Reduced interests rates, new payment terms and electronic notifications are some of the main changes envisaged in the regulations enacted.
After numerous revisions in Congress, President Evo Morales enacted Law No. 812 dated 30 June 2016, that contains mainly five modifications of the Tax Code in force since 2003.
The new law now considers as Tax Debt the Omitted Tax expressed in UFVs plus interests. And states that the interest rate will vary according to days of default, which varies between 4% and 10%, being the latter applicable for those taxpayers who are in default for 8 years until the date the taxable entity pays.
The above mentioned law also states that the authority to control, investigate, verify, check and supervise taxes, determine debts and determine administrative sanctions by the Tax Administration has a statute of limitations of 8 years. It determines that once reached, no further action can be made against the taxpayer; except when the taxable entity or a third party responsible failed to comply with the obligation of registering in the appropriate registries, is registered in a tax regime different from the one it should, commits an illegal activity or performs commercial or financial operations in countries of low or null taxation. In this case the above mentioned statute of limitations will be extended for two (2) additional years.
The reduction of the pecuniary sanctions for not paying taxes is another of the modifications stated in the new law. It states the reduction of the sanctions between 40% and 80%, according to the payment date in connection with different stages of the administrative procedures followed by the Authority.
In addition, Law No. 812 eliminates any economic sanctions against the taxpayer, if it decides to voluntary pay any tax debt before the Tax Authority notifies them by opening any administrative process. Nonetheless, if when doing so, there is a monetary difference in favor of the Tax Authority, unfortunately the authority will sanction the tax entity.
Another main change to the Tax Code is the means of notification by the Tax Administration to the taxpayer. From the date of the promulgation of the law, the electronic means will be implemented as a valid means of comunication, where by taxpayer may be notified of any action by the Authority through electronic mail, virtual office, or other available electronic means – stipulated by the Tax Administration – which will have the same validity and effectiveness than personal notification.
Moreover, the law states that until 31 December 2016 all taxpayers with tax debts could pay their tax debts or request a payment plan with only 4% annual interest, which will be applied to the entire period of default. Those taxpayers who already have a payment plan for their debts before this law entered into force, it will be benefited with the reduction of the rate of interest of 4% of the remaining payments. Additionally, taxpayers will receive some waivers as non-payment of the remaining payments. Additionally, taxpayers will receive some waivers as non-payment of fines, reduction of the penalties of default of debt payments of up to 80%, reduction in their debts of up 60% before the dismissal of the proceedings, and even before notification of the Supreme Court of Justice. Likewise, the fines for contraventions of omission of payment in process, with a firm or enforceable punitive resolution or those that are in execution and until the auction or direct award may de paid with the reduction of 60%, until 31 December 2016.
Finally, this law states a reduction up to 10% as an incentive for those taxpayers who pay tax obligations or fines until 31 August 2016, and 5% for those taxpayers who pay the applicable fine until 31 October 2016.
In conclusion, all those taxable entities or third parties responsible that have debts with the State may regularize them same with them benefits and incentives set forth in the above mentioned Law.