The members of the Legislative Assembly approved this week a special transitory law that will allow taxpayers to pay taxes and municipal fees without interest or fines in the 262 municipalities of El Salvador.

The Special Transitory Law that grants Facilities for the Voluntary Compliance of Substantive and Formal Obligations regarding municipal taxes, known as municipal tax amnesty, establishes a regime of incentives and granting of facilities to taxpayers for a period of 90 days from its publication in the Official Gazette.

Our associate attorney, Rebeca Galdámez, explains that the tax amnesty is an opportunity to catch up with the payment of taxes, establishing a dispensation to natural and legal persons.

“Usually a tax amnesty of fines and interests is established in the last months of the year and until December 31. In this case, the Assembly has made a general law in all local governments to continue with this benefit”, mentions Galdámez.

The dispensation regime will cover:

1. Fines and moratory interests generated by the non-payment of the municipal tax declared and not paid;
2. The fines in moratory interests created for not paying the municipal taxes at the time of filing the declaration, which are omitted and to take advantage of the measure.
3. Fines generated by non-compliance with the obligations established in Article 90 of the General Municipal Tax Law.

Our specialist comments that these benefits will not apply to individuals and companies that were sanctioned through an ex officio tax assessment procedure. Likewise, taxpayers who are facing a judicial action for the collection of municipal taxes, interest and fines are also excluded.

In order to take advantage of the measure, Galdámez states that individuals must go to the attention point set up by the municipality or make payments by bank transfer, as long as they are received in the bank account during the term of the law.

Another important point is that, in order to apply for this benefit, the taxpayer must acknowledge the debt and desist from the administrative or judicial processes initiated in relation to its tax obligations and present a proof of receipt of the desistance by the respective judicial instance.

“A premium of a minimum of 30% of the total amount of the tax to be paid will be paid, without the fine and interest, and under the conditions of payment. People should not forget that the term of the payment plan will not exceed December 31, 2023,” she adds.

The approved law also indicates that the non-compliance of a single installment of the payment plan will leave the measure without effect and the total balance of the debt will be demanded through the judicial instances.

If you have any further questions about the regulation you can contact the Regulatory and Tax Department of Torres Legal at our offices or through our social networks.