Importance of the Regulation to the Law of Corporation Tax

Starting from September 1 of this year, the Regulation to the Law of Corporation Tax will enter into force of the law. It was published by decree number 40417-H, in the Official Gazette. 

The purpose of this Regulation is to establish the regulatory framework for the application of the legislation contained in Law No. 9428, which established a tax on all commercial companies, branches of foreign companies and individual companies with limited liability that are registered at the time of entry into force of the Law or those that from that moment are recorded in the Registry of Legal Entities of the National Registry. 

The validity of this Regulation brings with it a number of relevant aspects that must be taken into account by companies that are obliged to pay the tax: 

Tax payment for companies that are in the process of registration 

Companies that are in the process of being registered before the Public National of Legal Entities must pay the minimum rate which is 15% of the monthly base salary. 

If the companies are delinquent with the tax payment, the interests will run from the 30 calendar days following the date of presentation of the deed of incorporation before the National Registry of Legal Entities. 

Tax rate for declarants and taxpayers registered before the Simplified Regime 

  1. Commercial companies, branches of a foreign company and individual companies with limited liability, which are registered in the Registry of Legal Entities of the National Registry not registered in the unique taxable regime of the Tax Authority, will pay an amount equivalent to fifteen percent (15%) of a monthly base salary. 

 

  1. The taxpayers of the Tax, who are taxpayers of Income Tax in the Simplified Regime, that count with a gross income which is less than one hundred and twenty basic salaries, will pay an amount equivalent to twenty-five percent (25%) of a monthly base salary, Those who have a gross income in the range of one hundred and twenty basic salaries and less than two hundred and eighty basic salaries will pay an amount equivalent to thirty percent (30%) of a monthly basic salary and those with a gross income equivalent to two hundred eighty basic salaries or more, will pay an amount equivalent to fifty percent (50%) of a monthly base salary. 

Dissolution of companies 

The Tax Authority will send a report to the Registry of Legal Entities relating to the taxpayers with 3 consecutive delinquency periods of the Tax so that the dissolution will be published in the Official Gazette and the cancellation of the registration of the company will be executed. 

 

 

Exempted legal entities  

Companies that are carrying out permanent productive activities classified as micro and small companies registered before the Ministry of Commerce and the agricultural producers registered with the Ministry of Agriculture and Livestock will be exempted from the payment of this tax, for which the Ministry of Commerce and Ministry of Agriculture and Livestock must provide the list of such companies to the Directorate General of Taxation.  

 

Filing of Form D-140 

Companies registered after the entry of the law, and registered officially in the UTR, will have the obligation to file form D-140 (Declaration Form and Modification of Taxpayer Registry Data) within the month following to the date of registration before the National Registry of Legal Entities. Companies registered in the Registry of Legal Entities prior to the entry into force of the Law, which were not required to register the unique taxable regime, must submit the aforementioned form within the terms established in transient state I of the Regulation. 

The funds raised with the entry into force of this Law and the Regulations will be allocated to the Ministry of Public Security, a ninety percent (90%) of the tax collected is to be invested in physical infrastructure of police and maintenance of police equipment, in the attention of citizen security and the fight against crime. For the Ministry of Justice and Peace, a five percent (5%) of the tax collected to support the financing of the General Directorate for Social Adaptation and for the Organization of Judicial Investigation a five percent (5%) of the total tax collected for the attention of organized crime.  

 

Mariel Castro Boschini