Tax measures due to COVID-19 pandemic.

Candys Dorado – Associate

The national government having declared a State of Emergency, has issued different tax regulations to deal with the effects of COVID-19.

Among the measures adopted, the Tax Authority issued Resolutions of the Normative Board of Directors No. 102000000006 and No. 102000000009, which have provided extensions for compliance with the taxpayer’s formal obligations.

However, these regulations only extend deadlines for these obligations, not being  allowed to declare them cyclically, nor does these measures represent a decrease in the tax burden of taxpayers.

A clear example is that the possibility of granting new payment facilities or reprogramming those that are in progress has not been considered, without the corresponding accessories such as that contemplated in Supreme Decree 4198. Nor has the exemption of taxes for the importation of medicines, medical materials and biosafety equipment, since to date they are only exempt from the payment of Tariff Lien.

The acceleration in the refund of taxes has not been foreseen either, which would allow having Tax Credits for tax compliance.

An important aspect to take into account is what happens with the Payment Facilities in progress, since according to the RND. N° 102000000009, the installments corresponding to the periods February, March, April and May are unified in a single maturity term; that is, June 12th, 2020.

However, this unification implies that a taxpayer under Payment Facilities must pay the four accumulated installments or, pay at least three, since failing to do so, it will be considered as a breach and constitutes a Title of Tax Execution, in accordance with the provisions of article 27 of the Normative Resolution of Directory No. 101800000001 (regulation referring to Regulation for Payment Facilities).

On the other hand, regarding the obligations of RC-IVA Withholdings and RC-IVA Dependants, there has been no unification regarding the expiration in submitting corresponding tax declarations. Employers must submit February and March tax declarations in April, while Employees dont have a clear date for these months, they can however, submit tax declarations for April and May until June.

Once again, the extension established does not contribute in reducing the tax burden, and tends to punish the dependent who does not have an accumulated tax credit.

It is expected that the National Government will issue new regulations to alleviate the tax burden that has been generated during this quarantine, and in respect to other tax obligations.