COVID-19 in Latin America. Main tax measures that provide liquidity to companies and facilitate voluntary compliance with tax obligations.
Fiscal context in Latin America with the COVID-19 pandemic.
The special situation produced by the COVID-19 pandemic merits equally special fiscal measures, given that the restriction of freedom of movement and the mandatory social distancing as an effective way to prevent contagion.
They cause problems in the fulfillment of material tax obligations (payment of the tax) as well as formal obligations (filing of returns, census, etc.), bearing in mind the tax years.
In this scenario, States have adopted various measures in the interest of facilitating voluntary tax compliance, collecting, preventing future conflicts, implementing preventive measures against tax fraud and fostering material collaboration to combat COVID-19.
To this end, the development and strengthening of digital platforms has been fundamental; however, given the existence of a clear inequality in Internet access, digital divide, it has become essential to have regulations that provide, in a general and binding manner, for certain issues.
If you want to see more about the measures applied due to COVID-19 in the tax and fiscal issue in Spain, you can see article: Tax measures in Spain.
Taxpayers natural persons:
– Deferral, without late payment interest, of the payment of the first installment of the Land Tax on real estate whose tax appraisal is less than $133.000,000.-, installment to be paid prorated in the following three installments accrued in June, September and November.
– Refunds derived from the tax regulations, ex officio, for self-employed persons, in April 2020, and for self-employed persons, early refund of amounts withheld in January and February 2020 (rate of 10.75%).
– Flexibility in the payment of income tax for low-income individuals, without accrual of late payment interest or fines for violations.
– Exemption from the mandatory Monthly Provisional Payments for three months, payable in April, May and June 2020. It does not affect the obligation to file the corresponding return.
– Deferral, without accrual of late payment interest, of VAT payments for three months, for April through July, payable in 6 or 12 monthly installments. It does not affect the formal obligation to file the corresponding return within the current deadlines. Certain requirements must be met to access the benefit.
– Devolutions derived from the tax regulations, ex officio, for SMEs, in April 2020.
– Deferral from April to July 2020 of the payment of income tax for SMEs. It does not affect the formal obligation to file the corresponding return.
– Deferral of payment of the Land Tax, without interest on arrears, to entities with sales of less than UF 350,000, payable in the following three installments, June, September and November 2020.
– Zero rate to the Stamp Tax, from April 1 to September 30, 2020.
– Deadlines are extended for the filing of informative Affidavits (withholdings, changes of regime, among others).
Taxpayers natural persons:
– The benefit of the differentiated rate on Personal Property Tax for the repatriation of assets, was extended from March 31 to April 30, 2020.
For those who do not repatriate 5% of the assets, the deadline was extended to May 6, 2020 in order to make the payment on account of Personal Property Tax.
– Extension of the deadline to inform the employer of income tax deductions, until April 30, 2020.
– For the withholder, extension of the deadline for the annual liquidation until May 29, 2020.
– Monotributo: related to small taxpayers, exclusions from the regime are suspended for the months of March and April and cancellations for non-payment of the tax are suspended.
– The deadlines for the filing of Informative Affidavits have been extended (transfer pricing, to May 18 and 22; corporate reorganizations, in 90 days).
– The rules that allow the issuance of credit and debit notes to those who generate original sales receipts will be in force as from July 1, 2020.
– Advance payment of returns derived from the tax regulations.
– Advance payment of returns of taxes related to export.
– The payment of taxes for SMEs is postponed until June 30, 2020.
– The tax on bank credits and debits rates are reduced in order to assimilate the whole system to the treatment in force for social works.
– Type 0 for the extra-zone import duty, with exemption from the statistics rate, in order to promote access to critical inputs.
– Temporary VAT exemption on imports of critical inputs.
– Although not yet in force, there is an attempt to establish an extraordinary tax on large fortunes that would be applied to individuals, estates and large companies (+USD 3 million).
Taxpayers natural persons:.
– A Sanitary Emergency Tax COVID-19 is created. Taxable event: The rendering of personal services to the State, Departmental Governments, Autonomous Entities and Decentralized Services, non-state public law persons and state-owned entities in which the State or its entities have a majority shareholding. Personal taxation: Person providing the Service. Exemption: Health personnel. Tax subject to withholding to finance the COVID-19 Fund. It is applied with respect to monthly remunerations and benefits exceeding $120,000 Uruguayan pesos according to progressive scale and percentage rate. Vacation salary is not computed.
Taxable event: Income from retirements, pensions, military and police retirements and similar passive benefits exceeding $120,000 Uruguayan pesos. The tax rate is a percentage according to a progressive scale. It is a tax subject to withholding, applicable for the months of April and May, with the possibility of extension.
– Postponement of payment of income tax for the months of February and March for small taxpayers.
– Postponement of the minimum VAT payment for February and March.
– Prolongation for the imputation of dividends and profits affective to the month of April 2020.
– Extension for the filing of certain informative declarations (Dividends and fictitious profits).
Monotributo: Deferral of the payment of April and May whose 60% will be paid in six months and 40% will be paid by the State.
– Extension of the deadline for the payment of direct and indirect taxes caused or owed in the emergency period, in 120 days counted from March 20, 2020, without fines or interest for late payment, but the obligations of withholding agents are maintained.
– Extends the tax amnesty term of 85% reduction for interest, surcharges and penalties for unpaid taxes, from February 29 to June 30, 2020.
– Extension until June 30, 2020 for the filing of Statements (Income, Donations, transfer prices, among others) and, until May 30, 2020 for Income Tax Returns.
– It reduces the amount to declare and pay for Estimated Tax, by no less than 70% of the tax caused in the 2019 tax period that cannot be investigated or audited by the tax authority, payable as of September 30 and December 31, 2020. It does not apply to taxpayers audited for tax avoidance or evasion.
Taxpayers natural persons:
– Extension to June 30, 2020 of the filing of tax returns for individuals.
– Zero rate of import duties and VAT for goods used in hospitals corresponding to medical and emergency products, until September 30, 2020.
– Simplified Regime: the deadline for the payment of taxes due in April, May and June 20202 is extended by six months.
Nomenclatures: ISD, Inheritance and Gift Tax; VAT, Chilean Sales and Services Tax; IR, Income Tax; LIR, Income Tax Law and Double Taxation Deductions (DDDII).
Do not hesitate to contact us to tell us about your case through our email: email@example.com or, if you prefer, you can also call us at 602 226 895. Or you can leave us your details here.