Forgiveness – Tax Debt Regularization Law

“TAX ADJUSTMENT REGULARIZATION ACT”

On September 28 of this year, Law No. 1105/2018 “LAW OF REGULARIZATION OF TAX ADJUSTMENTS” better known as FORGIVENESS was promulgated, despite the analysis of said Law, it can be determined that in the end it is a partial remission of the accessories and / or components of the tax debt established in Article 47 of Law No. 2492 Tax Code however, regardless of the provisions, this benefit will be a palliative for small, medium and large taxpayers and / or taxpayers who are Under the fiscal pressure of complying with its tax obligations, we carry out a specific survey of the most relevant aspects:

Payment of Cash Tax Debts

  • Taxable Persons with tax debts in favor of the state of fiscal periods prior to this law for crimes of tax or customs fraud, evasion of evasion and / or payment omission until 11/30/2018 may pay the omitted tax, maintenance of value and fines with a reduction of 95% of the sanction and exempted from the payment of interest and fines for breach of formal duties recorded in the determination processes, expired this term may pay cash until 02/28/2019 with the reduction of the 90% of the penalty exempted from the payment of interest and fines for breach of formal duties recorded in the determination processes.

Payment of Tax Debts through the EASE OF PAYMENT Plan from the publication of this Law until 02/28/2019

  • FP may be eligible for the updated omitted tax, without interest and with 80% reduction of fines for tax or customs fraud, contravention of evasion and / or omission of payment and fine for breach of formal duties linked to the process of determination corresponding to fiscal periods prior to the publication of the Law.
  • Payment Plans that are in progress may benefit from this Law and pay the balance owed without interest and with a reduction of 80% in the case of fines for crimes of tax or customs fraud, tax or customs contraventions.
  • If the balance of the debt is paid in full it will have the planned treatment for the payment of cash tax debts taking into account for the reduction of the penalty and / or fine paid within the term until 11/30/2018 or until 02/28/2019
  • This benefit can be included including taxpayers who have unpaid payment facilities
  • Failure to comply with the payment facilities for tax debts and / or for the payment of Fines will result in the loss of the established benefits, whose balance of the omitted tax pending payment must be calculated in accordance with the provisions of Article 47 of Law No 2492 plus applicable fines in the case of tax debts.

Taxable persons with payment of Omitted Tax

  • Taxable persons who would have paid the omitted tax and maintain interest debts and / or fines are released from the payment of interest and fines, as well as exempt from the payment of MIF.

Termination of Fines in case of no AT activity

  • Fines for contraventions provided for in article 162 of Law No. 2492 and Article 186 of the LGA, corresponding to fiscal periods prior to Law No. 1105/2018 and in which the Tax or Customs Administration had not initiated a sanctioning process are extinguished.

Passive Subjects with Contested Administrative Acts Judicial or Administrative Way and / or in the Execution Stage

  • In order to benefit from this benefits, they must present prior withdrawal of the Contentious Demand or Appeal of Dependency depending on the stage in which the process is
  • In the event that it is the Tax Administration who has filed the Challenge, the independent taxable person may benefit from the amount determined in the contested act, if a difference is established in favor of the Tax Administration, these will be paid according to the provisions of the rule.
  • Taxpayers who have not been notified with the Verification and / or Inspection Order or being notified do not have a Cargo Hearing, can benefit from the benefit until 02/28/2019 if a difference is established in favor of the Tax Administration, these will be paid according to the provisions of the standard.
  • In the case of Tax Execution, this benefit may be used until the adjudication of assets in the auction process.

Undeclared Tax Obligations

  • The Taxable Persons Not Registered or Registered in a Regime that does not correspond to them, will determine VAT, IT and IUE in a consolidated manner. Paying only once, in cash 12% on 9% of the sum of your annual purchases of the last 3 steps, to be determined by DDJJ.
  • You must register with the PNC in the corresponding regime.
  • Taxable Persons Registered in the General Regime, will determine VAT, IT and IUE in a consolidated manner. Paying only once, in cash or FAP, 12% on the average of the declared income of the last 3 steps declared.
  • NIT Inactive, average income of the 3 steps prior to inactivation.
  • Sum and average of management income that reflect annual income.
  • The Taxable Persons that benefit from the benefits established in this paragraph, will not be subject to inspection for the regularized fiscal periods prior to the 2015 management.

Summary of the benefits of regularization of forgiveness:

1.- There will be a 95% decrease in sanction until November 30, 2018 if you pay in cash.

2.- There will be a 90% decrease in sanction until February 28, 2019 if you pay in cash

3.- There will be a 90% decrease for other tax contraventions, if paid in cash, other than those established in Art 2 of said Law.

4.- There will be a decrease of 80% for the other tax contraventions, if you pay in payment facilities, other than those established in Art 2.

5.- There will be the possibility of taking advantage of the regularization until one day before the auction of the good in case of any debt determined at any administrative or judicial stage.

Process:

The taxpayer who has tax debts in favor of the State must appear before the National Tax Service to request a re-liquidation of their tax debts and cancel taking advantage of the benefits established by Law No. 1105/2018.

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