Frequently asked questions on Tax Law in the face of COVID-19 in Central America

In the case of Guatemala, the Tax Administration has not published any other extension, for the compliance of tax obligations, apart from the one published in April. Therefore, tax obligations must be paid according to the deadlines established by law.

On the contrary, in El Salvador, tax returns and other reports must be filed in the times indicated by the Law, according to the tax calendar published by the General Directorate of Internal Taxes in the following link.

In Honduras, an extension was granted to “Obligados Tributarios” categorized as small and medium taxpayers and to individuals and independent professionals in the obligation to file and pay (without fines and interest), the following returns:

  • Obligation to declare and pay Income Tax (ISR) Joint and several contribution and Net Assets
  • Specific Single Income Tax on the Rent or Lease of Housing or Apartment Buildings
  • Special Contribution on Surplus Funds obtained by Private Universities, Schools and Institutes of Preschool, Primary and Secondary Education
  • Social Contribution of the Cooperative Sector

All corresponding to the 2019 fiscal period, of which both their formal and material obligation must be fulfilled by June 30, 2020.

In the case of Nicaragua, the tax returns and corresponding payments must be submitted within the time limits indicated in the Act. Finally, in Costa Rica there is an extension for payment of the tax, not for submission of the declaration. There is a moratorium on the payment of VAT and Selective Consumption Tax for the months of March, April, and May 2020, as well as a moratorium on tariffs for nationalized goods in the months of April, May, and June 2020. The payment of these taxes must be made no later than December 31st of the current year, without fines or interest. In the event that the taxpayer foresees that he will not be able to make the respective payment, he may request a payment facility from the competent authority.

In Guatemala, Decree 12-2020 establishes an exemption from import taxes, VAT and customs duties on donations received in favor of CONRED, churches, organizations and charitable associations authorized and registered in the Register of Legal Persons.

In turn, in El Salvador, there will only be a 3-month exemption from the payment of the Special Contribution for the Promotion of Tourism established in Article 16 of the Tourism Law. This benefit applies as of March 20, 2020, the date on which Legislative Decree 598 came into force.

In Honduras, in accordance with Decree 29-2020, individuals and corporations were exempted from the payment of Sales Tax and “Tax, Production and Consumption” on the local purchase and import of raw materials, inputs, packaging materials and containers necessary for the manufacture of sanitizing products and medicines to meet health emergencies. There was also a 15% exemption from Sales Tax on the purchase of masks and hand gel.

In Nicaragua there are no special exemptions or exemptions granted due to COVID-19. The above is without prejudice to the existing and valid exemptions and exonerations, which have not been modified.

Finally, in the case of Costa Rica, during the months of April, May and June, the lease of movable and immovable property shall be exempt from VAT.

In the case of Guatemala, no. Since Article 19 of Decree 29-2020 establishes that the calculation of legal deadlines in all types of administrative proceedings is suspended for 3 months. This applies to evacuations of hearings and administrative appeals. It would not apply to statements and the statute of limitations because they do not constitute an administrative process, the same as in El Salvador and Honduras, where they are suspended.

In Nicaragua, on the other hand, no regulations have been issued authorizing the suspension of time limits in administrative tax proceedings. And in the case of Costa Rica, in view of the crisis, the Ministry of Finance has informed that during the months of April and May 2020 it will not notify new communications of the initiation of fiscal actions, determining resolutions, sanctioning resolutions, or the resolutions on revocation appeals presented. The inspection processes notified prior to April and May 2020 will continue.

In Guatemala, yes, and the hours of operation at the national level are from 8:00 a.m. to 3:00 p.m. In El Salvador, it also continues to operate, but not with attention to the public, only by electronic means and call center. In Honduras, the Tax Administration is not operating. And in the case of Nicaragua there is no suspension of operations.

Finally, in the case of Costa Rica, the offices remain with restricted access and their services are provided digitally through the web platform, e-mail and telephone lines. Tax formalities can be carried out by e-mail, unless the person does not have access to this means or needs to deliver a physical document. If the taxpayer has a digital signature, there should be no impediment to the filing and processing of the application.

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