Recently, Law 10165 "Law to temporarily substitute the application of the sanction of closing businesses and facilitating the payment of VAT in sectors severely impacted by the sanitary restriction" was published in the Official Gazette La Gaceta.
The new Law, which comes late, authorizes the temporary substitution of the sanction of closing a business for a pecuniary sanction of 462,200.00 colones, provided that the taxpayer is up to date with its material and formal obligations. It also allows something that we have always been surprised does not exist in our country: the fractioning or deferral of VAT debts, although it is only authorized for certain taxpayers. Let's see.
In the case of taxpayers with sanctioning procedures for business closure in process or firm, but who to date are not up to date with their material and formal tax obligations, they will be granted a period of three calendar months, counted from the entry into force of this law, to comply with all their obligations and, in the case of VAT, to process a payment by installments, a facility (VAT) that we understand only covers taxpayers who are in the tourism industry, entertainment issue that we understand.
The possibility of splitting VAT establishes the following requirements:
- Interested parties must submit the request for payment in installments no later than three months after the entry into force of this law.
- Tax periods equal to or prior to June 30, 2021 and the obligor has filed the respective returns before May 31, 2021.
- The taxpayer must be registered in tourism, entertainment, bar or restaurant activities.
- The taxpayer must pay in a single installment payment a premium equivalent to fifteen percent (15%) of the tax debt and accrued interest at the time the request for installment payment is made.
- The maximum term of the installment payment may be up to eighteen months.
In debts exceeding one hundred base salaries, a guarantee must be provided under the conditions defined in the regulations.
Two comments: it does not make sense that only certain sectors are granted the facility of fractionation or deferment (what we know as payment arrangement) in VAT, or is it that the pandemic only affected the bars? Secondly, it is time to put an end to business closures. More than 10 years ago, when I had to apply it as director general of taxation, we already warned how negative it was for companies and how little it improved the collection. Then, it was applied years after the infraction was committed and then it did not serve as a deterrent for behavior.
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fvillalobos@ics.cr