|Current Base Salary
(January 1st, 2017)
|Current Interest Rate
(March 17st, 2017)
|Late payment penalty rate
(month or part month)
|Reference Exchange rate BCCR
(May 1st, 2017)
Changes on the terms of prescription for taxpayers
In accordance with the Law Against Tax Fraud (N° 9416), which came into effect on December 30th, 2016; a series of reforms were made to the Code of Norms and Tax Procedures (CNTP). These changes included sections 52 and 53, in relation to the interruption of prescription in tax matters.
In section 51 of the CNTP a period of 4 years applies for the prescription of the payment and the right of collection by the Administration of the tax liability (including interests) and possibility extending such timeframe to 10 years for those taxpayers who have not file tax statements or if such are classified as fraudulent.
Prescription Terms Calculation
The criteria used to calculate the prescription before the amendment of section 52 of the CNTP was that it began to count as from January 1st of the following calendar year from the date on which the tax should have been paid.
However, with the amendment this term of prescription changes to be counted from the first day of the month following the date on which the tax must be paid.
This amendment is particularly important for monthly taxpayers, such as Sales and Withholding Taxes, as well as those with special closing periods for the purposes of the Income Tax.
Let’s take as an example the Sales Tax for the month of February 2017. Its legal payment date was on March 15th, 2017, and according to the previous application of Article 52 of the Code, its prescription would have started on January 1st, 2018 and ended on December 31st, 2021.
With the current regulation, prescription begins on April 1st, 2017 and would end on March 31st, 2021. Therefore there would be a 10 month difference between the previous term of prescription and the current one. It is worth clarifying that, for purposes of tax refunds, the term used is regulated in another Law and computed in a different manner than the one analyzed on this opinion.
Prescription Interruption or Suspension
As a result of this amendment, the prescription term will be interrupted, if any of the situations of section 53 of the CNTP occur:
- Notice of beginning of verification actions. If the proceedings do not begin within a maximum period of one month, or once initiated; they are suspended for more than two months, the interruption will not be produced.
- Determination of the tax made by the taxpayer
- The express recognition of the obligations, by the debtor.
- The request for deferrals and installments of payment.
- Notice of administrative or judicial acts intended to execute the collection of the debt.
- The filing of any request or claim, in the terms set out in section 102 of the CNTP
- If the Public Prosecutor's Office does not file a formal indictment or a resolution of dismissal is issued for the taxpayer, within a maximum period of five years, the interruption will not be valid.
Finally it should be pointed out that the amendment was not comprehensive and a different calculation will apply if the prescription is interrupted, as in this case the term begins to be calculated again from January 1st of the following calendar year on which the interruption occurred. Certainly this will benefit the Tax Administration in a future tax audit, which is why it’s so important to provide special care to this matter on a daily basis.
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