Strategizing Multinational Tax Risks

The Salvadoran Congress has recently approved a three-month tax amnesty, ending on 9 December 2014.  The amnesty program applies to taxes and customs duties due prior to 9 September 2014 with a waiver on interest, charges and fines.  To the extent there are outstanding issues in El Salvador, this is an excellent time to review this initiative by the tax authorities to facilitate voluntary compliance.

Details of the program are outlined in the EY Global Tax Alert attached herein:

On 5 September 2014, the Salvadoran Congress approved a three-month tax amnesty program.1 The amnesty period began on 9 September and ends on 9 December 2014.

This amnesty program applies to all taxpayers subject to the taxes administered by the Tax2 and Customs Authorities.3 It applies to taxes and customs duties that had to be reported or that were due and payable prior to the entry into force of the program.

Taxpayers that pay initial or additional taxes due are granted a waiver on late payment interest, charges and fines. Amounts previously reported in tax returns can be modified without triggering a penalty.

The amnesty program is not available to taxpayers who are currently undergoing a criminal proceeding for tax crimes or customs violations.

Taxpayers may request from the Treasury Authority a grace period for the discharge of their payment obligations. An extension of up to six months may be granted depending on the amount of the liability.

Endnotes
1. Through Legislative Decree No. 793 approving the Temporary Law to facilitate voluntary compliance with tax and customs duties (in Spanish: Ley Transitoria para facilitar el cumplimiento voluntario de obligaciones tributarias y aduaneras).

2. In Spanish: Dirección General de Impuestos Internos.

3. In Spanish: Dirección General de Aduanas.

EYG no. CM4738