the amounts of taxes pending payment derived from the self-assessments filed by the taxpayers up to December 31, 2021, whether these have been filed out of time or not.
3) The benefit of amnesty shall be granted ex officio and automatically to taxpayers who have filed their tax returns out of time until December 31, 2021, on that tax debt pending payment related to the pecuniary penalties as an accessory sanction generated by the late filing, provided that at the date of entry into force of this Decree they do not owe the tax caused in the return that originated it;
4) The benefit of amnesty shall be granted ex officio and automatically to taxpayers who have filed or complied with their formal obligations on December 31, 2021, on the pecuniary sanctions when the fine is the main thing;
5) To make rectifications to the returns filed until December 31, 2021, without the application of pecuniary sanctions for the additional taxes generated by the rectification;
6) In the cases in which the Tax or Customs Administration has determined taxes to be paid as a result of the exercise of its powers and these have been notified until December 31, 2021, the taxpayer may pay the taxes determined, without the application of pecuniary sanctions derived from the noncompliance of its material or formal obligations.
Once the obligation of payment of the assessed tax has been fulfilled, the taxpayer will be released from the payment of fines or interest generated during the assessment procedure, regardless of whether the proceedings are final or not;
7) As long as the regulatory assumptions of the same are met, this benefit will be enjoyed ex officio and automatically without the need to file requests or petitions by the taxpayer before the Tax Administration or Customs Administration.
8) The amnesty benefit contained in this Article does not apply to municipal taxes.
One of the main problems with the Amnesty Decree is that although we have the impression that the legislator intended to grant a fairly broad benefit, there are sanctions such as those related to the sanctioning regime of the Transfer Pricing Law that generates doubts about its application. In this case, the penalties established in paragraphs 1 and 2 of the Transfer Pricing Regulation Law are as follows:
Not providing, or providing with false or manifestly incomplete or inaccurate data the information or documentation that at the time is required by the Tax Administration;
Declaring in any fiscal year a taxable income lower than that which would have corresponded due to an agreed valuation different from that which would have been agreed in comparable circumstances by independent parties, unless there is documentation that verifies or justifies the veracity of what has been declared.
None of the paragraphs described in the assumptions contained in the Decree emphasizes the penalties on Transfer Pricing, in that sense, we believe that it would not apply and so with other penalties in other cases contemplated in our rules.
In conclusion, the Tax and Customs Amnesty benefit contained in the referred Decree does not apply to all the pecuniary sanctions, we do not know the criteria that the new tax and customs authorities, who have just taken office last week, may have in the application of the benefit. It is appropriate to indicate that a specific analysis must be made in each case to determine if the assumptions apply. On the other hand, it will be very important to be attentive to the communications and processes carried out by the Tax and Customs Administration, since they are obliged to adapt their systems and to grant the benefit in what applies ex officio and automatically.
In Consortium Legal, we are in total availability to know and analyze your specific case for the application of the benefit in case of entering in the applicable assumptions.