Decree No. 32-2017 Amendment to Article 213 Tax Code

To Reform Article 213 of the TAX CODE, contained in Decree No. 170-2016 dated December 15, 2016, which shall be read as follows:

Tax and Customs Amnesty.- The benefit of tax and customs amnesty is granted in accordance with the conditions contained in the following paragraphs: 1. During the period from January 1, 2017 to September 30, 2017, taxpayers may:

• a)

  Present tax and customs declarations, including manifests, transits and other customs documents, that have been omitted by taxpayers, regarding obligations and payments up to December 31, 2016, concerning tax or customs obligations relating to annual or monthly fiscal periods that have not prescribed corresponding to the years 2012, 2013, 2014, 2015 and 2016;

• b)

  Make corrections to declarations, whether tax or customs, including manifests, transits and other customs documents, which taxpayers may have presented with errors and whether or not they were obligated to present them;

• c)

  Pay, when applicable, the taxes related to the declarations referred to in items a) and b) above, without penalties, surcharges or interest, as applicable under the previous Tax Code;

• d)

  In the case of Official Assessments or Additional Tax determined ex officio to declarations presented by taxpayers as of December 31, 2016 and which are not final, they may pay the taxes corresponding to the total amount or the portion that has been accepted by the taxpayers, without penalties, interest or surcharges, as applicable under the previous Tax Code. The Tax and Customs Administrations shall make corresponding adjustments in their systems to register the aforementioned payments;

• e)

  Taxpayers must cancel the tax and customs debt that is final and pending payment as of December 31, 2016, without interest, penalties or surcharges, whether or not covered by payment plans;

• f)

  This amnesty benefit shall also be granted to taxpayers who have presented their declarations, determinative and informative, annual, monthly or indistinctly from the period, up to December 31, 2016, in a late manner and whose tax or customs debt consists of penalties, surcharges or interest as accessory sanctions and who do not owe the National Treasury any amount caused in the declaration that originated it. This benefit applies to Declarations, Manifests, Transits and other customs documents of any type, including those that apply to tax suspension regimes, but that generate penalties;

• g)

  The amnesty benefit is applicable concerning the Sales Tax; except, the Sales Tax arising from the sale of goods and services that has been collected by the responsible parties and not remitted in a timely manner to the tax authority, therefore all matters concerning Sales Tax shall apply to this amnesty benefit, distinct from that previously described in this paragraph; and h) The amnesty benefit contained in any of the items of this numeral shall be enjoyed automatically without the need for submission of applications or requests to the Tax Administration or Customs Administration; for which reason these shall make adjustments in their systems to guarantee faithful compliance with the provisions of this Decree. 2. Taxpayers who are not in arrears and have presented their declarations to the Tax Administration and the Customs Administration; regardless of whether or not they have been subject to tax or customs audits, as well as the status of the audit process, notified or not notified; who maintain administrative or judicial remedies with respect to obligations not voluntarily accepted and that are not final, liquid and enforceable; during any annual or monthly fiscal periods that have not prescribed corresponding to the years 2012, 2013, 2014, 2015 and 2016, may avail themselves of the amnesty benefit consisting of tax and customs regularization of finality or final seal for the fiscal periods described above, being required to make a single payment of one point five percent (1.5%) on gross income obtained according to the Sworn Declaration of Income Tax. For this purpose, the highest amount reported in any of these periods shall be used as the basis. With the single payment, the prescribed years prior to 2012 shall also be regularized. Years prior to 2012 that have pending judicial or administrative actions may also be regularized by paying another amount equal to one point five percent (1.5%), calculated in accordance with that described in the preceding paragraph. The processing for obtaining the finality and final seal shall be conducted separately before the Tax Administration and the Customs Administration and the amount collected from the single payment of one point five percent (1.5%) referred to in the preceding paragraph shall be recognized as revenue in equal parts for both Administrations. The processing shall consist solely of the presentation of a request for issuance of finality and final seal, which shall be accompanied by the TGR-1 Payment Receipt as of the effective date of this Decree or payment receipt issued by the customs or tax administration for payments made before the effective date of this Decree, corresponding to the single payment of one point five percent (1.5%) on gross income obtained according to the Sworn Declaration of Income Tax, according to the parameters indicated in the preceding paragraph. The Tax Administration and the Customs Administration, without the need to issue technical or legal opinions and reports, shall issue within a period of ten (10) business days, the resolution containing the finality and final seal which shall be applied giving all material and formal obligations of the Taxpayer as satisfied, as well as all matters concerning all taxes administered and collected by both the Tax Administration and the Customs Administration for the fiscal periods aforementioned, merely by certifying that the taxpayer has no pending arrears in its determinative and informative declarations. Taxpayers in arrears as of December 31, 2016 may not avail themselves of this benefit. Taxpayers who have outstanding amounts owed to the National Treasury mentioned above, prior to availing themselves of the benefit established in this numeral must pay the amounts owed and that are final. This benefit shall take effect from the effective date of this Decree until September 30, 2017. Taxpayers included in this numeral shall not be subject to subsequent audits for the periods indicated, for which the Tax Administration and the Customs Administration shall immediately and without any requirement issue the finality or final seal and shall be exempt from all administrative, civil and criminal liability for acts and facts related to tax and customs amnesty; likewise, they shall indicate this in their systems so that regularized taxpayers are not incorporated in control and audit plans related to the fiscal periods contained in this amnesty. To avail themselves of the benefit of tax and customs update, insurance institutions must make a single payment of one point five percent (1.5%) on the year in which they obtained the highest income from net premiums minus cancellations and refunds, plus financial income and commissions from reinsurance ceded. 3. The Tax Administration and the Customs Administration are authorized, within the scope of their powers and competencies, to execute payment agreements or arrangements, exempt of penalties, interest and surcharges, with taxpayers who have outstanding obligations to be paid through administrative or judicial channels as of December 31, 2016, with the limitation that such payment agreements or arrangements shall be in effect until September 30, 2017. Taxpayers shall pay the amount that their actual economic situation permits, being able to agree on reasonable installments as long as the full tax debt is canceled by no later than September 30, 2017. In cases where the payment agreement relates to the single payment of one point five percent (1.5%) related in the preceding numerals, the finality and final seal shall not be issued until the full payment has been completed. Payments made to the National Treasury shall be made through authorized banking institutions, using the Official Payment Receipt (ROP) and the corresponding Customs Payment Receipt (RAP), except when made at the time of presentation of a Declaration. In the case of payment of one point five percent (1.5%) on gross income referred to in numeral 2, it shall be made using the TGR-1 Receipt as of the effective date of this Decree or payment receipt issued by the Customs or Tax Administration for payments made before the effective date of this Decree. 4. Pursuant to this Decree, the Tax and Customs Administration shall regularize all those taxpayers who request it and who comply with all the provisions established here regarding being in arrears such arrears being final, including all those who maintain ongoing files, requesting regularization under Article 213 of Decree No. 170-2016".