Relevant aspects of the timely submission of tax reports in El Salvador

In tax matters, under the provisions of art. 39 of the Tax Code (TC), taxpayers are obliged to pay taxes —material obligations— and to comply with formal obligations established in tax legislation.

Considering art. 85 of the CT, taxpayers, responsible parties, and other subjects who, by law, must do or not do something to ensure compliance with the substantive tax obligation, that is, the tax payment, are considered formal obligors.

Among the formal obligations that the obligors must fulfill is the presentation of reports to the Tax Administration, including the following:

1. 1. Address update report for receiving notifications – F211.
   2. Annual withholding report – F910.
   3. Monthly report of withholding, collection, or advance payment on account of VAT – F930.
   4. CNR of property, real estate, and mortgage registration – F975.
   5. Notary report for the granting of instruments – F986.
   6. Report from financial institutions, whether public or private – F972.

The purpose of these forms is to enable the Tax Administration to verify compliance with tax obligations, facilitate tax audits and reviews, and provide data that helps in the planning of fiscal and economic policies. They also allow for the analysis of economic trends, and it is important to point out that this benefits not only the Treasury but also taxpayers.

The obligation to file these reports under tax legislation has a deadline for submission, and failure to comply may result in fines for the omission of compliance, for late compliance, or for submitting these reports without complying with the specifications given.

Regarding the late presentation of tax obligations, art. 262-A of the CT establishes the rules for its imposition, as follows:

1. 1. If the delay is up to 10 days: A fine of 35% of the amount established for the infraction is applied.
   2. The delay is more than 10 days, but up to 20 days: A fine of 50% of the amount of the infraction is applied.
   3. Delay is more than 20 days, but up to 30 days: A fine of 75% of the amount of the infraction is applied.
   4. The delay is more than 30 days: A fine of 100% of the amount of the infraction is applied.
   5. However, in no case may the sanction imposed be less than 3 times the minimum monthly wage.

In addition to the above, the mitigating circumstances provided for in the tax legislation must be considered, by the provisions of art. 261 of the CT, which provide as follows:

1. 1. Voluntary correction: If the offender voluntarily remedies the situation before being required to do so by the Tax Administration, the penalty will be reduced by 75%.
   2. Correction after request: If the offender remedies the situation within the period granted by the Tax Administration, having been requested to do so, summoned or granted a hearing, the penalty will be reduced by 30%.
   3. Late correction: If the correction is made after the established deadline, there will be no mitigating circumstances for the penalty.

Therefore, if the respective reports have not been filed, the recommendation will be to file them voluntarily to obtain the 75% mitigating factor.

In any case, it will be the responsibility of the obligatory subjects to guarantee strict compliance with the formal obligations established in the tax legislation. Likewise, they must be aware of the scope of said provisions to ensure timely presentation and strict adherence to the specifications established by the Tax Administration.