Third consecutive year of tax amnesty legislation introduced

The Legislative Assembly approved the special and transitional law by 56 votes. This proposal aims to facilitate compliance with tax obligations, customs and other penalties through a “tax amnesty”. 2024 will be the third consecutive year that this initiative will be available.

With the approval of the Fiscal Commission, Marvin Sorto, Director General of Internal Taxes, stated that “the purpose of this law is to allow taxpayers to regularize their tax situation with the Ministry of Finance”.

What does the amnesty include? Who can benefit?

1. 1. Exemption from payment of interest and fines: It is intended to exempt from the payment of interest, surcharges and fines in cases of incorrect declarations, undue balances, control procedures or reports in various stages (administrative, judicial or constitutional), provided that no customs declarations or customs duties have been filed.
   2. Administrative fines: It is proposed to exempt fines imposed by the public administration, except in the case of municipalities. For example, fines imposed by the Court of Accounts could be exempted in order to facilitate the recovery of payments related to patrimonial debts.
   3. Audit and assessment procedures: The amnesty would cover audit procedures, appraisals, and matters related to internal taxes, both in judicial and fiscal venues. 
   4. Income tax withholding: Companies that withheld taxes and did not remit them to the IRS, incurring a 100% penalty, could have this penalty waived.
   5. Debts at the Attorney General’s Office: Those cases of debts sent to addresses such as the Attorney General’s office may also benefit.
   6. Possibility of payment: The option to pay the findings by partial or total waiver will be offered.

In addition, the 2024 Tax Amnesty will be available to taxpayers who have filed their tax returns with the Internal Revenue Service by July 31, 2024, and believe they did not accurately report their income or taxes. In this case, penalties, surcharges and additional interest will be eliminated.

Application Details:

• Duration: The amnesty application will run for 90 calendar days.
• Installments: The General Directorate of Treasury (DGT) of the Ministry of Finance will allow payment in up to nine installments, with the first installment equal to 10%.

Marvin Sorto clarified that only “interest surcharges” on traffic fines will be exempted and pointed out that outstanding traffic fine debts can affect the achievement of tax solvency, which is crucial for access to credit or public tenders.