Key Benefits:
LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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DECREE NO 134
THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR,
CONSIDERING:
I.-That the current Income Tax Act, issued by Legislative Decree No. 472 dated December 19, 1963, published in the Official Journal No.
241, Volume 201 of 21 of the same month and year, however have undergone substantial reforms in their structure, do not conform to the conditions economic and social of the country and moreover its manifest distortions do not allow
the sustained growth in the base of the tax in terms of coverage of taxpayers, so it is necessary to issue a new legal order on the subject, which collects the modern currents on taxation
direct;
II.-That it is necessary to have a law that seeks the extension of the bases
through a reduction of exemptions and reductions and according to the Elementary tax principles will eliminate double taxation;
III. Tax table containing simple, moderate rates
in all tranches and with a similar maximum rate for both natural and legal persons, in order to equalise the burden on the various contributors; and;
IV.-That, in addition to technical aspects, the Law considers in its administration and application facilities for greater certainty, transparency, neutrality and
ease of procedures;
THEREFORE,
in use of its powers on the initiative of the President of the Republic, through the Minister of Finance,
DECRETA: the following
INCOME TAX LAW
TITLE I
CHAPTER ONLY TAXED RENTS
Made Generator
Art. 1.-The collection of rents by taxable persons in the exercise or imposition period of
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in question, generates the obligation to pay the tax set out in this Law.
Income Obtained
Art. 2.-It is understood by income obtained, all products or profits received or accrued
by taxable persons, whether in cash or in kind and from any kind of source, such as:
a) wages, salaries, fees, commissions and all kinds of remuneration or compensation for personal services;
AUTHENTIC INTERPRETATION
DECREE NO 629.
THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR,
CONSIDERING:
I.-That the representation expenses that are given to some officials are intended to cover the ordinary and
performance of the charge, given the category of the respective official and the representative importance of their duties, so they do not constitute remuneration or compensation for personal services;
II.-That in the Income Tax Act, they are declared exempt from such tax representation expenses, for foreign service officials, which
is contradictory, since they give them a tax treatment as if they were salaries, for the case of officials who perform their duties in the country;
III.-That in order to make it clear that the said expenses do not constitute neither remuneration nor compensation for personal services, it is appropriate that the literal interpretation of Article 2 of the Law be interpreted authentically. mentioned,
in the sense that representation expenses are not included in the income obtained with the Income Tax;
BY TANTO,
in use of its constitutional powers and at the initiative of Deputy Gerardo Antonio
Suvillaga,
DECCRETA:
Art. 1.-The literal interpretation of Art. 2 of Legislative Decree No. 134 dated December 18, 1991, published in Official Journal No. 242, Volume No. 313 of 21 of the same month and year, which contains the Law on Income Tax,
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that the representation expenses enjoyed by some public officials, not constitute remuneration and compensation for personal services and are therefore excluded
from that provision.
Art. 2. This authentic interpretation is incorporated into the text of the Art.
2 of the Income Tax Act since its validity.
Art. 3.-This decree will take effect eight days after its publication
in the Official Journal.
GIVEN IN THE BLUE HALL OF THE LEGISLATIVE PALACE: San Salvador, at twenty-five
days of August of a thousand nine hundred and ninety-three.
D.O. Nº179, TOMO Nº 320, DATE: September 27, 1993.
b) Of the business activity, whether commercial, agricultural, industrial, service, and any other nature.
c) Capital such as, rentals, interest, dividends or stakes; and
d) ALL CLASS OF PRODUCTS, PROFITS, PROFITS OR PROFITS OF ANY
ARISING FROM THEIR ORIGIN, DEBTS OWED, UNDOCUMENTED LIABILITIES OR PROVISIONS OF EXCESS LIABILITIES, AS WELL AS INCREASES IN NON-JUSTIFIED ASSETS AND EXPENSES INCURRED BY THE TAXABLE PERSON WITHOUT JUSTIFYING THE
ORIGIN OF THE RESOURCES REFERRED TO IN ARTICLE 195 OF THE TAX CODE . (14)
IN THE CASE OF UNDOCUMENTED LIABILITIES AND PROVISIONS OF EXCESS LIABILITIES, THE INCOME OBTAINED SHALL BE CHARGED IN THE RESPECTIVE PERIOD OR EXERCISE OF TAXATION. (14)
Products or utilities excluded from the concept of rent
Art. 3.-They do not constitute income for the purposes of this Law:
1) THE VALUES RECEIVED BY THE WORKER EITHER IN MONEY OR IN KIND FROM THE EMPLOYER IN THE CONCEPT OF VIATICS FOR TRANSPORT, FOOD AND STAY
IN A REASONABLE AMOUNT, WORK TOOLS, UNIFORMS, OFFICE EQUIPMENT, PROVIDED THAT THE ACTIVITIES TO WHICH THESE VALUES OR GOODS ARE INTENDED ARE NECESSARY FOR THE PRODUCTION OF THE INCOME OF THE
EMPLOYER OR FOR THE CONSERVATION OF THE SOURCE OF SUCH INCOME. LIKEWISE, THE VALUES OR GOODS RECEIVED BY THE WORKERS IN THE CONCEPTS AND AMOUNTS REFERRED TO ABOVE DO NOT CONSTITUTE INCOME FOR THE WORKERS, WHEN THE
EMPLOYERS ARE EXCLUDED IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 6 OF THIS ARTICLE. LAW, EVEN IF THEY DO NOT GENERATE INCOME FOR THE LATTER. (8) (14) (15)
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EXPENSES INCURRED BY THE TAXPAYER IN THE CONCEPTS REFERRED TO IN THE PREVIOUS, WITH THE VALUES OR ASSETS ASSIGNED TO THE WORKER,
MUST BE BACKED UP WITH THE DOCUMENTS THAT SET ARTICLES 107 OR 119 OF THE TAX CODE AS APPROPRIATE, AND CHECK THAT THEY SERVED TO FULFILL THEIR OBLIGATIONS. Labour.
(8) (14)
VALUES OR GOODS RECEIVED BY WORKERS FOR PURPOSES
OTHER THAN THOSE STIPULATED IN THIS NUMERAL CONSTITUTE INCOME OBTAINED FOR THEM, AND WILL ACCORDINGLY BE SUBJECT TO THE RESPECTIVE RETENTION TOGETHER WITH THE REMUNERATION RECEIVED. (8) (14)
2) THE VALUE OF GOODS WHICH BY CONCEPT OF LEGACIES OR INHERITANCES IS RECEIVED BY A TAXPAYER. (3)
3) THE VALUE OF THE GOODS WHICH, BY WAY OF DONATIONS, IS RECEIVED BY THE TAXPAYER; PERFORM BETWEEN
ASCENDANTS AND DESCENDANTS WITHIN THE SECOND DEGREE OF CONSANGUINITY AND SPOUSES. (3)
FOR THE PURPOSES OF THE ABOVE NUMBER, IT WILL BE CONSIDERED AS
THE PURCHASE VALUE OF THE DIFFERENT ASSETS OF THE MONEY, THE VALUE THAT THE GOODS HAD FOR THEIR PREDECESSOR AT THE DATE OF ENTRY TO THE EQUITY OF THE TAXABLE PERSON WHO RECEIVES THEM AND AS THE DATE OF ACQUISITION THE LATTER. IN THE EVENT THAT IT IS NOT POSSIBLE TO DETERMINE
THE REPORTED VALUE, THE TAXABLE PERSONS WILL VALUE IT AT THE MARKET PRICE, WHICH CAN BE CHECKED BY THE GENERAL DIRECTORATE OF INTERNAL TAXES. (18)
Non-taxable groping
Art. 4.-They are not taxable for this tax, and consequently are excluded from the
computation of the income obtained:
1) Those that by Legislative Decree or those coming from contracts approved by the Authority
Legislative by Decree is declared non-taxable;
2) The remuneration, compensation and representation expenses perceived in the
performance of their duties by diplomats, consular agents and other official representatives of countries foreign nationals who, with due authorization, reside in the Republic, temporarily or permanently all on condition of reciprocity;
WITHOUT PREJUDICE TO THE PROVISIONS OF THE FOREGOING PARAGRAPH, THE INCOME RECEIVED BY TAXABLE PERSONS, IN RESPECT OF PAYMENTS FOR SERVICES PROVIDED IN THE
SALVADOR TO A FOREIGN GOVERNMENT OR AGENCY INTERNATIONAL, THEY ARE SUBJECT TO THE TAX ESTABLISHED IN THIS LAW, EXCEPT FOR THOSE INCOME WHICH, BY EXPRESS MENTION IN AGREEMENTS SIGNED AND RATIFIED BY THE GOVERNMENT OF EL SALVADOR, ARE QUALIFIED AS NON-TAXABLE INCOME.
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EXEMPT. (8)
3) Compensation in the form of capital or income they are charged with death, incapacity, accident or illness, and are granted by court or private agreement.
SEVERANCE PAYMENTS AND VOLUNTARY RETIREMENT BONUSES, PROVIDED THEY DO NOT EXCEED A BASIC SALARY. THIRTY DAYS PER YEAR
SERVICE. FOR THESE PURPOSES, NO SALARY MAY BE HIGHER THAN THE AVERAGE WAGE OF THE ACCRUAL IN THE LAST TWELVE MONTHS, PROVIDED THAT THESE WAGES HAVE BEEN SUBJECT TO RETENTION. (8)
Retirement, pension or montepios, both civil as those that correspond to members of the Armed Forces.
It is taxable income for ordinary remunerations that are continued to be collected during sick leave or absences;
4) Remuneration, compensation and expenses representation perceived in the performance of their functions by natural persons Salvadoran foreign service officials or government employees;
5) INTERESTS, PRIZES AND OTHER UTILITIES THAT COME DIRECTLY FROM DEPOSITS IN FINANCIAL INSTITUTIONS SUPERVISED BY THE
SUPERINTENDENCE OF THE FINANCIAL SYSTEM, ASSOCIATIONS AND COOPERATIVE SOCIETIES OF SAVINGS AND CREDIT, AS WELL AS IN THEIR RESPECTIVE FEDERATIONS, PROVIDED THAT THE TAXABLE PERSON BENEFITED FROM THESE RENTS
SEA NATURAL PERSON DOMICILED DEPOSITS AND THE AVERAGE MONTHLY BALANCE OF DEPOSITS IS LESS THAN TWENTY-FIVE THOUSAND DOLLARS (US$ 25,000.00) FROM THE UNITED STATES OF AMERICA. (18)
6) The value of the lease that would produce the taxpayer's room house, the fifth or recreation house, or the property of the taxpayer, which the same Habite.
In general for these purposes no taxpayer will be able to deduct more than one room or recreation house;
7) AMOUNTS THAT FOR ANY CONCEPT AND IN THE CASE OF INSURANCE CONTRACTS, THE TAXPAYER IS PERCEIVED AS INSURED OR BENEFICIARY.
IN THE CASE OF PROVISION INSURANCE OR OTHER INSURANCE, WHERE THE COVERED RISK IS NOT RAISED AND THE STIPULATED PERIOD IS LESS THAN OR EQUAL TO FIVE YEARS,
THE VALUE RECEIVED SHALL BE TAXABLE INCOME.
THE SAME TAXABLE INCOME TREATMENT STIPULATED IN THE PRECEDING PARAGRAPH SHALL APPLY WHEN THE CONTRACTS HAVE BEEN AGREED FOR A LONGER TERM
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FIVE YEARS AND FOR ANY REASON BE LEFT WITHOUT EFFECT BEFORE THE FIVE-YEAR PERIOD WITHOUT THE RISK OF TAKING PLACE.
IN THE CASES ESTABLISHED IN THE PREVIOUS TWO CASES, THE CORRESPONDING DEDUCTIONS MUST BE MADE IN A PERCENTAGE OF 10%
OF THE AMOUNTS CREDITED OR PAID AND TO BE FOUND WITHIN THE RESPECTIVE LEGAL PERIOD. (14) (15)
8) REPEALED (12)
9) Awards granted by the Legislative Assembly for relevant services provided to
the Fatherland;
10) Prizes awarded to public workers for relevant services provided to
the Homeland in the performance of its functions;
11) INTEREST FROM CREDITS AWARDED ABROAD BY:
(a) INTERNATIONAL AGENCIES; FOREIGN GOVERNMENTS ' DEVELOPMENT AGENCIES OR INSTITUTIONS; GOVERNMENTS FOREIGNERS; AND CORPORATIONS OR PUBLIC UTILITY FOUNDATIONS DOMICILED IN
THE EXTERNAL DULY LEGALIZED BY COMPETENT AUTHORITIES OF THEIR COUNTRY OF ORIGIN WHOSE NON-PROFIT NATURE IS FOUND IN THEIR CONSTITUENT ACT AND QUALIFIED BY THE CENTRAL BANK OF
RESERVATION.
(b) INVESTMENT FUNDS, PRIVATE FUND MANAGERS, FUNDS
SPECIALISED PUBLIC OR PRIVATE, DOMICILED ABROAD, DULY LEGALIZED BY COMPETENT AUTHORITIES IN THEIR COUNTRY OF ORIGIN AND QUALIFIED BY THE BANK CENTRAL RESERVE,
INTENDED FOR COOPERATIVE ASSOCIATIONS OF SAVINGS AND CREDIT, CORPORATIONS AND FOUNDATIONS OF PUBLIC LAW AND PUBLIC UTILITY, THAT ARE DEDICATED TO THE GRANT OF FINANCING TO THE
MICRO AND SMALL ENTERPRISE.
THE GENERAL DIRECTORATE OF INTERNAL TAXATION AND THE RESERVE CENTRAL BANK,
TOGETHER, SHALL DRAW UP THE NECESSARY INSTRUMENT, WHICH SHALL INCLUDE THE PROCEDURE AND REQUIREMENTS TO ENSURE COMPLIANCE WITH THE PURPOSE OF THE REGULATED EXEMPTION. IN THIS NUMBER. (2) (18)
12) THE PRODUCT, GAIN, BENEFIT OR UTILITY OBTAINED BY A NATURAL PERSON IN THE SALE OF THEIR FIRST ROOM HOUSE AND THE VALUE OF
TRANSACTION IS NOT GREATER THAN SEVEN HUNDRED AND TWENTY-THREE MINIMUM WAGES, PROVIDED THAT IT IS NOT USUALLY DEDICATED TO THE PURCHASE AND SALE OF BUILDINGS. (2) (7) (8) (14) (18)
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13) REPEALED (8) (18) (19)
14) REPEALED (11) (18)
15) THAT THE TAX ADMINISTRATION BE GRANTED
OF THE TAX LOTTERY REFERRED TO IN ARTICLE 118 OF THE TAX CODE, THEREFORE, SUCH AWARDS WILL NOT BE SUBJECT TO WITHHOLDING TAX. (16)
TITLE II
ONLY CHAPTER
SUBJECTS
Liabilities to the Substantive Tax Obligation
Art. 5.-They are taxable persons or taxpayers and, therefore, obliged to pay the income tax, those who carry out the assumption laid down in Article 1 of this law, whether they are:
a) of natural or legal persons domiciled or not;
b) of the succession and trusts domiciled or not in the country;
c) of the artists, sportsmen or the like domiciled or not in the country, whether they are presented individually as natural persons or grouped in (d) IRREGULAR OR DE FACTO SOCIETIES AND THE UNION OF PERSONS
(18)
For the purposes of this law, it is understood as a whole, any grouping of natural persons, not domiciled, regardless of the organization that they adopt, whether legal or in fact, that they enter the country in a temporary way and with any of the purposes listed in the preceding paragraph.
FOR THE PURPOSES OF THIS LAW, IT SHALL BE COMPRISED OF RELATED SUBJECTS; COUNTRIES, STATES OR TERRITORIES WITH PREFERENTIAL TAX REGIMES OF LOW OR ZERO TAXATION
OR HAVENS PROSECUTORS, REGULATED IN THE TAX CODE. (18)
Exclusion of passive subjects
Art. 6.-They are not subject to payment of this tax:
a) The State of El Salvador;
b) Municipalities; and
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c) Public law corporations and foundations and corporations and public utility foundations.
Public utility corporations and non-profit foundations, constituted for social assistance purposes, promotion of road construction, charity, charity, education and
instruction, cultural, scientific, literary, artistic, political, union; professionals, trade unions and sports professionals provided that the income they obtain and their assets are exclusively used for the purposes of the institution and in no case are distributed directly or indirectly among the members that the
integrate.
The non-subjection of public utility corporations and foundations must be qualified
previously by the General Directorate of Internal Revenue and will be revoked by the same when it is verified that the previous requirements.
REPEALED FINAL (8) (12)
Formal Required
Art. 7.-REPEALED (12)
Responsible for compliance with the substantive and formal tax obligation
Art. 8.-REPEALED (12)
Home Subjects
Art. 9.-REPEALED (12)
Non-domiciled Subjects
Art. 10.-REPEALED (12)
Legal Person Address
Art. 11.-REPEALED (12)
TITLE III
UNIQUE CHAPTER
DETERMINATION OF EARNED INCOME
Income Determination Obtained
Art. 12.-The income obtained will be determined by adding the total products or utilities of the various sources of income of the taxable person.
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Enforcement exercise
Art. 13.-For the purposes of the tax calculation:
a) The income obtained shall be computed for periods of twelve months, which shall be referred to as
tax years.
Natural and legal persons shall have an exercise of taxation. that will begin the
first of January and end the thirty-one of December.
b) When the subject will cease to exist or will definitely withdraw from the country
ending its economic activities in it, before the end of the the tax year for which the income tax is to be settled; corresponds to that obtained in that period;
c) The income is presumed to have been obtained at midnight on the day of the end of the corresponding financial year or period of taxation;
d) Each financial year or period of taxation shall be settled in a manner independent of the preceding and following, so that profit or loss results cannot be affected by prior or subsequent events in the business or activities of
taxpayer, except for legal exceptions.
Capital Gain
Art. 14.-The gain obtained by a natural or legal person who is not habitually engaged in the sale, swap or other form of negotiations on movable or immovable property, constitutes
capital gain and shall be taxed in accordance with the following rules:
1) In each transaction the capital gain or loss will be determined by deducting the value
from the transaction, the basic cost of the good, the amount of the improvements made to preserve its value and that of the expenses required to perform the transaction. When the value of the transaction is greater than the deductions, there will be capital gain. If the
deductions are greater than the transaction value, there will be capital loss. Improvements shall be considered to be all improvements, extensions and other investments that significantly prolong the life of the good, involve an extension of the constitution
or raise its value, provided that such investments have not been admitted as production costs of their income or conservation of their source;
2) THE LOSS OF CAPITAL COMING FROM THE TRANSACTIONS REFERRED TO IN THE FIRST PARAGRAPH OF THIS ARTICLE SHALL BE DEDUCTIBLE FROM THE PROFIT OF CAPITAL. IF THE GAIN EXCEEDS THE LOSS, THE SURPLUS, OR PROFIT
NET OF CAPITAL, WILL BE TAXED IN ACCORDANCE WITH ARTICLE 42 OF THIS LAW. IN CASE THE LOSS EXCEEDS THE GAIN, THE BALANCE MAY BE USED WITHIN THE FOLLOWING FIVE YEARS AGAINST FUTURE CAPITAL GAINS, PROVIDED THAT IT IS DECLARED ON THE FORM THAT FOR
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THIS EFFECT PROVIDES THE TAX ADMINISTRATION. IN NO EVENT WILL IT BE DEDUCTIBLE FROM THE CAPITAL GAIN, CAPITAL LOSSES COMING
FROM TRANSACTIONS OTHER THAN THE ONE REGULATED IN THIS ARTICLE; (14)
3) The basic cost of movable and immovable property will be determined in the case that it is
acquired for consideration by deducting from the acquisition cost the depreciations that have been made and admitted according to the law.
The basic cost of goods purchased by donation or inheritance will be the basic cost of the donor or causative.
SETTLEMENT OF EXTRAORDINARY ASSETS AS REFERRED TO IN THE LAW OF BANKS IT MUST BE TAXED AS AN ORDINARY INCOME IN THE SAME TAX YEAR. THE SAME TREATMENT WILL HAVE THE ASSETS HELD BY
INSURANCE COMPANIES, OFFICIAL CREDIT INSTITUTIONS AND NON-BANK FINANCIAL INTERMEDIARIES. (14)
INCOME FROM SECURITIES SECURITIES (18)
Art. 14-A.-PROFITS, DIVIDENDS, PRIZES, INTEREST, INCOME, NET CAPITAL GAINS OR ANY OTHER BENEFIT OBTAINED BY A NATURAL PERSON DOMICILED,
IN INVESTMENTS OF SECURITIES SECURITIES AND OTHER FINANCIAL INSTRUMENTS, SHALL BE TAXED WITH THE TAX ESTABLISHED IN THIS LAW AT A RATE OF TEN PERCENT, WHICH WILL BE SETTLED SEPARATELY FROM THE OTHER INCOME; IF THE AFOREMENTIONED INCOME WAS MADE
THE RESPECTIVE DEDUCTIONS, THEY MUST NOT BE DECLARED, CONSTITUTING THE WITHHOLDING OF THE TAX.
THE TAX SHALL BE PAID WITHIN THE SAME PERIOD IN WHICH THE TAXABLE PERSON IS REQUIRED TO SUBMIT THE INCOME TAX AFFIDAVIT OF THE CORRESPONDING FINANCIAL YEAR OR PERIOD OF TAXATION, WITH THE CALCULATION OF THE TAX BEING ATTACHED TO THAT DECLARATION.
CAPITAL INCOME, WHICH MUST BE FILLED WITH THE REQUIREMENTS AND SPECIFICATIONS THAT THE GENERAL DIRECTORATE OF INTERNAL TAXATION HAS.
WHEN THE INCOME COMES FROM THE TRANSFER OR TRANSFER OF ONE OR MORE SECURITIES SECURITIES, TO DETERMINE THE OUTCOME, THE VALUE OF THE TRANSACTION WILL BE DECREASED, THE COST OF SUCH SECURITIES, SUBJECT TO THE FOLLOWING RULES:
a) TRANSACTION VALUE SHALL BE THE PRICE AGREED BY THE PARTIES, WHICH MAY NOT BE LESS THAN THE PRICE OF THE STOCK EXCHANGE LISTING THE
DATE OF DISPOSAL, OR THE BOOK VALUE OF THE ISSUER OF THE TITLE IF THERE IS NO PRICE STOCK EXCHANGE LISTING;
b) AMOUNTS TO BE DEDUCTED FROM THE TRANSACTION VALUE SHALL BE THE COST OF ACQUIRING THE TITLE PLUS THE EXPENSES NECESSARY TO CARRY OUT THE TRANSACTION. IF MULTIPLE TITLES ARE HELD, THE ACQUISITION COST WILL BE DETERMINED BASED ON WEIGHTED AVERAGES, DIVIDING THE SUMMARY
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OF THE COSTS OF ACQUIRING THE TITLES AMONG THE TOTAL NUMBER OF TITLES ACQUIRED, EVEN IF ONLY A PART OF THEM IS SOLD. THE PROMEDIUM
WILL BE APPLIED FOR TITLES OF THE SAME SPECIES; and,
c) IF THE RESULT IS POSITIVE IT SHALL CONSTITUTE CAPITAL GAIN, AND IF ANY
NEGATIVE SHALL CONSTITUTE LOSS OF CAPITAL, WHICH MAY ONLY BE COMPENSATED BY PROFIT OF CAPITAL OF SECURITIES OR OTHER ASSETS, OBTAINED IN THE FINANCIAL YEAR OR PERIOD OF TAXATION IN WHICH THE LOSSES OCCURRED
OR IN THE FOLLOWING FIVE IMMEDIATE YEARS, PROVIDED THAT THE LOSS HAS BEEN DECLARED AND RECORDED.
THE RULES OF THE PREVIOUS PARAGRAPH REGARDING THE CAPITAL GAIN OF SECURITIES SECURITIES ARE ALSO APPLICABLE TO TAXABLE PERSONS OTHER THAN NATURAL PERSONS.
DIVIDENDS WILL NOT BE SUBJECT TO TAXES THAT ARE FRAMED IN THE ARTICLE 4 NUMBER 13 OF THIS LAW.
WHEN RENTS COME FROM SECURITIES AND OTHER FINANCIAL INSTRUMENTS ABROAD AND ARE NOMINALLY OBTAINED BY SALVADORAN INDIVIDUALS DOMICILED IN THE COUNTRY, THEY WILL BE TAXED, AND MUST BE OBSERVED IN SUCH A WAY. CASE THE SAME RULES SET OUT IN Art. 27 OF THIS LAW.
FOREIGN-GENERATED CAPITAL LOSSES FROM SECURITIES TRANSACTIONS, NOMINALLY, WILL BE DEDUCTIBLE FROM CAPITAL GAINS OBTAINED
IN THE REFERENCED TRANSACTIONS ABROAD, WITHOUT PREJUDICE OF THE RULES OF NON-DEDUCTIBILITY ESTABLISHED IN THIS LAW.
IF THE LOSS OF CAPITAL GENERATED ABROAD EXCEEDS THE CAPITAL GAIN OBTAINED ABROAD, THE BALANCE MAY BE USED WITHIN THE FOLLOWING FIVE YEARS AGAINST FUTURE CAPITAL GAINS EARNED ABROAD, PROVIDED THAT
IS DECLARED IN THE FORM THAT FOR THAT PURPOSE PROVIDES THE GENERAL ADDRESS OF INTERNAL TAXES. (18)
Art. 15.-REPEALED (2) (14)
Rents obtained in El Salvador
Art. 16.-REVENUES OBTAINED IN EL SALVADOR ARE REPUTED TO BE DERIVED FROM GOODS LOCATED IN THE COUNTRY, AS WELL AS FROM ACTIVITIES CARRIED OUT OR FROM CAPITAL INVESTED IN
THE SAME, AND SERVICES PROVIDED OR USED IN THE NATIONAL TERRITORY, ALTHOUGH ARE RECEIVED OR PAID OUT OF THE REPUBLIC. (14)
THE INCOME FROM SERVICES THAT ARE USED IN THE COUNTRY, WILL CONSTITUTE INCOME OBTAINED IN EL SALVADOR FOR THE SERVICE PROVIDER, REGARDLESS THAT THE ACTIVITY THAT ORIGINATES IT IS CARRIED OUT ABROAD. (14)
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INCOME EARNED IN EL SALVADOR WILL BE EARNED FROM THE PROPERTY INDUSTRIAL, INTELLECTUAL AND OTHER SIMILAR AND ECONOMIC RIGHTS
AUTHORIZE THE EXERCISE OF CERTAIN ACTIVITIES AGREED UPON BY LAW, IF THEY ARE OFFICIALLY REGISTERED IN THE COUNTRY OR IF THEY ARE USED IN THE COUNTRY. (14)
INCOME, PROFIT, INCOME OR INTEREST ARISING FROM RIGHTS AND OBLIGATIONS ARISING FROM SECURITIES, FINANCIAL INSTRUMENTS AND DERIVATIVE CONTRACTS, WHEN THEY OCCUR, IS CONSIDERED AS INCOME OBTAINED IN EL SALVADOR
.ANY OF THE FOLLOWING CIRCUMSTANCES: (18)
(a) THE ISSUING ENTITY IS A NATIONAL OR A RESIDENT IN EL SALVADOR; (18)
(b) THE CAPITAL IS INVESTED OR PLACED IN THE COUNTRY; AND, (18)
(c) THE ASSUMED RISK IS FOUND LOCATED OR LOCATED IN THE SALVADORAN TERRITORY. (18)
THE LOCATION OR LOCATION WILL ALSO BE CONSIDERED TO BE CONFIGURED IF THE SUBJECT WHO OBTAINS SUCH RESULTS OR RETURNS IS A RESIDENT IN THE COUNTRY OR AN ESTABLISHMENT OR BRANCH DOMICILED FOR TAX PURPOSES. (18)
ALSO, REVENUES OBTAINED IN THE COUNTRY, THE REMUNERATION OF THE GOVERNMENT, THE MUNICIPALITIES AND THE OTHER OFFICIAL ENTITIES THAT PAY THEIR SALVADORAN OFFICIALS OR EMPLOYEES ABROAD ARE REPUDIATED. (14)
WITHOUT PREJUDICE TO THE FOREGOING, NON-TAXABLE INCOME, EXEMPT OR NON-TAXABLE INCOME THAT THEY OBTAIN IN ANOTHER COUNTRY, STATE OR TERRITORY, PEOPLE,
TRUSTS AND SUCCESSIONS, SALVADORAN DOMICILED IN EL SALVADOR FOR LOANS OR FINANCING GRANTED TO PERSONS, TRUSTS OR SUCCESSIONS LOCATED ABROAD, INCOME TAXED IN THE COUNTRY SHALL BE CONSIDERED, AND THE NET INCOME RESULTING FROM THAT INCOME,
MUST BE ADDED TO THE NET INCOME OR TAXABLE INCOME OBTAINED IN THE TERRITORY OF THE REPUBLIC OF EL SALVADOR AND PAY THE RESPECTIVE TAX. (14)
Natural People
Art. 17.-Natural persons shall compute their income using the cash method, that is,
taking into account the products or utilities actually perceived in the financial year, whether in cash, securities or in kind.
where the products or utilities have not been charged in cash, securities or in kind, the taxpayer is deemed to have received them as long as they have been available to them, and in general, when the taxpayer have disposed of them in any
shape.
In the same way, the computable discharges will be the ones actually paid during the exercise.
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THE NATURAL PERSON REQUIRED TO KEEP ACCOUNTING, SHALL USE FOR THE COMPUTATION OF THEIR INCOME, THE SYSTEM OF CUMULATION APPLICABLE TO LEGAL PERSONS. THE
NATURAL PERSONS WHO ARE NOT REQUIRED TO CARRY OUT FORMAL ACCOUNTING, MAY CHOOSE TO USE THE SYSTEM OF ACCUMULATION FOR THE CALCULATION OF THEIR INCOME; FOR WHICH THEY WILL RECORD THE OPERATIONS IN AUXILIARY ACCOUNTING RECORDS AND THEY SHALL INFORM
THE GENERAL DIRECTORATE OF INTERNAL TAXATION IN THE MONTHS OF NOVEMBER AND DECEMBER OF THE EXERCISE OF TAXATION PRIOR TO THE FINANCIAL YEAR IN WHICH IT SHALL BE ADOPTED. ADOPTED THE ACCUMULATION SYSTEM CANNOT BE CHANGED. (18)
Legal User Rents
Art. 18.-Parents shall add to their personal income, in equal parts or according to the case, according to the common law, the legal usufruct of the unemancipated son.
The minor subject to guardianship or curatela by means of testamentaria or The Court of Justice shall individually compute its income. In the case of a judicial provision, the private parents of the legal usufruct will not add to their own income those of the unemancipated son.
The above provisions do not operate in case of renunciation of the legal usufruct by the usufrucario, whose effectiveness has been checked by the Internal Revenue Directorate.
Death
Art. 19.-In the event of death, the income obtained shall be computed from the day on which the tax year was started
until the day of death.
Successions
Art. 20.-Succession shall compute the income obtained from the day following its opening, up to that of the acceptance of the inheritance.
The income obtained shall be computed in accordance with the maturity of the exercise of taxation. Thus, if, at the end of the year in which the succession was opened, there has not yet been an acceptance of the inheritance, it must be
to calculate the income obtained from the day following that of the opening to the date of termination of the financial year.
The income obtained by successive and accepted successions within the same tax year and before the end of the same period shall be computed for the period in which they have remained open. If the succession is accepted in the exercise following its opening, it will be declared
from the first of January of that year to the date of the acceptance of the inheritance.
If the inheritance is not accepted over several years exercises, the first period will be computed
in the form indicated in the second paragraph of this article, and then for each complete exercise that passes without acceptance. When the inheritance is accepted, it will be computed from the first day of the exercise in which it is accepted until the date of acceptance.
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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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14
In others, they must be subject to the form of computing the income of persons
Heirs of heirs
Art. 21.-The inheritance, the heirs and the legacies will add to their own income the part
proportional that according to their rights it corresponds to them, in the income that generates the following day to the day after the date of the acceptance or delivery in your case.
Trusts
Art. 22.-The rent obtained by the trust will be computed as well as the income of the people
natural.
The income obtained from its constitution shall be computed up to the due date of the
ordinary exercise of taxation.
When the trust is extinguished, the income obtained in the period shall be calculated understood
from the date the enforcement exercise began to the date of its extinction.
Sets
Art. 23.-The income obtained by the artistic, cultural, sports and similar sets, not domiciled, will be computed using natural persons, the cash system adding the total of the income obtained by its members, and considering to the set as a single subject.
Legal persons
Art. 24. LEGAL PERSONS SHALL USE THE SYSTEM OF ACCUMULATION, THAT IS, DETERMINE THEIR INCOME BY TAKING INTO ACCOUNT THE ACCRUALS IN THE FINANCIAL YEAR, EVEN IF THEY ARE NOT RECEIVED, AND THE COSTS OR EXPENSES INCURRED EVEN IF THEY HAVE NOT BEEN PAID,
IN THIS LAST CASE, SHOULD ALWAYS BE OBSERVED, THE PROVISIONS OF THE TAX LAWS FOR THE ORIGIN OF THEIR DEDUCTIBILITY. (14)
Partner or shareholder income
Art. 25.-The partner or shareholder of companies, when determining their income obtained, must understand
also the profits actually received.
LOANS THAT THE COMPANY GRANTS TO SHAREHOLDERS OR PARTNERS, OR TO ITS
FAMILY MEMBERS WITHIN OF THE FOUR DEGREE OF CONSANGUINITY OR SECOND OF AFFINITY, THEY WILL BE CONSIDERED AS DISTRIBUTED DIVIDENDS, EXCEPT THAT THE COMPANY WOULD BE A BANK. (8)
THE LOANS THAT THE COMPANY GRANTS TO THE SHAREHOLDERS OR MEMBERS, TO THE SPOUSE OF THESE OR TO THEIR RELATIVES WITHIN THE FOURTH DEGREE OF CONSANGUINITY OR SECOND DEGREE OF AFFINITY, THEY WILL BE CONSIDERED TO BE TAXABLE INCOME, EXCEPT THAT THE LENDER
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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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15
BE A BANK, OR OTHER TYPE OF PUBLIC OR PRIVATE ENTITY THAT IS USUALLY DEDICATED TO THE GRANTING OF CREDITS. (10)
Art. 26.-REPEALED (8) (19)
DEPOSITS FROM DEPOSITS (18)
Art. 27.-NATURAL PERSONS WHO OBTAIN INTEREST INCOME, PRIZES AND
OTHER PROFITS THAT COME DIRECTLY FROM DEPOSITS IN FINANCIAL INSTITUTIONS SUPERVISED BY THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM, COOPERATIVE ASSOCIATIONS O COOPERATIVE SOCIETIES OF SAVINGS AND CREDIT, AS WELL AS IN THEIR RESPECTIVE
FEDERATIONS, DOMICILED IN THE COUNTRY, ARE OBLIGED TO PAY TEN PERCENT OF THE INCOME TAX; WHICH WILL BE SETTLED SEPARATELY FROM THE OTHER INCOME; IF A THE RESPECTIVE RENTS WERE MADE TO THE RESPECTIVE RETENTIONS ACCORDING TO THE
GOVERNED BY ARTICLE 159 OF THE TAX CODE, THEY MUST NOT BE DECLARED, CONSTITUTING THE WITHHOLDING TAX PAID.
NATURAL PERSONS DOMICILED IN EL SALVADOR SHALL DECLARE IN THE REPUBLIC OF EL SALVADOR THE INCOME THEY OBTAIN FROM DEPOSITS IN FINANCIAL INSTITUTIONS ABROAD, EVEN IF THEY HAVE PAID INCOME TAX OR OTHER TAX OF THE SAME NATURE IN THE COUNTRY, STATE OR TERRITORY IN WHICH IT OBTAINED THEM; OF NO
HAVING PAID TAXES ABROAD, WILL HAVE TO PAY TEN PERCENT IN THE REPUBLIC OF EL SALVADOR. IF THE RATE OF THE TAX REFERRED TO OR ITS SHARE PAID ABROAD, IS LESS THAN THE RATE OF TEN PERCENT, THE DIFFERENCE SHOULD BE APPLIED TO THOSE RENTS
OF RATE AND PAY THE CORRESPONDING TAX WITHIN THE LEGAL PERIOD. IT WILL NOT BE SUBJECT TO REFUND, CREDIT OR DEDUCTION OF THE TAX PAID ABROAD IN EXCESS OF THE SALVADORAN RATE.
SALVADORAN TAXABLE PERSONS OTHER THAN NATURAL PERSONS SHOULD ALSO DECLARE THE INCOME IN THE REPUBLIC OF EL SALVADOR TO BE OBTAINED BY DEPOSITS
IN FINANCIAL INSTITUTIONS ABROAD, EVEN THOUGH THEY HAVE PAID INCOME TAX OR OTHER TAX OF THE SAME NATURE IN THE COUNTRY, STATE OR TERRITORY IN WHICH IT WAS OBTAINED AND PROCEED AS FOLLOWS:
(a) IF THE APPLICABLE RATE ON THE OUTSIDE OF THE DEPOSIT INCOME IS LESS THAN THE ORDINARY RATE REGULATED IN THE REPUBLIC OF EL SALVADOR,
SUCH INCOME SHALL BE INCLUDED IN THE CALCULATION OF THE TAX ON THE INCOME, AND DEDUCT THE TOTAL OR PROPORTIONAL TAX, CORRESPONDING EXCLUSIVELY TO THE SAME, THAT WOULD HAVE BEEN CANCELLED, TO THE effect OF
PAYING THE TAX FOR THE DIFFERENCE OF THE RATE.
(b) IF THE INCOME FROM DEPOSITS HELD ABROAD IS THE QUALITY
OF NOT SUBJECT, EXEMPT OR UNTAXED, THE NET INCOME RESULTING THEREFROM, SHALL BE ADDED TO THE NET INCOME OR TAXABLE INCOME OBTAINED IN THE TERRITORY OF THE REPUBLIC OF EL SALVADOR AND PAY THE RESPECTIVE TAX.
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16
c) IF THE REGULATED RATE ON THE OUTSIDE IS EQUAL TO OR GREATER THAN THE RATE APPLICABLE IN THE REPUBLIC OF EL SALVADOR, THE INCOME
FROM DEPOSITS REFERRED TO IN THIS PARAGRAPH SHALL NOT BE INCLUDED FOR THE CALCULATION OF INCOME TAX; IN SUCH CASE, THE INCOME SHALL BE DECLARED ONLY WITHIN THE LEGAL PERIOD AS NON-TAXABLE INCOME.
THE SALVADORAN TAXABLE PERSON TO CHECK THE AMOUNT OF THE PAYMENT OF THE TAX ABROAD, WILL BE OBLIGED TO PRESENT TO THE TAX ADMINISTRATION THE
DOCUMENT THAT HAS ISSUED TO HIM IN ATTENTION TO THE LEGISLATION OF THE COUNTRY OF THE EXTERIOR IN WHICH YOU MADE THE PAYMENT.
THE UNIT OF FINANCIAL INVESTIGATION ATTACHED TO THE ATTORNEY GENERAL OF THE REPUBLIC, SHALL INFORM THE GENERAL DIRECTORATE OF INTERNAL TAXES MONTHLY OF THE DATA OF IDENTIFICATION OF THE SUBJECTS AND OF THE TRANSACTIONS ORIGINATING FROM THE EXTERIOR,
OBTAINED IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 13 OF THE ANTI-MONEY AND ASSET LAUNDERING ACT, IN ANY ELECTRONIC MEANS. (2) (8) (18)
TITLE IV
SINGLE NET INCOME DETERMINATION
NET INCOME
ART. 28.-THE NET INCOME SHALL BE DETERMINED BY DEDUCTING FROM THE INCOME OBTAINED THE COSTS AND EXPENSES NECESSARY FOR THE PRODUCTION OF THE INCOME AND FOR THE CONSERVATION OF ITS SOURCE THAT THIS LAW DETERMINES, AS WELL AS THE DEDUCTIONS THAT IT ESTABLISHES.
IN ANY CASE, COSTS AND EXPENSES AND OTHER DEDUCTIONS MUST MEET ALL THE REQUIREMENTS THAT THIS LAW AND THE TAX CODE STIPULATE FOR YOUR
DEDUCTIBILITY.
COSTS AND EXPENSES INCURRED IN RELATION TO
WILL NOT BE DEDUCTIBLE IN ANY CASE FOR NON-TAXABLE INCOME OR INCOME FOR THE PURPOSES OF THIS LAW.
FOR THE PURPOSES OF THE FOREGOING PARAGRAPH, THE COSTS AND EXPENSES THAT HAVE AN EFFECT ON THE INCOME GENERATED BY TAXED INCOME, AS WELL AS THOSE THAT AFFECT UNTAXED INCOME, AND THOSE THAT DO NOT CONSTITUTE INCOME IN ACCORDANCE WITH THE LAW MUST
BE PROVIDED, BASED ON A FACTOR TO BE DETERMINED BY DIVIDING THE INCOME TAXED BETWEEN THE SUM OF THE TAXED INCOME, NOT TAXED, OR THAT DO NOT CONSTITUTE INCOME ACCORDING TO THE LAW, AND ONLY THE PROPORTION MUST BE DEDUCTED
CORRESPONDING TO THE TAXED. (8) (14)
general Deductions
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17
Art. 29.-INCOME DEDUCTIBLES OBTAINED:
Business Expenses
1) THE NECESSARY AND OWN EXPENSES OF THE BUSINESS, INTENDED EXCLUSIVELY
FOR THE PURPOSES OF THE BUSINESS, SUCH AS FREIGHT AND CARRY-OUT COSTS, LA PROPAGANDA, BOOKS, PRINTED, NOTICES, CORRESPONDENCE, DESK, ELECTRICAL, TELEPHONE AND OTHER SIMILAR EXPENSES. (14)
ARE NOT INCLUDED WITHIN THIS RUBRIC THE DISBURSEMENTS THAT ARE OFFERED TO CUSTOMERS AND EMPLOYEES AND OTHER EXPENSES OF A SIMILAR NATURE,
SUCH AS AIR TICKETS, CABLE SERVICES, CLUB FEES, JEWELRY, CLOTHING, WHICH ARE NOT NECESSARY FOR THE PRODUCTION OF THE INCOME OR THE PRESERVATION OF ITS SOURCE. (18)
remunerations
2) AMOUNTS PAID IN THE FORM OF WAGES, SALARIES, BONUSES, ALLOWANCES, FEES, FEES, BONUSES, BONUSES, AND OTHER REMUNERATION OR COMPENSATION FOR THE SERVICES PROVIDED DIRECTLY IN THE PRODUCTION OF THE TAXED INCOME, AS LONG AS THEY HAVE BEEN
REALIZED AND LEARNED THE CORRESPONDING SOCIAL SECURITY, PRE-VISIONARY AND INCOME TAX DEDUCTIONS WHEN THEY ARE SUBJECT TO IT ACCORDING TO THE LAW RESPECTIVE.
AMOUNTS PAID FOR SEVERANCE PAY AND VOLUNTARY RETIREMENT BONUSES, IN COMPLIANCE WITH
ARTICLE 4 NUMERAL 3), SECOND PARAGRAPH OF THIS LAW; AS WELL AS INDEMNITIES FOR DEATH, ACCIDENT, DISABILITY OR ILLNESS.
WHEN PAYMENTS ARE MADE IN ANY OF THE CONCEPTS CITED IN THIS NUMERAL TO RELATIVES OF THE TAXPAYER WITHIN THE FOURTH GRADE
OF CONSANGUINITY OR SECOND OF AFFINITY, TO YOUR SPOUSE, PARTNER OR LIFE PARTNER. OF THE ABOVE REQUIREMENTS AND THOSE THAT THE TAX LAW ESTABLISHES FOR THE PROVENANCE OF THE DEDUCTION, SE
WILL REQUIRE THE TAXPAYER TO VERIFY THAT THE WORK DONE HAS BEEN NECESSARY FOR THE GENERATION OF THE INCOME OR CONSERVATION OF THE SOURCE AND WHAT HAS ACTUALLY BEEN DONE.
THE PROVISIONS OF THE FOREGOING PARAGRAPH ALSO APPLY TO PAYMENTS MADE TO LEGAL REPRESENTATIVES, DIRECTORS, ADVISORS,
PROXIES AND SHAREHOLDERS OF LEGAL PERSONS, AS WELL AS TO MEMBERS OF PERSONS. (8) (14)
OUTBOUND AND VIATIC TRAVEL EXPENSES WITHIN THE COUNTRY (14)
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18
3) THE COST OF PASSAGES, PLUS THE VALUE OF TAXES AND PORT RIGHTS CORRESPONDING PAID BY THE EMPLOYER, AS WELL AS THE
EXPENSES FOR FEEDING AND LODGING VERIFIABLE DOCUMENTS, STRICTLY LINKED TO TRIPS CARRIED OUT IN ACTIVITIES OF THE BUSINESS.
THE DEDUCTION REFERRED TO IN THIS NUMBER IS ONLY FROM THE TAXPAYER, ITS LEGAL REPRESENTATIVE OR
EMPLOYEES OF THE TAXPAYER, WHOSE EMPLOYMENT DEPENDENCY LINK IN THE BUSINESS IT CAN BE CHECKED.
ALSO DEDUCTIBLES ARE THE PAYMENTS MADE IN THE CONCEPT OF VIATICS IN THE TERMS AND UNDER THE SCOPE PROVIDED FOR IN ARTICLE 3 NUMERAL 1) OF THIS LAW, FOR JOURNEYS MADE WITHIN THE TERRITORY OF THE REPUBLIC
OF THE SALVADOR. (14)
Leases
4) THE LEASE PRICE OF MOVABLE OR IMMOVABLE PROPERTY, USED DIRECTLY IN THE PRODUCTION OF COMPUTER REVENUE, SUCH AS TOOLS, MACHINERY, OFFICE PREMISES, STORAGE, WAREHOUSES,
FACTORIES, LANDS, FORESTS, AND OTHER LEASES AIMED DIRECTLY AT THE PRODUCTION OF COMPUTER REVENUE. (14)
DEDUCTION FOR THIS CONCEPT SHALL BE MADE IN PROPORTION TO THE TIME THE LEASED GOODS HAVE BEEN USED IN THE PRODUCTION OF TAXED INCOME, WITH THE EXCEPTION THAT THEIR USE IS FOR ACTIVITIES
SEASONAL. (18)
Insurance Prims
5) THE INSURANCE PREMIUMS TAKEN AGAINST THE RISKS OF THE PROPERTY OF YOUR PROPERTY, USED FOR THE PRODUCTION OF TAXABLE INCOME, SUCH AS
MERCHANDISE INSURANCE, TRANSPORTATION, BUSINESS LOSS. (14)
DEALING WITH TAXABLE PERSONS NATURAL PERSONS, THIS DEDUCTION ONLY
WILL BE ACCEPTED UP TO 50% OF THE RESPECTIVE PREMIUM, WHEN THE ROOM HOUSE OWNED BY THE TAXABLE PERSON IS INSURED, AND IS PARTIALLY USED FOR THE ESTABLISHMENT OF THE COMPANY OR OFFICE
DIRECTLY RELATED TO OBTAINING THE INCOME. (18)
Social security taxes and contributions
6) TAXES, FEES AND SPECIAL CONTRIBUTIONS, TAX AND MUNICIPAL WHO ARE RESPONSIBLE FOR THE IMPORTATION OF THE GOODS AND SERVICES PROVIDED BY THE UNDERTAKING OR WHICH ARE TAXED THE SOURCE OF INCOME, ALWAYS
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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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19
WHICH HAVE BEEN CAUSED AND PAID DURING THE CORRESPONDING TAX YEAR, EXCEPT THOSE CORRESPONDING TO THE MONTH OF DECEMBER OF EACH
YEAR IN RESPECT OF WHICH, IN ADDITION TO HAVING BEEN CAUSED, THE PAYMENT MADE WITHIN THE PERIOD PRESCRIBED BY THE LAWS SHALL BE CHECKED BY THE TAXPAYER.
INCOME TAX, THE TAX ON THE TRANSFER OF MOVABLE PROPERTY AND THE PROVISION OF
SERVICES ARE NOT INCLUDED IN THIS PROVISION, WITHOUT PREJUDICE TO THE PROVISIONS OF ARTICLE 70 OF THE LAW GOVERNING THE LAST TAX CITED, THE TAX ON THE TRANSFER OF REAL ESTATE AND THE FINES, SURCHARGES AND INTEREST INCURRED IN RESPECT OF
ANY TAX OR MUNICIPAL CONTRIBUTION. (5) (8) (14)
DEDUCTION FOR EMPLOYEES WHO LIQUIDATE OR NOT TAX (14)
7) NATURAL PERSONS WHOSE INCOME IS DERIVED EXCLUSIVELY FROM WAGES AND WHOSE AMOUNT IS EQUAL TO OR LESS THAN US$ 9,100.00, WILL NOT BE
REQUIRED TO FILE SETTLEMENT AND WILL BE ENTITLED TO A FIXED DEDUCTION OF US$ 1,600.00, WHICH WILL NOT BE SUBJECT TO VERIFICATION. THE FIXED DEDUCTION AND SOCIAL SECURITY CONTRIBUTIONS SHALL BE INCLUDED IN THE WITHHOLDING FEE TO WHICH THEY ARE AFFECTED.
SALARIED NATURAL PERSONS, WITH INCOME GREATER THAN US$ 9,100.00, WILL BE ENTITLED TO THE DEDUCTIONS SET OUT IN ARTICLES 32 AND 33
OF THIS LAW, WHICH SHALL BE SUBJECT TO VERIFICATION. (2) (14) (19)
8)
AMOUNT OF FUEL FOR MACHINERY, TRANSPORT OFLOAD AND WORK EQUIPMENT THAT IS NOT PART OF THE COST AS PROVIDED FOR IN THE NUMERAL 11 OF THIS ARTICLE, VEHICLES OF DISTRIBUTION, OF COLLECTIVE TRANSPORT OF PERSONNEL, THOSE WHO USE THEIR
VENDORS, VEHICLES OF THE REALISABLE ASSET, PROVIDED THAT SUCH GOODS ARE USED DIRECTLY IN THE GENERATION OF THE INCOME AND THAT THE EROGIATIONS ARE DULY CHECKED BY INVOICE OR
TAX CREDIT VOUCHER IN THE NAME OF TAXPAYER. (14)
Maintenance
9) EXPENSES FOR ORDINARY REPAIRS, OR WHICH ARE
ERODES TO MAINTAIN IN GOOD WORKING, SERVICE OR PRODUCTION CONDITIONS THE GOODS OF THE TAXPAYER EMPLOYED DIRECTLY ON OBTAINING THE INCOME OBTAINED.
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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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20
THESE EXPENSES WILL BE DEDUCTIBLE AS LONG AS THEY DO NOT INVOLVE A REMODELING, OR A EXTENDING THE ORIGINAL STRUCTURE OF THE GOODS,
INCREASING THEIR VALUE OR PROLONGING THEIR LIVES. (14) Interest
10) INTEREST PAID OR INCURRED, AS THE CASE MAY BE, FOR AMOUNTS TAKEN ON LOAN AS LONG AS THEY ARE INVESTED IN THE TAXABLE INCOME GENERATING SOURCE, AS WELL AS EXPENSES INCURRED IN THE
CONSTITUTION, RENEWAL OR CANCELLATION OF SUCH LOANS, WHICH SHALL BE DEDUCTED IN PROPORTION TO THE AGREED PERIOD FOR THE PAYMENT OF THE FINANCING.
INTEREST THAT IS COMPUTED ON THE CAPITAL OR ON PROFITS INVESTED IN THE BUSINESS WITH THE OBJECT OF DETERMINING
COSTS OR OTHER PURPOSES WHEN THEY DO NOT REPRESENT CHARGES IN FAVOR OF THIRD PARTIES SHALL NOT BE DEDUCTIBLE.
INTEREST IS ALSO NOT DEDUCTIBLE AS LONG AS THE ASSET WITH WHICH IT IS LINKED IS NOT A TAXABLE INCOME PRODUCER, IN WHICH CASE, THE INTEREST INCURRED IN THAT PERIOD MUST BE CAPITALIZED AS PART OF THE COST OF ACQUIRING THE ASSETS AND BE DEDUCTED ONLY VIA
DEPRECIATION.
WHEN THE TERM "INTEREST" IS APPLIED TO ALLOCATIONS OR PAYMENTS MADE
TO HOLDERS OF PREFERRED SHARES AND ACTUALLY CONSTITUTE DIVIDENDS, OR REPRESENT DISTRIBUTION OF PROFITS, SUCH INTEREST IS NOT DEDUCTIBLE.
WHEN FINANCING IS ACQUIRED AND THOSE FUNDS ARE USED, TO GRANT FULL OR PARTIAL FINANCING, BY AGREEING A PERCENTAGE
OF INTEREST LOWER THAN ASSUMED IN THE SOURCE FINANCING OF THOSE FUNDS, THEY WILL ONLY BE DEDUCTIBLES THE INTERESTS ASSUMED IN THE SOURCE FINANCING, UP TO THE AMOUNT OF THE LOWEST INTEREST RATE
AGREED UPON IN THE AWARDED FINANCING. (14)
Costs
11) THE COST OF THE MERCHANDISE AND THE PRODUCTS SOLD, TO BE DETERMINED AS FOLLOWS: (14)
THE AMOUNT OF THE STOCKS AT THE BEGINNING OF THE FINANCIAL YEAR OR PERIOD OF TAXATION, THE VALUE OF THE COST OF PRODUCTION WILL BE ADDED,
CONSTRUCTION, OR MANUFACTURE, OF FINISHED GOODS AND THE COST OF THE GOODS OR OTHER GOODS ACQUIRED OR EXTRACTED DURING THE FINANCIAL YEAR, AND OF THIS SUM THE AMOUNT OF THE STOCKS AT THE END OF THE SAME YEAR. (14)
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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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21
TO DETERMINE THE COST OF SALES, THE VALUATION METHOD SHOULD BE USED ADOPTED IN ACCORDANCE WITH ARTICLE 143 OF THE CODE
TAXATION. THE START AND END INVENTORY OR INVENTORY OF THE FINANCIAL YEAR OR PERIOD SHALL BE IN KEEPING WITH THE RECORD OF THE INVENTORY CONTROL RECORD AND THE MINUTES TO WHICH
REFERS TO ART. 142 OF THE ABOVE CODE. THE DIFFERENCES IN THE COST OF SALES WILL NOT BE DEDUCTIBLE FROM THE INCOME OBTAINED, WHEN THE OBLIGATIONS REFERRED TO IN THIS PARAGRAPH ARE NOT MET. (18)
FOR THE PURPOSES OF THE PROVISIONS OF THIS NUMERAL, THE COST OF PRODUCTION IS THE ONE INTEGRATED BY THE RAW MATERIAL, LABOR AND EXPENSES
INDIRECT MANUFACTURING, BEING DEDUCTIBLE FROM THE INCOME OBTAINED ONLY THE COST OF PRODUCTION CORRESPONDING TO THE GOODS THAT HAVE BEEN SOLD IN THE YEAR OR PERIOD OF THE RESPECTIVE IMPOSITION. (14)
agricultural Expenses
12) THE NECESSARY EXPENSES FOR OBTAINING COMPUTABLE INCOME FROM AGRICULTURAL HOLDINGS, SUCH AS THOSE INCURRED FOR THE PURPOSES OF WAGES, SOWING, LIVING, ACQUISITION OF FODDER, PLANTS, SEEDS AND FERTILIZERS OR FERTILIZERS OF ALL KINDS, PAID PASTURE
TO THIRD, TERRAINS OR CENSUSES, CONSERVATION OF FENCES, PODAS, CLEAN, AND OTHER SIMILAR AGRICULTURAL EXPENDITURE.
LIVESTOCK FEEDING AND REARING EXPENSES ARE DEDUCTIBLE AS THEY REPRESENT A REAL INCOME, THUS EXCLUDING THE VALUE OF THE PRODUCTS THAT ARE HARVESTED IN THE SAME
AGRICULTURAL HOLDING, AS WELL AS THE OF THE TAXPAYER ' S OWN WORK. (2) (14)
REGARDING COSTS AND EXPENSES OUTLINED IN THIS ARTICLE, INCURRED IN MANUFACTURING, MANUFACTURING, PRODUCTION OR ANY ACTIVITY INVOLVING THE PROCESSING OF RAW MATERIALS INTO FINISHED PRODUCTS, WILL NOT BE DEDUCTIBLES TO
TIMING OF THEIR PAYMENT OR ACCRUAL, BUT WILL BE ACCUMULATED ON A PRO RATA BASIS ACCORDING TO THE COST SYSTEMS, METHODS AND TECHNIQUES ADOPTED BY THE TAXPAYER TO ESTABLISH THE COST OF PRODUCTION, PROCESSING, EXTRACTION, CONSTRUCTION OR LIKE, AND WILL BE
DEDUCTED TO THE EXTENT THAT THE FINISHED PRODUCTS ARE SOLD, USED OR CONSUMED IN TAXABLE INCOME GENERATING OPERATIONS. WHAT MUST BE CHECKED BY THE TAXABLE PERSON. (18)
NON-DEDUCTIBLE COSTS AND EXPENSES (8)
Art. 29-A. WILL NOT BE ADMITTED AS INCOME-DEDUCTIBLE EROGATIONS OBTAINED: (8)
1) THE PERSONAL AND LIVING EXPENSES OF THE TAXPAYER OR HIS FAMILY, AS WELL
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LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
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22
AS PARTNERS, CONSULTANTS, ADVISORS, REPRESENTATIVES OR PROXIES, MANAGERS OR EXECUTIVES; (8)
2) REMUNERATION FOR SERVICES OTHER THAN THE PRODUCTION OF COMPUTER REVENUE. THE FOREGOING DOES NOT FREE THE PERSON MAKING THE PAYMENT, FROM THE
OBLIGATION TO WITHHOLD THE RESPECTIVE TAX AND TO FIND OUT SUCH SUMS WITHIN THE TIME LIMITS PROVIDED FOR BY LAW; (8) (14)
3) THE SUMS IN TERMS OF RETURN OF THE INVESTED CAPITAL, SECURITIES SECURITIES, WITHDRAWALS OR ADVANCES ON ACCOUNT OF EARNINGS, PAID TO:
(A) PARTNERS OR SHAREHOLDERS OF A COMPANY, THEIR SPOUSES OR THEIR FAMILY MEMBERS;
(b) HOLDERS OF A COMMERCIAL ENTERPRISE, THEIR SPOUSES OR THEIR FAMILY MEMBERS;
UNLESS IT IS EFFECTIVELY VERIFIED THAT THE CAPITAL HAS BEEN INVESTED IN THE SOURCE OF INCOME SEVERE. (8) (18)
4) THE TAXPAYER ' S TRAVEL OR VIATIC EXPENSES, OR ITS PARTNERS OR
EMPLOYEES, NOT PROVEN AS INDISPENSABLE IN THE BUSINESS OR PRODUCTION; (8)
5) THE AMOUNTS INVESTED IN THE ACQUISITION OF GOODS AND IN IMPROVEMENTS TO PERMANENT NATURE TO INCREASE THE VALUE OF THE GOODS AND OTHER EXPENSES ASSOCIATED WITH SUCH OPERATIONS WITHOUT PREJUDICE TO THE PROVISIONS
REGARDING THE DEPRECIATION DEDUCTION; (8)
6) THE AMOUNTS INVESTED IN THE ACQUISITION OF HOUSING OR LEASE
HOUSING; ACQUISITION, IMPORT OR HOSPITALIZATION; LEASE, MAINTENANCE, IMPROVEMENT OR REPAIR OF VEHICLES; AS WELL AS THE ACQUISITION, IMPORT OR HOSPITALIZATION OF FUEL, LUBRICANTS AND
SPARE PARTS FOR THE SAME, FOR THE USE OF THE TAXPAYER, PARTNERS OR SHAREHOLDERS OF ALL TYPES OF VEHICLES COMPANIES, DIRECTORS, REPRESENTATIVES OR PROXIES, ADVISORS, CONSULTANTS OR EXECUTIVES OF THE TAXPAYER, OR TO
THE RELATIVES OF THE SUBJECTS MENTIONED, PROVIDED THAT SUCH GOODS DO NOT DIRECTLY AFFECT THE SOURCE OF INCOME. (8) (18)
7) THE PROFITS OF THE FINANCIAL YEAR TO BE USED FOR CAPITAL INCREASE, THE FORMATION OF RESERVE FUNDS, EVENTUALITIES OR OF ANY OTHER NATURE, THE DEDUCTION OF WHICH IS NOT EXPRESSLY PERMITTED IN LAW; (8)
8) DIVIDENDS PAID TO PREFERRED STOCK HOLDERS IN ANY KIND OF PARTNERSHIP; (8)
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23
9) DONATIONS AND CONTRIBUTIONS NOT INCLUDED IN THIS LAW; (8)
10) CAPITAL LOSSES, WHETHER THEY COME FROM THE TRANSACTIONS REFERRED TO IN ARTICLES 14 AND 42 OF THIS LAW, AS WELL AS ALL THOSE ARISING FROM TRANSACTIONS OTHER THAN THOSE MENTIONED ABOVE; (8) (14)
IN NO CASE WILL BE DEDUCTIBLES OF LOSSES ARISING FROM ACTS OR OPERATIONS CARRIED OUT BETWEEN RELATED SUBJECTS, OR WITH PERSONS OR
ENTITIES RESIDENT OR DOMICILED IN COUNTRIES, STATES OR TERRITORIES WITH PREFERENTIAL, LOW OR NO TAXATION REGIMES OR TAX HAVENS. (18)
11) ANY OTHER EXPENDITURE OR EROGATION NOT SPECIFIED IN THIS ARTICLE, WHICH IS NOT INDISPENSABLE FOR THE PRODUCTION OF THE COMPUTABLE INCOME OR THE
CONSERVATION OF ITS SOURCE. (8)
12) THE COSTS AND EXPENSES RELATED TO INCOME SUBJECT TO RETENTION WHEN
PAYMENT HAS BEEN MADE AND THE OBLIGATION TO RETAIN AND FIND OUT THE RETAINED TAX HAS NOT BEEN MET. (14)
13) THE COSTS OR EXPENSES INCURRED RELATED TO INCOME SUBJECT TO
RETENTION, UNLESS THE WITHHOLDING AGENT FINDS OUT IN THE RESPECTIVE FINANCIAL YEAR OR PERIOD OF TAXATION, THE VALUE TO BE PAID AS A WITHHOLDING TAX. THE VALUES THAT WOULD BE PAYABLE IN
CONCEPT OF HOLDS RELATING TO THE MONTH OF DECEMBER MUST BE ENTERED IN ACCORDANCE WITH THE RULE SET OUT IN ARTICLE 62 (2) OF THIS ACT. IN ANY CASE, IT MUST ALSO BE FULFILLED WITH ALL
THE OTHER STIPULATED DEDUCTIBILITY REQUIREMENTS. (14)
14) THE INTEREST, FEES AND ANY OTHER PAYMENT FROM
FINANCIAL, INSURANCE OR REINSURANCE OPERATIONS HELD BY THE TAXABLE BORROWER IN ANY OF THE FOLLOWING CASES:
(a) NO. MADE THE WITHHOLDING TAX ON INCOME OR TAX ON THE TRANSFER OF MOVABLE PROPERTY AND THE PROVISION OF SERVICES ESTABLISHED IN THE TAX CODE,
WHEN APPROPRIATE.
(b) THE LENDER OR PROVIDER IS A RELATED SUBJECT
DOMICILED, AND THE LATTER HAS NOT DECLARED THEM AS INCOME TAXED IN THE FINANCIAL YEAR OR TAX PERIOD OF ITS ACCRUAL.
(c) THE RESULT OF APPLYING TO LOANS OR LOANS IS EXCEEDED, THE AVERAGE RATE OF ACTIVE INTEREST ON LOANS PLUS FOUR ADDITIONAL POINTS AND THE CREDITOR IS A RELATED SUBJECT OR IS DOMICILED, CONSTITUTED OR LOCATED IN A COUNTRY, STATE OR
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24
TERRITORY WITH PREFERENTIAL TAX REGIME, LOW OR NO TAXATION OR PARADISE Fiscal.
THE AVERAGE RATE REFERRED TO IN THE PRECEDING PARAGRAPH IS THE REFERENCE TO LOANS OR LOANS TO COMPANIES APPLIED BY THE SYSTEM
FINANCIAL AND PUBLISHED BY THE CENTRAL RESERVE BANK.
(d) THE LENDER OR PROVIDER OF INSURANCE OR REINSURANCE SERVICES
IS A RELATED SUBJECT OR IS DOMICILED, CONSTITUTED OR LOCATED IN A COUNTRY, STATE OR TERRITORY WITH PREFERENTIAL TAX REGIME, LOW OR ZERO TAXATION OR PARADISE FISCAL AND
BORROWING BY CREDIT, INSURANCE OR REINSURANCE OPERATIONS EXCEEDS THE RESULT OF MULTIPLYING BY THREE TIMES THE VALUE OF THE AVERAGE BOOK CAPITAL OF THE
BORROWER TAXPAYER.
FOR THE PURPOSES OF THE PRECEDING PARAGRAPH, THE EQUITY OR ACCOUNTING CAPITAL
AVERAGE IS THE RATIO THAT IS OBTAINED FROM DIVIDING BETWEEN TWO, THE SUM OF THE EXISTING EQUITY OR ACCOUNTING CAPITAL AT THE BEGINNING AND END OF THE BORROWER ' S FINANCIAL YEAR.
THE RULES OF NON-DEDUCTIBILITY REGARDING INDEBTEDNESS ESTABLISHED IN THIS LITERAL SHALL NOT APPLY TO TAXABLE PERSONS WHO ARE OBLIGED TO COMPLY WITH
INDEBTEDNESS CONTAINED IN OTHER LEGAL BODIES AND ARE SUPERVISORY SUBJECTS BY THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM. LIKEWISE, THESE RULES WILL NOT APPLY TO
COOPERATIVE SOCIETIES OF SAVINGS AND CREDIT AND THEIR RESPECTIVE FEDERATIONS. (14) (15) (18)
15) THE SECURITIES COVERED IN DOCUMENTS RELATING TO THE CONTROL OF THE TRANSFER OF MOVABLE PROPERTY TAX AND THE PROVISION OF SERVICES WHERE ANY OF THE FOLLOWING CIRCUMSTANCES OCCUR:
(a) WHICH THE SUBJECT THE ISSUER OF THE DOCUMENT IS NOT REGISTERED AS A TAXPAYER OF THE TAX;
(b) THAT THE ISSUER OF THE DOCUMENT IS STILL REGISTERED AS A TAXPAYER OF THE TAX, THE ACQUIRER OF THE GOODS, OR
SERVICES DO NOT VERIFY THE EFFECTIVE EXISTENCE OF THE OPERATION OR THE PERFORMANCE OF THE OPERATION PRESUMED TRADER;
(c) THE SECURITIES COVERED IN DOCUMENTS RELATING TO THE CONTROL OF THE TRANSFER OF MOVABLE PROPERTY AND THE PROVISION OF SERVICES WHOSE NUMBERS HAVE NOT BEEN ALLOCATED AND
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AUTHORIZED BY THE TAX ADMINISTRATION;
d) THAT THE DOCUMENTS ARE NOT FIND IN THE NAME OF THE ACQUIRER OF THE MOVABLE PROPERTY OR OF THE SERVICES, OR WHICH STANDARD DOES NOT PROVE TO HAVE BORNE THE ECONOMIC IMPACT OF THE EXPENDITURE.
(14)
16) THE COSTS OR EXPENSES RELATED TO THE ACQUISITION OR USE OF GOODS OR
UTILIZATION OF SERVICES THAT ARE NOT NECESSARY FOR THE PRODUCTION OF THE TAXABLE INCOME OR IN THE CONSERVATION OF THE SOURCE. (14) (18)
17) DONATIONS THAT HAVE NOT BEEN REPORTED BY THE DONATEES, WHICH ARE SUPPORTED ON VOUCHERS WHOSE NUMBERING HAS NOT BEEN ALLOCATED AND AUTHORIZED BY THE TAX ADMINISTRATION
OF THE LEGALLY ADMITTED PERCENTAGE, OR THOSE THAT THE TAXPAYER DOES NOT ACTUALLY CHECK TO HAVE MADE. (14)
18) COSTS OR EXPENSES THAT ARE NOT PROPERLY DOCUMENTED AND RECORDED. (14)
FOR THE PURPOSES OF THE PRECEDING PARAGRAPH, THE FINANCIAL FIGURES AT THE CLOSE OF
EACH PERIOD OR PERIOD, WHICH ARE REFLECTED IN THE VARIOUS ACCOUNTS AND SUB-ACCOUNTS OF THE LEGAL AND ANCILLARY BOOKS OR SPECIAL REGISTERS, IN ADDITION TO THE FINANCIAL STATEMENTS AND THEIR RESPECTIVE NOTES AND ANNEXES, SE
SHALL BE CONSIDERED AS DEFINITIVE AND MAY NOT BE MODIFIED BY THE TAXABLE PERSON UNLESS SUCH MODIFICATION HAS BEEN CERTIFIED BY A PUBLIC ACCOUNTANT AUTHORISED BY THE SUPERVISORY BOARD OF THE ACCOUNTING PROFESSION
PUBLIC AND AUDIT. IN THE EVENT THAT THE TAXABLE PERSON IS OBLIGED TO APPOINT AN EXTERNAL AUDITOR, IT SHALL BE THE LATTER WHO MUST CARRY OUT THE SAID CERTIFICATION IN WHICH THE PRINCIPLES AND
ACCOUNTING STANDARDS APPLICABLE IN EL SALVADOR ARE RECORDED. COMMERCIAL AND TAX REQUIREMENTS. WHERE THE TAXABLE PERSON IS NOT REQUIRED TO APPOINT A FINANCIAL EXTERNAL AUDITOR, BUT IS REQUIRED TO APPOINT
AUDITOR TO DELIVER AN OPINION AND TAX REPORT, THE LATTER MAY BE CERTIFIED BY THE LATTER, WHO SHALL RECORD IT IN THE OPINION AND TAX REPORT ISSUED, AND THE REPORT SHALL BE ATTACHED TO THE REPORT
CERTIFICATION OF THE AMENDMENT FOR SUBMISSION WITHIN THE TIME LIMIT SET OUT IN ARTICLE 134 OF THE TAX CODE. THE CERTIFICATION SHALL BE ESTABLISHED IN COMPLIANCE WITH THE AUDITING STANDARDS AUTHORIZED BY
THE COUNCIL OF THE SURVEILLANCE OF THE PROFESSION OF PUBLIC ACCOUNTING AND AUDITING. (18)
THE PUBLIC ACCOUNTANT IS REQUIRED TO DISPLAY AND PROVIDE THE INFORMATION AND WORKING PAPERS WHEN REQUIRED BY THE GENERAL MANAGEMENT OF INTERNAL TAXES, IN THE EXERCISE OF THEIR POWERS. (18)
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19) AMORTIZATION OR DEPRECIATION OF KEY RIGHTS, BRANDS AND OTHER ASSETS SIMILAR INTANGIBLES. (14)
20) THE PENALTIES, FINES, SURCHARGES, DELINQUENT INTERESTS, CRIMINAL CLAUSES AND OTHER SIMILAR PENALTIES, TO BE PAID BY COURT, CONVENTION
PRIVATE OR ANY OTHER MEANS OF SETTLEMENT OF DISPUTES. THE COMPENSATION OR RETURNS EFFECTIVELY MADE TO CUSTOMERS, IN COMPLIANCE WITH REGULATIONS ESTABLISHED BY
REGULATORS, OR ALSO THOSE COMPENSATIONS OR REFUNDS THAT ARE THE PRODUCT OF THE ARBITRATION PROCESS THAT SUCH REGULATORS ESTABLISH AND ARE INHERENT IN THEIR ROTATION OR ACTIVITY, PROVIDED THAT
SECURITIES CLEARED OR RETURNED HAVE BEEN DECLARED AS INCOME TAXED BY THE TAXABLE PERSON WHO PAYS THEM. (14) (18)
21) THE LOSS RESULTING FROM THE ACQUISITION COST AND THE ASSET SALE VALUE PERFORMING IN A STATE OF DETERIORATION, EXPIRATION, EXPIRATION OR THE LIKE. THEY ARE NOT INCLUDED IN THIS PROVISION,
GOODS WITH FAULTS OR BREAKDOWNS RESULTING FROM THE PRODUCTION PROCESS AND WHICH ARE SUBSEQUENTLY EFFECTIVELY SOLD. (18)
22) EXPENSES FOR PENALTIES OR PROVISIONS OF ANY
NATURE CONTAINED IN ACCOUNTING PRINCIPLES AND STANDARDS OR RULES ISSUED BY REGULATORY ENTITIES SHALL NOT BE DEDUCTIBLE, WHICH SHALL NOT BE EXPRESSLY PERMITTED BY THIS LAW. (18)
23) PURCHASES OF GOODS OR USE OF SERVICES, THE AMOUNTS OF WHICH ARE EQUAL TO OR GREATER THAN TWENTY-FIVE MINIMUM MONTHLY WAGES:
I) NOT PERFORMED BY CHEQUE, BANK TRANSFER, CREDIT CARDS, OR DEBATE.
(ii) THE PAYMENT METHOD IS DIFFERENT FROM THE CASH AND MEANS USED IN THE ROMAN (i), AND NOT FORMALIZED IN WRITTEN CONTRACT,
PUBLIC DEED OR OTHER DOCUMENTS GOVERNING CIVIL OR COMMERCIAL LAW, SUCH AS: PERMUTAS, MUTUAL NON-CASH GOODS, PAYMENT OF PAYMENTS, PROPERTY TITLE DISPOSALS,
COMPENSATION OF DEBTS OR ACCOUNTING OPERATIONS. (18)
24) DEDUCTIONS THAT ARE NOT EXPRESSLY CONTAINED IN THIS
ACT. (18)
Depreciation
Art. 30.-It is deductible from the income obtained, the cost of acquisition or manufacture, of the goods used by the taxpayer, for the generation of the computable income, according to the provisions of this article.
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In goods that are consumed or exhausted in a period not exceeding twelve months of use or employment in the production of the income, its total cost will be deducted in the year in which its employment has been higher,
as declared by the taxpayer.
IN THE GOODS WHOSE USE OR EMPLOYMENT IN THE PRODUCTION OF THE INCOME, IS EXTENDED BY
A PERIOD OF MORE THAN TWELVE MONTHS, AN ANNUAL FEE OR A PROPORTION OF IT SHALL BE DETERMINED, ACCORDING TO APPLICABLE, DEDUCTIBLE FROM THE INCOME OBTAINED, IN ACCORDANCE WITH THE FOLLOWING RULES: (7) (14)
1) THE DEDUCTION PROCEEDS FROM THE LOSS OF VALUE SUFFERED BY THE GOODS AND FACILITIES BY THE USE IN THE PRODUCTION SOURCE OF TAXED INCOME.
IN GOODS WHOSE USE OR EMPLOYMENT IN THE PRODUCTION OF THE TAXED INCOME DOES NOT INCLUDE A FULL TAX YEAR, IT SHALL BE DEDUCTIBLE
ONLY THE PART OF THE ANNUAL QUOTA THAT IS PROPORTIONALLY CORRESPONDING ACCORDING TO THE TIME THE GOOD HAS BEEN IN USE IN THE GENERATION OF INCOME OR CONSERVATION OF THE SOURCE IN THE PERIOD OR
EXERCISE OF TAXATION.
IN THE CASE THAT THE GOODS ARE USED IN THE PRODUCTION, CONSTRUCTION, MANUFACTURE, OR EXTRACTION OF OTHER GOODS, ALSO IN THE LOTIFICATION
OF IMMOVABLE PROPERTY, THE VALUE OF THE ANNUAL DEPRECIATION FEE OR CORRESPONDING PROPORTION, IT WILL BE PART OF THE COST OF SUCH GOODS. IN THIS CASE ONLY THE RIGHT TO DEDUCT FROM THE INCOME
OBTAINED THE VALUE OF THE DEPRECIATION CORRESPONDING TO THE GOODS SOLD IN THE RESPECTIVE YEAR OR PERIOD OF TAXATION. (14)
2) THE VALUE SUBJECT TO DEPRECIATION SHALL BE THE TOTAL COST OF THE ASSET, EXCEPT IN THE FOLLOWING CASES: (7)
(a) WHEN IMPORTED MACHINERY IS TREATED AS HAVING BEEN GRANTED EXEMPTION FROM THE TRANSFER OF MOVABLE PROPERTY AND THE PROVISION OF SERVICES ON ITS IMPORTATION
THEVALUE RECORDED BY THE ADDRESS GENERAL AT THE TIME OF IMPORT; (7)
b) WHEN USED MACHINERY OR MOVABLE PROPERTY, THE MAXIMUM VALUE SUBJECT TO DEPRECIATION SHALL BE THE PRICE OF THE NEW GOOD AT THE TIME OF ITS ACQUISITION, ADJUSTED ACCORDING TO THE FOLLOWING
PERCENTAGES; (7)
LIFETIME PERCENTAGE OF MACHINE PRICE
OR BIESES USED FURNITURE
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1 YEAR 80%
2 YEARS 60%
3 YEARS 40%
4 YEARS AND MORE 20%
PRICES OF THE GOODS INDICATED WILL BE SUBJECT TO AUDIT. (7)
3) THE TAXPAYER WILL DETERMINE THE AMOUNT OF DEPRECIATION THAT
CORRESPONDS TO THE EXERCISE OR THE IMPOSITION PERIOD AS FOLLOWS:
APPLY A FIXED AND CONSTANT PERCENTAGE ON THE VALUE SUBJECT TO
DEPRECIATION. THE MAXIMUM ALLOWABLE DEPRECIATION PERCENTAGES WILL BE:
5% EDIT
20% MACHINERY
25% ITEMS
OTHER MOVABLE ASSETS 50%
DETERMINED THE DEPRECIATION VALUE IN THE MANNER SET BY THIS NUMBER THE RULES SET OUT IN THE NUMERAL 1) OF THE THIRD INDENT OF THIS ARTICLE WILL BE APPLIED TO THAT VALUE TO DETERMINE THE VALUE OF
DEDUCTIBLE DEPRECIATION.
ONCE THE TAXPAYER HAS ADOPTED A PERCENTAGE FOR
DETERMINED WELL, YOU MAY NOT CHANGE IT WITHOUT AUTHORIZATION FROM THE GENERAL MANAGEMENT OF INTERNAL TAXES, IN CASE THE DEPRECIATION WILL NOT BE DEDUCTIBLE.
ACTUAL EXPENDITURES FOR THE ACQUISITION, CREATION, MANUFACTURE OR CONSTRUCTION OF THE GOODS REFERRED TO IN THIS ARTICLE
MUST BE DEMONSTRATED BY APPROPRIATE PAYMENT DOCUMENTS.
IN NO CASE, THE REAL ESTATE TRANSFER TAX
WILL CONSIDER PART OF THE ACQUISITION COST OF THE REAL ESTATE, FOR THE PURPOSES OF THE CALCULATION AND DEDUCTION OF THE DEPRECIATION OF SUCH ASSETS. (2) (7) (14)
4) For the purposes of this deduction the valuation or revaluation of the goods in use is not applicable;
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5) The taxpayer will be able to claim this depreciation only on goods that property, and as long as they are in use in the production of taxable income.
In the case of goods in which one person has the usufruct and the other is the property, the depreciation shall be made by the user during the period of the usufruct.
6) Taxpayers must keep detailed records of the depreciation, except those who are not required by law to carry out formal accounting or records. The regulation
will regulate how to carry such a record;
7) If the taxpayer has stopped downloading in previous years the item
corresponding to the depreciation fee of a good or has downloaded it in value less, it shall not be entitled to accumulate such deficiencies in the quotas for subsequent years;
8) GOODS OR STOCKS OF THE TAXPAYER ' S INVENTORY, OR THE RUSTIC OR URBAN PREMISES, EXCEPT THE CONSTRUCTED
, ARE NOT DEPRECIABLE.ABOUT THEM; IN THIS LAST CASE REFERRING TO BUILDINGS, FOR THE PURPOSES OF PROVENANCE OF THE DEDUCTIBILITY, THE TAXPAYER SHALL SEPARATE IN ITS ACCOUNTS THE VALUE OF THE LAND AND THE VALUE OF THE BUILDING; (14)
9) WHEN THE WELL IS USED AT THE SAME TIME IN THE PRODUCTION OF TAXABLE AND NON-TAXABLE INCOME OR NOT CONSTITUTE INCOME, THE DEDUCTION OF THE
DEPRECIATION WILL BE ADMITTED ONLY IN THE PROPORTION CORRESPONDING TO THE TAXABLE INCOME IN THE FORM PROVIDED FOR IN ARTICLE 28 FINAL POINT OF THIS ACT; AND (14)
10) THE DEPRECIABLE GOOD WILL BE REVENUE FOR TAX PURPOSES WITHIN THE TIME LIMIT RESULTING FROM THE APPLICATION OF THE FIXED PERCENTAGE.
DEDUCTION FOR DEPRECIATION ON GOODS THAT HAVE BEEN REDEEMED MAY NOT BE DEDUCTED
(14)AMORTIZATION OF SOFTWARE OR SOFTWARE (15)
Art. 30-A.-IT IS DEDUCTIBLE FROM THE INCOME OBTAINED BY AMORTIZATION, THE COST OF
ACQUISITION OR PRODUCTION OF SOFTWARE USED FOR THE PRODUCTION OF THE TAXABLE INCOME OR CONSERVATION OF ITS SOURCE, APPLYING A FIXED PERCENTAGE AND CONSTANT OF A MAXIMUM OF 25% A YEAR ON THE COST OF PRODUCTION OR ACQUISITION, ALL
WITHOUT PREJUDICE TO THE FOLLOWING LITERALS:
a) IN THE CASE OF COMPUTER PROGRAMS PRODUCED BY THE
CONTRIBUTOR TO THEIR USE, SHALL NOT BE DEDUCTIBLE THE COST CAPITALISED WHEN THEY HAVE BEEN DEDUCTED PREVIOUSLY IN A PERIOD OR EXERCISE OF TAXATION THE EROGATIONS THAT MAKE UP SUCH COST.
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b) FOR PURPOSES OF THIS DEDUCTION THE VALUATION OR REVALUATION OF THE PROGRAMMES.
c) WHEN A PROGRAM IS ACQUIRED, THE MAXIMUM VALUE SUBJECT TO AMORTIZATION WILL BE THE PRICE OF THE NEW PROGRAM AT THE TIME OF ITS
ACQUISITION, ADJUSTED ACCORDING TO THE FOLLOWING PERCENTAGES:
YEARS OF LIFE PERCENTAGE OF THE
PROGRAM OR SOFTWARE USED
1 YEAR 80%
2 YEARS 60%
3 YEARS 40%
4 YEARS 20%
SOFTWARE OR SOFTWARE PRICES WILL BE SUBJECT TO AUDIT.
(d) IN THE CASE OF PROGRAMS OR SOFTWARE WHOSE USE OR EMPLOYMENT IN THE PRODUCTION OF THE TAXED INCOME DOES NOT INCLUDE A FULL TAX YEAR, ONLY THE PORTION OF THE ANNUAL FEE THAT
PROPORTIONALLY CORRESPONDS TO IN FUNCTION OF THE TIME IN WHICH THE GOOD HAS BEEN IN USE OF THE GENERATION OF THE INCOME OR CONSERVATION OF THE SOURCE IN THE PERIOD OR EXERCISE OF IMPOSITION.
e) THE TAXPAYER MAY ONLY DEDUCT THE AMORTIZATION OF THE PROGRAM OR SOFTWARE FROM ITS PROPERTY, AND AS LONG AS THEY ARE IN USE
IN THE PRODUCTION OF TAXABLE INCOME.
(f) WHEN THE SOFTWARE IS USED AT THE SAME TIME IN THE PRODUCTION OF
TAXABLE INCOME AND NON-TAXABLE INCOME OR NON-INCOME, THE DEDUCTION OF THE DEPRECATION SHALL BE PERMITTED ONLY IN THE PROPORTION CORRESPONDING TO THE INCOME TAXABLE IN THE FORM PROVIDED FOR IN ART. 28
FINAL POINT OF THIS ACT.
(g) IF THE TAXPAYER HAS CEASED TO DOWNLOAD IN PREVIOUS YEARS THE
CORRESPONDING ITEM OF PROGRAM OR SOFTWARE AMORTIZATION SHALL NOT BE ENTITLED TO ACCUMULATE THOSE DEFICIENCIES TO THE QUOTAS FOR SUBSEQUENT YEARS.
(h) THE PERCENTAGE OF DEPRECIATION MAY NOT BE CHANGED WITHOUT THE AUTHORIZATION OF THE TAX ADMINISTRATION.
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THE PROVISIONS OF THIS ARTICLE ARE WITHOUT PREJUDICE TO THE PROVISIONS OF THE Arts. 156-A AND 158 OF THE TAX CODE. (15)
Other deductions
Art. 31.-They are also deductible from the income obtained:
Legal reserve
1) The legal reserve of the home companies that is constituted on the net profits of each financial year, up to the minimum limit determined in the respective laws or by the
offices
in the case of companies that carry out both TAXABLE ACTIVITIES AND
EXEMPT, THE LEGAL RESERVE WILL NOT BE DEDUCTIBLE IN ITS ENTIRETY, BUT ONLY IN THE PROPORTION. CORRESPONDING TO THE TAXED OPERATIONS. (8)
WHEN THE LEGAL RESERVE IS DECREASED IN AN EXERCISE OR PERIOD OF IMPOSITION BY ANY CIRCUMSTANCE, SUCH AS CAPITALIZATION, APPLICATION TO LOSSES OF PRIOR YEARS OR DISTRIBUTION, SHALL CONSTITUTE
INCOME TAXED FOR THE COMPANY, FOR THE AMOUNT THAT WAS DEDUCTED FOR THE PURPOSES OF THE TAX ON INCOME IN EXERCISES OR PERIODS OF IMPOSITION PRIOR TO ITS DECREASE, BEING SEPARATELY SETTLED FROM
ORDINARY INCOME, AT THE RATE OF 25% (25%). FOR SUCH PURPOSES THE COMPANY SHALL KEEP A RECORD OF THE LEGAL RESERVE CONSTITUTION AND THE AMOUNT DEDUCTED FOR THE DETERMINATION OF NET OR TAXABLE INCOME
IN EACH FINANCIAL YEAR OR PERIOD OF TAXATION. (18)
2) of the Income obtained the value or the balance of the bad debts
whenever the following requirements are filled:
a) That the debt comes from operations own the revenue producing business
computables;
b) on your opportunity has been computed as taxable income;
c) That is accounted for or
and
d) That the taxpayer provides the General Directorate with the information required by
the regulation.
3) THE TREATMENT FOR THE CONSTITUTION OF SANITATION RESERVES BAD ACCOUNTS AND EXTRAORDINARY ASSET RESERVES BY
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PART OF BANKS, INSURANCE COMPANIES, OFFICIAL CREDIT INSTITUTIONS AND THE SUBJECTS AUTHORIZED UNDER THE LAW OF COOPERATIVE BANKS AND
SAVINGS AND CREDIT COMPANIES, WILL BE PROPOSED BY THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM TO THE GENERAL DIRECTORATE OF INTERNAL TAXES, REMAINING ITS DEFINITIVE APPROVAL FOR TAX EFFECTS AS
PRIVATE FACULTY OF SUCH GENERAL MANAGEMENT. (2) (14) (15) (18)
NO RESERVATION WILL BE DEDUCTIBLE TO BE SET BY THE CONTRIBUTORS
REFERRED TO IN THIS NUMERAL, WHICH HAS NOT BEEN PROPOSED BY THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM AND APPROVED BY THE GENERAL TAX DIRECTORATE INTERNOS. (2) (8) (14) (15) (18)
IN NO CASE WILL BE DEDUCTIBLE: (2) (14) (15) (18)
(a) THE DISPOSAL RESERVES OF NON-PERFORMING ACCOUNTS AND RESERVES OF EXTRAORDINARY ASSETS, WHICH HAVE BEEN DEDUCTED IN PREVIOUS YEARS. (2) (14) (15) (18)
(b) CONSOLIDATION RESERVES CONSTITUTED DURING THE FINANCIAL YEAR OR PERIOD OF TAXATION ON LOANS OR LOANS CLASSIFIED AS NORMAL, NORMAL DECLINING AND UNDER NORMAL AGREEMENT
SUPERINTENDENCE OF THE FINANCIAL SYSTEM OR EQUIVALENT CLASSIFICATION AS ESTABLISHED BY THE FINANCIAL SYSTEM. THIS PROCEDURE WILL BE ESTABLISHED ACCORDING TO THE GUIDANCE GUIDE
ISSUED IN ACCORDANCE WITH ARTICLE 27 OF THE TAX CODE. THE CONSOLIDATION RESERVES NOT DEDUCTED IN AN EXERCISE OR PERIOD OF TAXATION SHALL BE CONSIDERED AS NON-TAXABLE INCOME IN
THE YEAR FOLLOWING THAT OF ITS CONSTITUTION. (2) (14) (15) (18)
(c) THE CONSOLIDATION RESERVES CONSTITUTED ON CONTINGENCIES. (2)
(14) (15) (18)
d) EXTRAORDINARY ASSET RESERVES, FOR THE AMOUNT OF THE AMOUNT
OF THE RECOVERY RESERVE FOR NON-PERFORMING ACCOUNTS TRANSFERRED FOR ITS CONSTITUTION. (2) (15) (18)
IF RECOBRAREN IN WHOLE OR IN PART THE QUANTITIES REFERRED TO IN THE FIRST SUBPARAGRAPH OF THIS NUMERAL, THEY MUST BE INCLUDED AS TAXABLE INCOME FOR THE YEAR IN WHICH THEY ARE RECEIVED, IN THE AMOUNT DEDUCTED. IF THE RECOVERY IS EFFECTED BY
ACQUISITION OF GOODS IN KIND, THE INCLUSION AS TAXABLE INCOME WILL BE FOR THE TOTAL AMOUNT DEDUCTED IN RESPECT OF THE RECOVERED CREDIT, AND SHOULD BE AFFECTED AT THE TIME OF THE REALIZATION OF THE WELL, AS A GAIN OR LOSS OF CAPITAL, AS IT MAY
THE CASE, ACCORDING TO THE LIQUID VALUE RECOVERED IN SHORT. WHAT IS TO BE CONSIDERED AS PROFIT OR LOSS OF CAPITAL SHALL NOT BE APPLICABLE IN THE CASE OF THE EXTRAORDINARY ASSETS REFERRED TO IN THE FINAL ARTICLE 14 OF THE INCOME TAX LAW, AS AN ORDINARY INCOME OF AN AGREEMENT AS FORESEEN IN
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SUCH LEGAL PROVISION. (2) (15)
ANY VARIATION OR MODIFICATION THAT THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM MAKES TO THE CATEGORIES OF RISK IN ITS CLASSIFICATION, PERCENTAGE OR AMOUNT OF RESERVES TO CONSTITUTE, WILL ALWAYS BE SUBJECT TO THE RULES OF APPROVAL AND DEDUCTION
OF THE ARTICLE. (2) (15)
FOR THE PURPOSES OF THE PROVISIONS IN NUMERALS 2) AND 3) OF THIS ARTICLE, WHEN
THE ACCOUNT PORTFOLIO IS TRANSFERRED TO ANOTHER SUBJECT OR THE ACCOUNT RECEIVABLE IS RECLASSIFIED INTO A LOWER RISK CATEGORY, THE VALUE OF THE DEDUCTION OR RESERVE IN YOUR CASE THAT HAS BEEN REQUESTED FISCALLY, MUST BE DECLARED BY THE TRADER
OF THE PORTFOLIO IN THE YEAR IN WHICH THE TRANSFER WAS CARRIED OUT, AS TAXABLE INCOME IN THE AMOUNT DEDUCTED. (2) (14) (15)
BANKS, INSURANCE COMPANIES, OFFICIAL CREDIT INSTITUTIONS AND SUBJECT-AUTHORISED SUBJECTS UNDER THE LAW OF COOPERATIVE BANKS AND SAVINGS AND CREDIT COMPANIES SHALL CARRY THE ACCOUNTING RECORDS AND CONTROLS. THE
LOANS OR LOANS TO WHICH THE TREATMENT OF THE DEDUCTION OF THE CONSOLIDATION RESERVE ESTABLISHED IN THIS NUMERAL WILL BE APPLIED
(2) (18)Socialpurpose Erogations
Art. 32.-These are deductibles of the income obtained, the relocations made by the taxpayer for the following purposes:
1) EXPENDITURES FOR THE CONSTRUCTION, MAINTENANCE AND OPERATION OF HOUSING, SCHOOLS, HOSPITALS AND ASSISTANCE SERVICES MEDICA AND OF
CULTURAL PROMOTION, RETIREMENT PENSIONS, HEALTH AND LIFE INSURANCE, AND SIMILAR BENEFITS THAT YOU PROVIDE, FREE OF CHARGE AND IN GENERAL, TO YOUR WORKERS, FOR CULTURAL IMPROVEMENT AND WELLBEING
AND OF THEIR CHILDREN, PROVIDED THAT SUCH BENEFITS ARE CARRIED OUT ON THE NATIONAL TERRITORY; HOWEVER, IN THE CASE OF MEDICAL, HOSPITAL OR STUDY CARE, THEY WILL BE ACCEPTED AS
DEDUCTIBLES EVEN IF THEY ARE PERFORMED ABROAD; ALL DULY CHECKED AND TO THE SATISFACTION OF THE GENERAL MANAGEMENT. (8)
2) the construction and maintenance of sanitation works that provides free workers in their properties or companies, to the inhabitants of a locality and to works that constitute a notorious benefit for a region
of the country.
3) The employer's contributions to the constitution and operation of Associations or
Cooperatives, created to operate with the participation of the company and the workers, oriented to encourage the formation of capital that are destined to improve the living conditions of the workers and their families, as well as to the setting up funds to cover non-stop and other workers ' eventualities. Included
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as deductibles the contributions of the company, intended for contributions in the capital of the company in the name of the aforementioned associations or cooperatives, which
allow the participation of workers in the capital and in the management of the company;
4) DONATIONS TO THE ENTITIES TO WHICH IT REFERS ARTICLE 6 OF THIS LAW, UP TO A MAXIMUM LIMIT OF TWENTY PER CENT OF THE VALUE RESULTING FROM SUBTRACT THE NET INCOME OF THE DONOR IN THE PERIOD OR EXERCISE OF TAXATION
RESPECTIVE, THE VALUE OF THE DONATION.
IN DONATIONS OF SERVICES OR IN KIND THE VALUE SUBJECT TO DEDUCTION
IN CONCEPT OF DONATION WILL BE THE COST OF THE GOODS OR SERVICES OBJECT OF DONATION IN WHICH THE DONOR HAS INCURRED. IN THE CASE OF GOODS THAT HAVE BEEN THE OBJECT OF DEPRECIATION, THE COST MINUS THE
DEPRECIATION DEDUCTED.
IN ANY CASE, DONATIONS MUST BE FREE AND OF CHARACTER
IRREVOCABLE.
FOR THE DEDUCTION OF DONATIONS MADE TO PUBLIC UTILITY FOUNDATIONS AND CORPORATIONS, IN ADDITION TO THE REQUIREMENTS
THAT THIS LAW INDICATES FOR THESE PURPOSES WILL ALWAYS BE REQUIRED, THAT THE DONOR INSTITUTION FIND QUALIFIED BY THE TAX ADMINISTRATION AS A SUBJECT EXCLUDED FROM THE SUBSTANTIVE TAX OBLIGATION
AS REFERRED TO IN ARTICLE 6 OF THIS LAW, IN ADVANCE OF THE DONATION.
DONATIONS WILL NOT BE DEDUCTIBLE FROM THE DONATIONS THAT ARE MADE
TO ENTITIES THAT DIRECTLY OR INDIRECTLY BENEFIT THE DONOR, THE FAMILY OF THE DONOR UP TO THE FOURTH DEGREE OF CONSANGUINITY OR SPOUSE, PARTNER OR PARTNER OF LIFE. IF THE DONOR IS A LEGAL PERSON, THE
DEDUCTION WILL NOT BE APPLICABLE WHEN THE BENEFICIARIES ARE THE SHAREHOLDERS, DIRECTORS, LEGAL REPRESENTATIVE, PROXY, ADVISORS, THE RELATIVES OF ANY OF THEM UNTIL THE FOURTH
CONSANGUINITY, SPOUSE, PARTNER OR LIFE PARTNER.
THE TAX ADMINISTRATION WILL ALLOCATE AND AUTHORIZE THE NUMERALS OF
THE DOCUMENTS ON WHICH THE DONATIONS ARE SUPPORTED. FOR THIS PURPOSE, THE DONATARY ENTITIES SHALL REQUEST THE TAX ADMINISTRATION FOR THE RESPECTIVE AUTHORIZATION; (2) (14)
5) THE QUOTAS OR CONTRIBUTIONS TO TRADE UNIONS, ASSOCIATIONS, FOUNDATIONS OR ASSOCIATIONS OF WORKERS, PROVIDED THAT ENTATIONS:
(a) ARE EXCLUDED FROM THE PAYMENT OF THE TAX IN ACCORDANCE WITH ARTICLE 6 OF THIS LAW.
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b) SUPPORT THE QUOTA OR CONTRIBUTION IN DOCUMENTS CONTAINING THE NUMBERING OF CORRELATIVE AUTHORIZED BY THE ADMINISTRATION
TAXES AND WOULD HAVE REPORTED THE VALUES RECEIVED BY THE QUOTAS OR CONTRIBUTIONS, ACCORDING TO THE PROVISIONS OF ARTICLES 115 -A AND 146 OF THE TAX CODE.
(c) QUOTAS OR CONTRIBUTIONS ARE USED EXCLUSIVELY FOR THE CULTURAL WELFARE OF WORKERS OR THE DEFENSE OF THEIR
LABOR RIGHTS; and, (18)
6) THE EMPLOYER ' S FEE PAID BY NATURAL PERSONS TO THE INSTITUTE
SALVADORAN SOCIAL SECURITY WORKER, CORRESPONDING TO THE DOMESTIC WORKER. LIKEWISE, THE LABOR QUOTA PAID TO THAT INSTITUTION WILL BE DEDUCTIBLE, ON BEHALF OF THE WORKER, WHEN IT IS SUPPORTED BY THE
PATRON. (18)
Other deductions for natural persons
Art 33.-NATURAL PERSONS, DOMICILED, WITH MISCELLANEOUS INCOME, IN ADDITION TO THE DEDUCTIONS PROVIDED FOR IN THE PRECEDING ARTICLES, EXCEPT FOR THE NUMBER 7) OF THE ARTICLE 29, MAY DEDUCT FROM THAT INCOME A MAXIMUM AMOUNT OF
EIGHT HUNDRED DOLLARS FROM THE UNITED STATES OF AMERICA, IN EACH FINANCIAL YEAR OR PERIOD, FOR EACH OF THE FOLLOWING CONCEPTS: (1) (8) (17)
(a) THE VALUE OF THE PAID IN THE REPUBLIC FOR THE TAXPAYER, FOR HOSPITAL SERVICES, MEDICINES AND SERVICES PROFESSIONALS PROVIDED BY PHYSICIANS, ANAESTHETISTS, SURGEONS, RADIOLOGISTS,
PSYCHOLOGISTS, OPHTHALMOLOGISTS, LABORATORIES, PHYSIOTHERAPISTS AND DENTISTS TO THE TAXPAYER, AS WELL AS TO THEIR PARENTS, THEIR SPOUSE, THEIR CHILDREN UNDER THE AGE OF 25 AND EMPLOYEES
DOMESTIC, PROVIDED THAT THE FOLLOWING REQUIREMENTS ARE MET: (1) (8)
1) THAT THE PROFESSIONAL WHO PROVIDES THE SERVICE IS DOMICILED IN THE COUNTRY AND LEGALLY AUTHORIZED TO EXERCISE IN THE COUNTRY; AND, (1) (8)
2) SERVICES ARE PROVIDED TO THE FAMILY OR SPOUSE MENTIONED, THESE ARE NOT BY THEMSELVES
CONTRIBUTORS. (1) (8)
MAY MAKE USE OF THIS DEDUCTION WITHOUT FILLING THE REQUIREMENT
SPECIFIED IN NUMERAL 1) OF THIS LITERAL, SALVADORAN OFFICIALS AND EMPLOYEES OF THE GOVERNMENT OR OFFICIAL INSTITUTIONS PROVIDING SERVICES ABROAD. IT IS DEDUCTIBLE ONLY EXPENSE THAT NO
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BE COMPENSATED, FOR INSURANCE OR OTHER COMPENSATION AND ONLY THE ONE WHO IS CONTRACT PRECISELY TO THE PAYMENT OF
PROFESSIONAL AND HOSPITAL SERVICES, THE VALUE OF BRACES AND THE COST OF MEDICINES, WHEN IN THE LATTER CASE THERE IS A MEDICAL PRESCRIPTION. (1) (8)
b) THE VALUE OF THE PAID IN THE REPUBLIC BY THE TAXPAYER, IN THE CONCEPT OF COLLEGIALITY OR SCHOOLING OF THEIR CHILDREN UNTIL
TWENTY-FIVE YEARS OF AGE, OTHER THAN TAXPAYERS, AT ANY LEVEL OF EDUCATION AND IN STATE-AUTHORIZED TEACHING CENTERS. (1) (8)
EQUAL DEDUCTION SHALL BE ENTITLED AND WITHIN THE SAME AMOUNT THE TAXPAYER WHO IS HIMSELF FINANCED BY HIS STUDIES. (1) (8)
ALSO, EMPLOYEES WHOSE INCOME EARNED EXCEEDS US$ 9,100.00 SHALL BE ENTITLED TO THESE DEDUCTIONS. (1) (8) (19)
FOR THE VERIFICATION OF THE ABOVE DEDUCTIONS, IT WILL NOT BE NECESSARY TO ANNEX ANY DOCUMENT WITH THE RESPECTIVE DECLARATION, BUT MUST BE KEPT FOR A PERIOD OF SIX YEARS. (1) (8)
TITLE V
SINGLE TAX CALCULATION
Natural Person
Art. 34.-NATURAL PERSONS DOMICILED, SHALL CALCULATE THE TAX APPLIED TO THE NET OR TAXABLE INCOME RESULTING FROM IT, THE TABLE OF ARTICLE 37. (1)
SECOND REPEALED (1) (19)
Successions
Art. 35.-SUCCESSION TO HOUSEHOLDS, SHALL CALCULATE INCOME TAX, APPLYING THE TABLE IN ARTICLE 37, ON NET INCOME OR TAXABLE INCOME. (1)
SECOND REPEALED (1) (19)
TRUST
Art. 36.-TRUSTS DOMICILED, SHALL CALCULATE THE TAX BY APPLYING THE TABLE OF ARTICLE 37, ON THEIR NET INCOME OR TAXABLE INCOME. (1)
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SECOND REPEALED (1) (19)
Natural, Successions and Trusts (19)
Art. 37.-THE INCOME TAX FOR NATURAL PERSONS, SUCCESSIONS AND
DOMICILED TRUSTS, WILL BE CALCULATED ACCORDING TO THE TABLE BELOW, FOR THE CASES SPECIALLY PROVIDED FOR IN THIS LAW, AS:
RENTA NET OR TAXABLE% OVER THE MOST QUOTA
FROM UNTIL APPLYING EXCESS OF: FIXED OF:
I TRANCHE $0.01 $4,064.00 EXEMPT
II TRANCHE $4,064.01
$9,142.86 10% $4,064.00 $212.12
III TRANCHE $
9,142.87
$ 22,857.14 20% $9,142.86 $720.00
IV TRANCHE $22,857.15
AT FORWARD 30% $22,857.14 $3,462.86
NATURAL PERSONS, SUCCESSIONS OR NON-DOMICILED TRUSTS, WILL CALCULATE THEIR TAX BY APPLYING THIRTY PER CENT (30%) ON THEIR NET INCOME OR TAXABLE INCOME.
EXCLUDE FROM THE CALCULATION OF THE TAX, THOSE INCOME THAT WOULD HAVE BEEN THE OBJECT OF DEFINITIVE WITHHOLDING OF INCOME TAX ON THE ESTABLISHED LEGAL PERCENTAGES. (1) (19)
Employees
Art. 38.-NATURAL PERSONS DOMICILED WHOSE INCOME COMES EXCLUSIVELY FROM WAGES, SALARIES AND OTHER REMUNERATION AND WHICH HAVE BEEN THE SUBJECT OF WITHHOLDING TAX FOR THIS TAX, ARE NOT REQUIRED TO SUBMIT THE
DECLARATION TAXES; EXCEPT THOSE WITH INCOME GREATER THAN US$ 60,000.00 ANNUALLY, AS WELL AS THOSE WHO HAVE NOT BEEN GRANTED THE WITHHOLDING OR WITHHOLDING TAX, DO NOT CORRESPOND TO THE TAX THAT WOULD RESULT FROM THE APPLICATION OF THE TABLE REFERRED TO IN ARTICLE 37 OF THIS LAW, IN WHICH CASE
TO SUBMIT THE DECLARATION CORRESPONDING LIQUIDATING THE TAX OR WILL BE ABLE TO REQUEST THE RESPECTIVE RETURN.
CONSEQUENTLY, PERSONS WHO ARE NOT REQUIRED TO FILE THE DECLARATION, THEIR TAX SHALL BE EQUAL TO THE SUM OF THE DEDUCTIONS MADE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 155 OF THE TAX CODE IN RELATION TO THE TABLES OF RETENTION.
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EMPLOYEES WHO DO NOT ENJOY FIXED DEDUCTIONS FOR HOSPITAL SERVICES, MEDICINES, PROFESSIONAL SERVICES, TUITION OR SCHOOLING
REFERS TO THIS LAW, THEY MAY MAKE USE OF THE RIGHT TO DECLARE, FOR THE PURPOSE OF RETURN.
AT THE REQUEST OF THE DIRECTORATE GENERAL FOR INTERNAL TAXATION
THESALVADORAN INSTITUTE OF SOCIAL SECURITY, AS WELL AS THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM AND THE PENSION FUND MANAGERS ARE OBLIGED TO EXCHANGE INFORMATION TO EXERCISE RETENTION PAYMENT CONTROL BY AGENTS
RETENTION. (1) (19)
Different Rents
Art. 39.-NATURAL PERSONS DOMICILED OR NOT, WITH INCOME FROM VARIOUS SOURCES INCLUDING SALARIES, AND WHOSE AMOUNT DOES NOT EXCEED THE LIMIT STATED IN
PREVIOUS ARTICLE SHALL PRESENT THE CORRESPONDING SETTLEMENT. (1)
Sets
Art. 40.-The cultural, sports, artistic and similar sets, not domiciled, will calculate the tax by applying 5% on the gross income obtained at each event.
Legal person
Art. 41.-LEGAL PERSONS, UNIONS OF PERSONS, IRREGULAR SOCIETIES OR
IN FACT, DOMICILED OR NOT, SHALL CALCULATE THEIR TAX BY APPLYING TO THEIR TAXABLE INCOME THE RATE OF 30% (30%); EXCEPT FOR TAXABLE PERSONS WHO HAVE EARNED INCOME LESS THAN OR EQUAL TO ONE HUNDRED AND FIFTY THOUSAND DOLLARS (US$ 150,000), THE
WHICH WILL APPLY THE RATE OF TWENTY-FIVE PERCENT (25%).
EXCLUDE FROM THE CALCULATION OF THE TAX, THOSE INCOME THAT WOULD HAVE BEEN THE OBJECT
OF DEFINITIVE WITHHOLDING OF INCOME TAX ON ESTABLISHED LEGAL PERCENTAGES.
THE PROFITS OF THE DOMICILED PERSONS REFERRED TO IN THIS ARTICLE WILL BE TAXED WITH A SUPPLEMENTARY TAX WHEN THEY ARE DISTRIBUTED ACCORDING TO THE PROVISIONS OF THIS LAW. (13) (19)
Capital Gain
Art. 42.-THE INCOME TAX PAYABLE FOR THE NET CAPITAL GAIN OF ONE OR MORE TRANSACTIONS DETERMINED PURSUANT TO ARTICLE 14 OF THIS LAW SHALL BE THE EQUIVALENT OF TEN PERCENT (10%) OF SUCH GAINS, EXCEPT WHERE THE PROPERTY IS REALIZED
WITHIN THE TWELVE MONTHS FOLLOWING THE DATE OF ITS ACQUISITION, IN WHICH CASE THE NET INCOME OF CAPITAL SHALL BE ADDED TO THE ORDINARY NET TAXABLE INCOME AND THE TAX SHALL BE CALCULATED AS AN ORDINARY INCOME, ATTACHING TO THE TAX RETURN ON THE INCOME OF THE RESPECTIVE TAX YEAR, THE CALCULATION FORM
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OF THE CAPITAL GAIN.
IF THERE IS A BALANCE OF LOSS OF CAPITAL FROM PREVIOUS FINANCIAL YEARS OR PERIODS OF TAXATION, WHICH HAS NOT BEEN APPLIED TO CAPITAL GAINS, IT MAY BE DEDUCTED FROM THE NET PROFIT OF CAPITAL CALCULATED IN THE FINANCIAL YEAR OR PERIOD OF TAXATION CURRENT,
THE POSITIVE RESULT WILL BE SUBJECT TO THE TAX REFERRED TO IN THE PREVIOUS PARAGRAPH.
THE TAX PAYABLE FOR THE CAPITAL GAIN WHEN THE TRANSFER IS MADE
AFTER THE TWELVE MONTHS FOLLOWING THE ACQUISITION OF THE ASSET WILL BE ADDED TO THE TAX CALCULATED ON THE ORDINARY TAXABLE INCOME AND WILL BE PAID IN THE THE SAME PERIOD IN WHICH THE TAXPAYER IS REQUIRED TO SUBMIT THE
ANNUAL INCOME TAX AFFIDAVIT FOR THE YEAR OR PERIOD OF TAXATION, ATTACHING TO THAT STATEMENT THE CAPITAL GAIN CALCULATION FORM. OF THE LOSS IF ANY, WHICH MUST BE FILLED WITH THE REQUIREMENTS OF THE GENERAL DIRECTION. (14)
TITLE VI
SINGLE TAX LIABILITY CHAPTER
Existence
Art. 43.-REPEALED (12)
Enforceability
Art. 44. REPEALED (12)
Indivisibility
Art. 45.-REPEALED (12)
Fracting the tax due for a succession
Art. 46.-REPEALED (12)
Art. 47.-REPEALED (12)
TITLE VII
SETTLEMENT AND PAYMENT OF TAX
CHAPTER I SETTLEMENT
Settlement, presentation and modification of the declaration
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Art. 48.-The corresponding tax must be settled by means of affidavit, contained in form prepared by the General Directorate of Internal Revenue, and which must be filed within
of the four months following the expiration of the exercise or enforcement period in question.
REPEALED SECOND INDENT (8) (12)
REPEALED THIRD INDENT (8) (12)
FOURTH REPEALED (8) (12)
Liquidation in case of non-domiciled assemblies
Art. 49.-The local contractor and the representative of the cultural, artistic, sports or similar group not domiciled, are jointly and severally obliged to formulate and present the liquidation of the tax that of
compliance with this law corresponds to the set, the business day following the realization of each event.
Craft Liquidation
Art. 50.-REPEALED (12)
CHAPTER II
PAYMENT AND TAX RETENTION
Place of Payment
Art. 51.-The payment of the self-imposed tax must be effected within the period four months after the expiry of the financial year or period of taxation in question, by means of the order
of income drawn up by the taxpayer in form provided by the Internal Revenue Directorate.
The entry order will be filed in the cash service collections, or at the locations indicated by the Directorate General.
The Commission may, by agreement, authorise different sites for the presentation of the Tax and payment settlements.
Payment
Art. 52.-REPEALED (12)
ALLEGED PAYMENT
Art. 53.-THE AMOUNTS WHICH HAVE BEEN WITHHELD FROM THE NON-DOMICILED TAXABLE PERSONS ARE PRESUMED TO CONSTITUTE TAXES PAID AND WILL PASS TO THE GENERAL FUND OF THE NATION, THEREFORE THEY ARE NOT REQUIRED TO FILE THE TAX RETURN ON THE RESPECTIVE INCOME. (8) (18)
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NON-DOMICILED SUBJECTS, WHO HAVE OBTAINED INCOME IN THE COUNTRY, AND NOT SLE YOU HAVE HELD A WITHHOLDING TAX EITHER FOR NON-COMPLIANCE WITH THE AGENT, IF THERE IS
RULE THAT YOU DISAGREE TO HOLD THE RESPECTIVE RETENTION OR IF THERE IS NO OBLIGATION TO RETAIN, YOU MUST PRESENT THE RESPECTIVE DECLARATION WITHIN THE LEGAL PERIOD CORRESPONDING LIQUIDATING THOSE RENTS AND THE RESPECTIVE TAX. (8) (9) (18)
Retentions Return
Art. 54.-REPEALED (12)
Paid time for payment
Art. 55.-REPEALED (6)
Payment deadline expiration
Art. 56.-REPEALED (6)
Retention on remunerations
Art. 57.-The method of withholding income, for tax collection, interest
and fines that correspond to the persons obtaining income in the country, according to the provisions of this law, are applied.
They are not subject to retention of remuneration paid for services provided to a foreign government.
Retention Agent
Art. 58.-REPEALED (8) (14)
Art. 59.-REPEALED (14)
Retention on income in kind
Art. 60.-When the income subject to withholding is paid in kind, the withholding agent, to
meet its obligation, will calculate them in cash on the basis of the market value at the time of payment.
Retention Constance
Art. 61.-REPEALED (12)
Deadline to find retained
Art. 62.-The withholding agent will find out the sum retained to the charge of the perception of the
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tax, within ten business days immediately following expiration of the period in which the hold is held.
IN CASES THAT, PURSUANT TO THIS LAW, THE HOLDING AGENT CAN FIND OUT THE VALUE EQUIVALENT TO THE RETAINED INCOME TAX THAT WOULD BE PAYABLE TO YOU
AT THE RETENTION SUBJECT OF THE MONTH OF DECEMBER OF EACH YEAR, THE HOLDING AGENTS MUST FIND OUT THAT VALUE WITHIN THE RESPECTIVE LEGAL PERIOD IN THE DECEMBER DECLARATION OF THE YEAR IN WHICH THE COST OR EXPENSE WAS INCURRED, ACCORDING TO
CORRESPONDS. (12) (14)
REPEALED THIRD INDENT (12)
SECTION 1 Retention on permanent character services
Permanent character services retention
Art. 63.-REPEALED (12)
Permanent Service Concept
Art. 64. FOR THIS LAW, SERVICES OF A PERMANENT NATURE ARE CONSIDERED TO BE THOSE WHOSE PROVISION IS REGULATED BY LABOR LAW AND THEIR REMUNERATION IS THE ACCRUAL OF WAGES, SALARIES, BONUSES, OVERTIME, BONUSES, COMMISSIONS, BONUSES,
BILLS AND ANY OTHER COMPENSATION FOR PERSONAL SERVICES, WHETHER THEY ARE PAID IN CASH OR SPECIES AND WHERE THE PROVISION OF SERVICE IS FOR AN INDEFINITE PERIOD OR WHEN SUCH SERVICES ARE CONTRACTED FOR A SPECIFIED PERIOD OF TIME
BE FULL-TIME, HALF-TIME OR PART-TIME, WITH SUBORDINATION OR DEPENDENCY. (9)
Retention tables
Art. 65.-The Executive Body in the Finance Ramo will periodically review the tables of
corresponding retention, which will be understood as incorporated into the Rules of Procedure of this Law, which the President of the Republic has previously approved.
The portions to be retained, by means of those tables, must be in keeping with the provisions of Article 37 of this Law.
RETENTION AGENTS, IN ORDER TO GIVE TRUE COMPLIANCE TO THE APPLICATION OF THE HOLDS ESTABLISHED IN THE A DECREE CONTAINING THE INCOME TAX WITHHOLDING TABLES MUST COMPLY WITH THE OBLIGATIONS THAT THIS DECREE REGULATES,
WHICH CONSIST OF:
1) APPLY THE RETENTION TABLES CONTAINED IN THE RESPECTIVE EXECUTIVE DECREE;
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2) SUBTRACT FROM TOTAL REMUNERATION OF THE PERIOD THE AMOUNT OF INCOME
NOT SEVERE;
3) PERFORM A RECALCULATION TO DETERMINE THE RETENTION OF THE MONTHS OF JUNE
AND DECEMBER.
RETENTION SUBJECTS MUST MEET THE OBLIGATIONS SET OUT IN THE
DECREE CONTAINING THE RETENTION TABLES, CONSISTING OF:
1) INFORMING EACH EMPLOYER OR EMPLOYER THE EXISTENCE OF MORE THAN ONE JOB
AND THE AMOUNTS OF THE RESPECTIVE INCOME OF EACH OF THEM;
2) INFORM THEIR EMPLOYER TO WHICH OF THE INCOME THE RETENTION WILL BE APPLIED,
IN THE CASE THAT THE INCOME OBTAINED FROM THE DIFFERENT JOBS ARE EQUAL AMOUNT;
3) PREVIOUS EMPLOYER THE ISSUE AND DELIVERY OF A RETENTION RECORD IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 145 OF THE TAX CODE, TO BE DELIVERED TO YOUR NEW EMPLOYER.
FAILURE TO COMPLY WITH THE PREVIOUSLY REGULATED OBLIGATIONS, WHICH MUST BE UNDERSTOOD IN THE CORRESPONDING EXECUTIVE DECREE, WILL BE SANCTIONED WITH TWO MINIMUM MONTHLY SALARIES. (19)
SECTION 2
Services or eventual activities
HOLDS FOR SERVICE DELIVERY (8) (9)
Art. 66.-REPEALED (5) (8) (9) (14)
RETENTION IN CASE OF EXECUTIVE JUDGMENTS (8)
Art. 66-A. -REPEALED (8) (12)
SECTION 3 Retention by another income class
Retention to natural persons and other non-domiciled tax subjects
Art. 67.-REPEALED (14)
Retention Percentage Rebar
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Art. 68.-REPEALED (14)
Retention Percentage Rebar
Art. 69.-REPEALED (14)
Retention to revenue from deposits
Art. 70.-REPEALED (7) (14)
Awards Retention
Art. 71.-REPEALED (12)
CHAPTER III
INCOME TAX ON DISTRIBUTION OF UTILITIES (19)
Retention for Payment or Accreditation of Utilities (19)
Art. 72.-TAXABLE PERSONS DOMICILED WHO PAY OR CREDIT UTILITIES TO THEIR PARTNERS, SHAREHOLDERS, ASSOCIATES, TRUSTEES, UNIT-HOLDERS, INVESTORS OR
BENEFICIARIES, WILL BE REQUIRED TO RETAIN A PERCENTAGE OF FIVE PERCENT (5%) OF SUCH SUMS. SUCH WITHHOLDING TAX SHALL CONSTITUTE A DEFINITIVE PAYMENT OF THE INCOME TAX PAYABLE BY THE SUBJECT TO WHICH THE WITHHOLDING TAX IS MADE, WHETHER OR NOT IT IS DOMICILED.
IF THE RESPECTIVE PROFITS WERE NOT MADE TO THEM IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER, THEY MUST BE DECLARED SEPARATELY FROM
OTHER INCOME OBTAINED IN THE FINANCIAL YEAR OR PERIOD OF TAXATION AND PAY THE TAX AT THE RATE OF FIVE PER CENT (5%).
PROFITS SHALL BE UNDERSTOOD TO BE THE REMAINDER RESULTING FROM THE SUMMARY OF THE TAXABLE INCOME, EXEMPT AND NOT SUBJECT TO THE PAYMENT OF THE TAXABLE PERSON IN THE FINANCIAL YEAR OR PERIOD OF TAXATION MINUS THE COSTS, EXPENSES, DEDUCTIONS AND THE Tax
REGULATED IN ARTICLES 37 AND 41 OF THIS LAW.
PROFITS SHALL BE UNDERSTOOD TO HAVE BEEN PAID OR CREDITED, WHEN THEY ARE
ACTUALLY RECEIVED BY THE TAXABLE PERSON, IN CASH; SECURITIES, IN KIND, BY WAY OF COMPENSATION OF DEBTS, APPLICATION TO LOSSES OR BY MEANS OF ACCOUNTING OPERATIONS THAT GENERATE AVAILABILITY, WITHOUT DISTINCTION,
SUCH AS DIVIDENDS, SOCIAL INTERESTS, SURPLUSES, RESULTS, LEGAL RESERVE, PROFITS OR YIELDS.
THE RETENTION SET FORTH IN THIS CHAPTER, BY ITS SPECIAL CHARACTER,
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SHALL PREVAIL OVER ANY RULE THAT THE CONTRARIE; EXCEPT AS REGULATED IN THE ARTICLE 158-A OF THE TAX CODE. (2) (5) (12) (19)
Special Case Retention (19)
Art. 73.-REPRESENTATIVES OF PARENT COMPANIES, SUBSIDIARIES, BRANCHES, AGENCIES AND OTHER PERMANENT ESTABLISHMENTS THAT PAY OR CREDIT UTILITIES NOT DOMICILED IN EL SALVADOR SHALL RETAIN FIVE PERCENT (5%) IN THE CASE OF
INCOME TAX, AS SET OUT IN THE PREVIOUS ARTICLE.
IF THE RESPECTIVE HOLDS ARE NOT TO BE HELD IN ACCORDANCE WITH THE PROVISIONS OF THIS
CHAPTER, THE NON-DOMICILED SUBJECTS SHALL COMPLY WITH THE PROVISIONS OF ARTICLE 53, SECOND INDENT, OF THIS LAW. (12) (19)
Capital Decrease Retention (19)
Art. 74.-TAXABLE PERSONS DOMICILED IN EL SALVADOR SHALL RETAIN THE
TAX IN THE AMOUNT OF FIVE PERCENT (5%) ON THE AMOUNTS PAID OR CREDITED IN THE DECREASES IN CAPITAL OR EQUITY, IN THE PART CORRESPONDING TO PROFIT CAPITALIZATIONS OR REINVESTMENTS. FOR THESE PURPOSES, THE AMOUNTS PAID OR CREDITED FOR THE DECREASE IN CAPITAL OR EQUITY SHALL BE DEEMED TO BE
CORRESPONDING TO PREVIOUSLY CAPITALIZED PROFITS UP TO THE EXTENT OF THEIR AMOUNT. (12) (19)
Loan Retention (19)
Art. 74-A.-LEGAL PERSONS OR ENTITIES WITHOUT LEGAL PERSONALITY DOMICILED
IN THE SAVIOR, SHALL RETAIN FIVE PERCENT (5%) IN THE INCOME TAX FOR THE SUMS OF MONEY OR GOODS IN KIND THAT THEY GIVE IN CONCEPT OF LOANS, MUTUAL, ADVANCES OR ANY OTHER FORM OF FINANCING TO:
A) ITS PARTNERS, SHAREHOLDERS, ASSOCIATES, MEMBERS, TRUSTEES OR BENEFICIARIES AND THE SUBJECTS RELATED TO THEM AS PROVIDED IN
ARTICLE 25, FINAL PARAGRAPH OF THIS LAW.
(b) SUBJECTS OR ENTITIES CONSTITUTED, LOCATED OR DOMICILED ABROAD
IN COUNTRIES, STATES OR TERRITORIES OF LOW OR NO TAXATION OR TAX HAVENS.
(c) ITS PARENT HOUSE LOCATED OR DOMICILED ABROAD, OR, WHERE APPROPRIATE, A BRANCH, AGENCY OR OTHER ESTABLISHMENT LOCATED OR DOMICILED ABROAD RELATED TO ITS PARENT.
THE ABOVE WITHHOLDING AND THE PROVISIONS OF ARTICLE 25, FINAL PARAGRAPH OF THIS LAW, SHALL NOT APPLY WHERE THE LOAN, MUTUAL OR OTHER FORM OF FINANCING IS GRANTED IN ANY OF THE FOLLOWING CONDITIONS:
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1. THE INTEREST RATE HAS BEEN AGREED AT MARKET OR HIGHER PRICES.
2. THE CONTRACT HAS BEEN CONCLUDED BETWEEN FINANCIAL INSTITUTIONS REGULATED BY THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM.
3. THE CONTRACT HAS BEEN CONCLUDED BETWEEN PUBLIC OR PRIVATE ENTITIES WHICH ARE NORMALLY ENGAGED IN THE GRANTING OF LOANS.
4. THE CONTRACT HAS BEEN CONCLUDED BETWEEN THE SUBJECTS REFERRED TO IN THE NUMERALS 2 AND 3 ABOVE.
5. THE BORROWER IS THE STATE, MUNICIPALITY, AUTONOMOUS INSTITUTION, FUNDS OR TRUSTS CONSTITUTED BY THESE, AS WELL AS WHEN IT IS A CORPORATION OR FOUNDATION OF LAW OR PUBLIC UTILITY.
NOTWITHSTANDING THE PROVISIONS OF THE PRECEDING PARAGRAPH, FOR THE CASE OF NUMBER 1, IF THE BORROWER INCURS IN ARREARS THE PAYMENT OF MORE THAN SIX INSTALLMENTS OR THE PAYMENT DEADLINE
OF THE OR THE AGREED FEES IS GREATER THAN ONE YEAR, FOR THE BORROWER THAT THE TOTAL AMOUNT OF THE AGREED CONSIDERATION IS TAXABLE INCOME FOR THE BORROWER AND ACCRUED INTEREST WILL NOT BE DEDUCTIBLE AS COST OR EXPENSE FOR PURPOSES OF DETERMINING INCOME TAX. (19)
Waiver Cases (19)
Art. 74-B.-IT SHOULD NOT BE FOR THE RETENTION OR PAYMENT OF THE TAX TO WHICH
THE PRECEDING ARTICLES REFER TO WHEN:
(a) THE PROFITS HAVE BEEN THE SUBJECT OF WITHHOLDING AND WHOLE OF THE TAX THAT
DEALS WITH THIS CHAPTER IN PREVIOUS DISTRIBUTIONS;
b) CAPITAL GAINS IN NOMINATIVE OR SHAREHOLDINGS
SOCIAL OF THE SOCIETY ITSELF THAT PAYS THEM;
c) PROFITS ARE REINVESTED BY ENTITIES WITHOUT LEGAL PERSONALITY;
d) THE SUBJECT RECEIVING THE UTILITIES IS THE STATE AND ITS DEPENDENCIES, THE MUNICIPALITIES OR THE OTHER ENTITY GOVERNED BY PUBLIC LAW, FEDERATIONS AND
COOPERATIVE ASSOCIATIONS, AS WELL AS CORPORATIONS OR FOUNDATIONS OF PUBLIC UTILITY THAT ARE EXCLUDED UNDER ARTICLE 6 OF THIS ACT.
THE AUTONOMOUS OFFICIAL INSTITUTIONS, INCLUDING THE EXECUTIVE COMMISSION OF THE LEMPA RIVER, WILL BE SUBJECT TO THE PAYMENT OF THE TAX, HOWEVER THE LAWS FOR WHICH THEY ARE GOVERNED HAVE EXEMPTED THEM FROM ALL KINDS OF TAXES.
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THE EXEMPTION PROVIDED FOR IN THIS ARTICLE MUST BE CHECKED BY THE TAXABLE PERSON BEFORE THE GENERAL DIRECTORATE OF INTERNAL TAXATION. (19)
Utility Control Record (19)
Art. 74-C.-TAXABLE PERSONS SHALL BE REQUIRED TO KEEP A RECORD OF CONTROL OF THE EARNINGS PER YEAR OR PERIOD OF TAXATION THAT CONTAINS THE DETERMINATION OF THEIR AMOUNT, THE AMOUNT OF THE PAYMENTS OR CREDITS, THEIR CAPITALIZATION OR REINVESTMENT AND THE DECREASES
OF CAPITAL OR EQUITY, WHICH ALLOWS THE IDENTIFICATION OF SECURITIES BY THE ABOVE CONCEPTS, BY EACH PARTNER, SHAREHOLDER, ASSOCIATE, PARTICIPANT, TRUSTEE OR BENEFICIARY, WHICH SHALL CORRESPOND TO THE ACCOUNTS. THE
GENERAL INTERNAL TAX DIRECTORATE
ISSUE THE RELEVANT ADMINISTRATIVE RULES, TAKING INTO CONSIDERATION THE NATURE OF THE TRANSACTION LOG. FAILURE TO COMPLY WITH THIS OBLIGATION SHALL BE SUBJECT TO THE PROVISIONS OFARTICLE 242 (B) AND (C) (1) OF THE TAX CODE. (19)
CHAPTER IV PERCEPTION
perceptor Officer
Art. 75.-The cash service collectors in all the Departments of the Republic, are the officials responsible for the perception of Income Tax, interest, fines, withholding and advances to account.
However, according to to the needs, the Ministry of Finance, through contract or agreement, will be able to enable for the perception of these rents, other Collectors, such as credit institutions,
associations of savings and loan, or others.
Collectors will issue, for the payments they receive, the corresponding receipts in the
authorized forms, each time noting the payment date and authorizing it with its signature and stamp.
CHAPTER V MINIMUM INCOME TAX PAYMENT (19) (22)
Liabilities and Imposed Subject (19) (22)
Art. 76. THE ANNUAL INCOME TAX SHALL HAVE A MINIMUM PAYMENT, THE OPERATIVE EVENT OF WHICH IS CONSTITUTED BY THE POSSESSION OF NET ASSETS IN THE FINANCIAL YEAR OR PERIOD OF TAXATION.
THE TAXABLE PERSONS OF THIS MATERIAL OBLIGATION ARE THOSE REGULATED IN ARTICLE 5 OF THIS ACT. (12) (19) (22) ** DECLARED UNCONSTITUTIONAL
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Imposable Base, Tax Alicuota (19) (22)
Art. 77.-THE MINIMUM PAYMENT OF INCOME TAX WILL BE SETTLED ON THE AMOUNT OF NET ASSET, WITH THE ALIQUOT OF ONE PERCENT (1%).
THE AMOUNT OF THE NET ASSET SHALL BE DETERMINED BY SUBTRACTING TO THE VALUE OF THE TOTAL ASSET, THE SUM OF THE SECURITIES OF THE ACCUMULATED DEPRECIATION AND AMORTISATION, THE NON-OPERATING FIXED ASSETS, THE ASSETS HELD ABROAD, THE SHARES IN OTHER
SALVADORAN COMPANIES AND THE BALANCE OF FINANCIAL OBLIGATIONS RELATED TO FIXED ASSETS THAT ARE IN OPERATION. THEY SHALL ALSO BE DEDUCTED FROM THE TOTAL ASSET, THE ASSETS FOR AGRICULTURE AND LIVESTOCK FARMING, EXCEPT AGRO-INDUSTRY.
TO DETERMINE THE VALUE OF THE ASSETS AND RIGHTS THAT ARE PART OF THE TOTAL ASSET, AS WELL AS THE VALUE OF THE FINANCIAL OBLIGATIONS, THE TECHNICAL STANDARDS
ACCOUNTING OFFICERS AUTHORIZED BY THE SUPERVISORY BOARD OF THE PROFESSION OF THE PUBLIC ACCOUNTING AND AUDITING. SUBJECTS NOT REQUIRED TO CARRY OUT FORMAL ACCOUNTING, SHALL USE THE NOMINAL VALUE ACCORDING TO DOCUMENTS AND RECORDS, SHALL ALSO APPLY THE PROVISIONS OF
THIS LAW ON DEPRECIATION AND AMORTIZATION.
BANKS, COOPERATIVE SAVINGS AND CREDIT COMPANIES, AS WELL AS SAVINGS AND CREDIT COMPANIES, SUPERVISED BY THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM,
WILL BE ABLE TO DEDUCT FROM THE TOTAL ASSET THE VALUE OF THE REAL ESTATE RECEIVED IN PAYMENT OR LIENS THAT ARE PART OF THEIR EXTRAORDINARY ASSETS.
IF THE SUBJECT IS REQUIRED TO CARRY OUT FORMAL ACCOUNTING IT MAY SUBTRACT FROM THE TOTAL ASSET, THE VALUE OF THE TECHNICAL RESERVES THAT HAVE BEEN INCORPORATED ACCORDING TO RULES OF REGULATORY AUTHORITY AND THAT OF THE ACCOUNTING PROVISIONS ACCORDING TO THE
ACCOUNTING STANDARDS AUTHORIZED BY THE SUPERVISORY BOARD OF THE PUBLIC ACCOUNTING AND AUDIT PROFESSION.
THE TAXABLE AMOUNT OF THE NET ASSET SHALL NOT EXCEED THE AMOUNT OF GROSS INCOME TAXED FOR THE FINANCIAL YEAR OR PERIOD OF TAXATION. (2) (12) (19) (21) (22) ** DECLARED UNCONSTITUTIONAL
Subject Exempt to Minimum Definitive Payment (12) (19) (22)
Art. 78.-THEY SHALL NOT BE SUBJECT TO THE MINIMUM INCOME TAX PAYMENT:
(a) NATURAL PERSONS WHO OBTAIN INCOME EXCLUSIVELY FROM WAGES
AND SALES;
(b) USERS OF INDUSTRIAL AND MARKETING FREE ZONES;
IMPROVEMENT OF ASSETS; PARKS AND SERVICE CENTERS; SUBJECTS COVERED BY THE GENERAL LAW OF COOPERATIVE ASSOCIATIONS AND THOSE COVERED BY ARTICLE 6 OF THIS ACT;
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c) THE FUNDS AND TRUSTS FINANCED BY THE STATE OF EL SALVADOR, AGENCIES INTERNATIONAL OR FOREIGN GOVERNMENTS;
d) PERSONS EXEMPT FROM INCOME TAX BY LAW;
e) THE SUBJECTS MENTIONED IN ARTICLE 76 OF THIS LAW, DURING THE FIRST THREE YEARS OF THEIR COMMENCEMENT OPERATIONS, PROVIDED THAT THE ACTIVITY HAS BEEN CONSTITUTED BY NEW INVESTMENTS, EXCLUDING SUCH CASES
WHERE ACQUISITIONS OF ASSETS OR RIGHTS ARE PRE-EXISTING. THE TIME LIMIT SHALL BE COUNTED FROM THE ENTRY IN THE REGISTER AND SPECIAL CONTROL OF TAXPAYERS TO THE TAX;
(f) TAXPAYERS IN A GIVEN SECTOR OF ECONOMIC ACTIVITY WHO HAVE BEEN AFFECTED BY EXCEPTIONAL CIRCUMSTANCES IN EXCEPTIONAL CIRCUMSTANCES. ITS
OPERATIONS, EXISTING DECLARATION OF STATE OF PUBLIC CALAMITY AND DISASTER BY THE LEGISLATIVE ASSEMBLY, STATE OF EMERGENCY DECREED, IF ANY, BY THE PRESIDENT OF THE REPUBLIC, ACCORDING TO THE
RESPECTIVE LEGISLATION, OR FOR REASONS OF FORTUITOUS CASE OR FORCE MAJEURE; AND,
g) THE TAXPAYERS WHO HAVE OBTAINED INCOME TAXED UP TO ONE HUNDRED
FIFTY THOUSAND DOLLARS (US$ 150,000.00) IN THE EXERCISE OR PERIOD OF TAXATION.
FOR THE PURPOSES OF THE APPLICATION OF THE ABOVE EXEMPTIONS, TAXPAYERS SHALL SUBMIT AN AFFIDAVIT BY MEANS OF THE FORM TO BE DETERMINED BY THE TAX ADMINISTRATION; FOR THE ASSUMPTIONS OF ECONOMIC CONDITIONS
EXCEPTIONAL CASES, FORTUITOUS CASES OR FORCE MAJEURE MUST BE ACCOMPANIED BY DOCUMENTARY EVIDENCE PROVING SUCH EXTREMES. THE TAX ADMINISTRATION MAY EXERCISE ITS POWERS TO CHECK THE CONTENT OF THAT DECLARATION. (12)
(19) (20) (22) ** DECLARED UNCONSTITUTIONAL
Minimum Payment Settlement and Statement (19) (22)
Art. 79.-THE TAXABLE PERSON SHALL LIQUIDATE AND DECLARE THE MINIMUM INCOME TAX PAYMENT, IN THE SAME INCOME TAX RETURN OF THE YEAR OR PERIOD
OF CORRESPONDING TAXATION. (12) (19) (22) ** DECLARED UNCONSTITUTIONAL
Income Tax Payment (19) (22)
Art. 80.-THE INCOME TAX PAYABLE IN THE FINANCIAL YEAR OR PERIOD OF TAXATION SHALL BE EQUAL TO THE GREATER AMOUNT RESULTING FROM THE COMPARISON OF THE MINIMUM PAYMENT OF THE TAX ON
THE INCOME AS PROVIDED FOR IN ARTICLE 77, WITH THE TAX CALCULATED ON THE NET INCOME IN ACCORDANCE WITH ARTICLES 37 AND 41. (12) (19) (22) ** DECLARED UNCONSTITUTIONAL
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Credit and Return (19) (22)
Art. 81.-AT THE INCOME TAX DETERMINED IN ACCORDANCE WITH THE PREVIOUS ARTICLE, THE AMOUNTS OF PAYMENT TO ACCOUNT AND DEDUCTIONS TO WHICH THE TAXABLE PERSON IS ENTITLED WILL BE CREDITED. IF THE LIQUIDATION RESULTS IN LIQUID TAX IN FAVOR OF THE STATE, THIS
MUST BE PAID WITHIN THE LEGAL PERIOD ESTABLISHED IN THIS LAW; IF THERE IS A BALANCE IN FAVOR OF THE TAXPAYER, IT WILL APPLY THE REGULATED IN THE TAX CODE.
THE MINIMUM PAYMENT AMOUNT ON THE NET ASSET THAT WILL EXCEED INCOME TAX IN AN EXERCISE OR PERIOD OF TAXATION AND WHICH HAS BEEN PAID, MAY BE CREDITED IN FUTURE FINANCIAL YEARS OR PERIODS OF TAXATION AT THE OPTION OF THE TAXABLE PERSON
AGAINST:
(a) THE AMOUNT OF THE PAYMENT INTEGERS TO ACCOUNT FOR INCOME TAX,
UNTIL EXHAUSTION DURING THE FOLLOWING THREE PERIODS OF IMMEDIATE IMPOSITION; AND,
(b) THE AMOUNT OF THE TAX ON THE INCOME TAX. IT SHALL BE USED FOR THE FOLLOWING THREE PERIODS OF IMMEDIATE IMPOSITION.
THE REMAINDER OF THE MINIMUM NET ASSET PAYMENT THAT IS NOT CREDITED
AS REGULATED IN THIS ARTICLE, SHALL BE CONSIDERED AS A DEDUCTIBLE EXPENSE FOR THE PURPOSES OF THE INCOME TAX OF THE FINANCIAL YEAR OR SETTLEMENT PERIOD THE TIME LIMIT REFERRED TO IN THIS PROVISION IS FINAL. (2) (19) (22)
** DECLARED UNCONSTITUTIONAL
TITLE VII
ONLY CHAPTER
RETURNS AND COMPENSATION
Returns
Art. 82. -REPEALED (8) (12)
Compensation
Art. 83.-REPEALED (12)
TITLE IX
SINGLE CHAPTER OF PRESCRIPTION AND CONFUSION OF TAX OBLIGATION
Prescription
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Art. 84. -REPEALED (12)
Art. 85.-REPEALED (12)
Prescription Pashes
Art.86.-REPEALED (12)
Confusion
Art. 87. -REPEALED (12)
TITLE X
ONLY CHAPTER
COACTIVE COLLECTION
Mora Tax Collection
Art. 88.-REPEALED (6)
Instrument with Executive Force
Art. 89.-REPEALED (6)
TITLE XI
ONLY CHAPTER
SUBJECT DUTIES
Required to register and report
Art. 90. -REPEALED (12)
Payment of tax when a company is settled
Art. 91. -REPEALED (12)
Obligation to declare and pay
Art. 92.-All that under this law is subject to the tax, whether registered or not, is obliged to make, for each tax year, before the General Directorate of Internal Revenue, the settlement of their income and the respective tax and payment of the itself, by means of affidavit in the forms supplied by the same General Directorate, or by whom it has been specially
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authorized by it for that purpose.
They are also required to to make such a settlement by means of a sworn declaration, even if they are not obliged to pay the tax:
1) NATURAL PERSONS DOMICILED WITH TAXABLE INCOME IN EXCESS OF THE EXEMPT BASE CONTAINED IN ARTICLE 37 OF THIS ACT WITHIN AN EXERCISE OR PERIOD OF TAXATION. (19)
2) Legal persons;
3) Subjects who are required to carry out formal accounting;
4) Any subject to whom the tax has been withheld, either total or
partially;
5) declared in the previous financial year;
6) Successions;
7) Trusts;
8) Cultural, artistic, sporting or similar sets, not domiciled, instituted as subjects in this law;
9) All subjects affects the payment of stamp duty.
ALL SUBJECTS REGISTERED AS CONTRIBUTORS OF TAX ON THE TRANSFER OF MOVABLE PROPERTY AND THE PROVISION OF SERVICES. (8)
EXCEPT AS PROVIDED FOR IN THE PRECEDING NUMBERS, THE NATURAL PERSONS EMPLOYED UNDER ARTICLE 38 OF THIS ACT. (19)
Revenue Control and Research
Art. 93. -REPEALED (12)
Records and Accounting
Art. 94. -REPEALED (12)
Obligation to forward office employee lists
Art. 95.-REPEALED (8) (12)
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UTILITIES REPORT
ART. 96.-REPEALED (8) (12)
Obligation to constitute representative
Art 97.-REPEALED (12)
Place to hear notifications
Art. 98.-REPEALED (12)
TITLE XII
ONLY CHAPTER
SANTIONS
Fine for not presenting the declaration in time
Art. 99. -REPEALED (8) (12)
Tax Payment arrears
Art. 100.-REPEALED (4)
Term Payment Interest
Art. 101.-REPEALED (4)
Multa for violation of formal duties of the obligated
Art. 102.-REPEALED (12)
Unintentional Evasion
Art. 103.-REPEALED (12)
Intact Evasion
Art. 104.-REPEALED (12)
Sanctions for the retention agent
Art. 105.-REPEALED (12)
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PENALTIES FOR TAXABLE PERSONS (8)
Art. 105-A.-WHEN SUBJECTS WHO ARE OBLIGED TO ADVANCE OR PAY TO ACCOUNT THAT IN ACCORDANCE WITH ARTICLE 72 (6) DO NOT DECLARE OR PAY IN THE ESTABLISHED TERM WHAT CORRESPONDS TO THAT CONCEPT, AN EQUIVALENT FINE SHALL BE APPLIED TO THEM
50% OF THE SUM LEFT TO FIND OUT. THE SAME PENALTY SHALL APPLY TO SUCH SUBJECTS WHEN THEY OMIT FOR ANY CIRCUMSTANCE TO PRESENT THE RESPECTIVE DECLARATION, EVEN IF THERE IS NO TAX PAYABLE. IN NO CASE, THE FINES WILL BE LESS THAN A THOUSAND COLONES.
IN THESE CASES, FINES SHALL BE DEEMED TO BE IMPOSED AND REPORTED BY THE DIRECTORATE-GENERAL, FROM THE TIME THE TAXPAYER HAS PLACED THEM ON THE
RESPECTIVE DECLARATION FORM. OF THE FINES THUS IMPOSED, NO APPEAL WILL PROCEED, BUT YOU WILL HAVE THE RIGHT TO REQUEST THE RELEVANT AS UNDUE OR EXCESSIVE PAYMENT, FOR WHICH YOU WILL BE GRANTED A PERIOD OF THIRTY DAYS PEREMPTORY,
WHICH, RESOLVED WILL BE APPEALABLE.
IF THE TAXPAYER EFFECTIVELY MAKES THE FINE AT THE TIME OF FILING
DECLARATION, THE INFRINGEMENT SHALL NOT BE CONSIDERED FOR THE PURPOSES OF ARTICLE 107. OTHERWISE, THE FINE SHALL BE PAYABLE FROM THE TIME OF ITS NOTIFICATION, WITHOUT PREJUDICE TO THE INFRINGEMENT TO QUALIFY THE REITERATION PROVIDED FOR IN ARTICLE 107. (5) (8)
Rules for the imposition of fines and interest
Art. 106. -REPEALED (8) (12)
Art. 107. -REPEALED (12)
Art. 108.-REPEALED (8) (12)
TITLE XIII
OF THE TAX ADMINISTRATION
CHAPTER I
From the Internal Revenue Directorate
Art. 109.-REPEALED (12)
Action nullity
Art. 110.-REPEALED (12)
OBLIGATION OF OFFICIALS AND EMPLOYEES TO KEEP SECRET
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Art. 110-A.-REPEALED (2) (8) (12)
CHAPTER II INFORMATION AND RECORDS
Art. 111.-REPEALED (12)
Art. 112. -REPEALED (8) (12)
CHAPTER III
FISCATION
Art. 113.-REPEALED (12)
Art. 114.-REPEALED (12)
Art. 115.-REPEALED (8) (12)
Art. 116. -REPEALED (12)
CHAPTER IV TRADE SETTLEMENT OF THE TAX OBLIGATION
Art. 117.-REPEALED (12)
Art. 118. -REPEALED (12)
PARTIAL ACCEPTANCE OF AUDIT (8)
Art. 118-A. REPEALED (8) (12)
Indices
Art. 119.-REPEALED (12).
Art. 119-A.-REPEALED (8) (12)
Expiration
Art. 120.-REPEALED (12)
TITLE XIV
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CHAPTER SINGLE PROCEDURES
Of the trade settlement
Art. 121.-REPEALED (12)
Art. 122.-REPEALED (12)
From Notification
Art. 123.-REPEALED (12)
Art. 124.-REPEALED (12)
Art. 125.-REPEALED (12)
TITLE XV
SINGLE GENERAL AND TRANSIENT PROVISIONS
Art. 126.-THE REGULATIONS REGARDING NON-DEDUCTIONS CONTAINED IN ARTICLE 29 (1), (4), (5), (11) AND FINAL SUBPARAGRAPH, AND ARTICLE 29A (3), (6), (16) AND (20) ALL
OF THIS LAW; THEY ARE INCORPORATED FOR THE PURPOSE OF FACILITATING THE APPLICATION OF THE RULES AND DO NOT CONSTITUTE NEW RULES OF NON-DEDUCTION. (12) (18)
Calculation of the partially obtained income in El Salvador
Art. 127.-As long as the corresponding international treaties are not signed, to determine
the proportion which of the income of activities carried out partially in the national territory, must be considered as obtained in the country, use the following method:
1) The gross income obtained directly in El Salvador shall be divided into each activity between the total gross income obtained by the taxpayer for that activity;
2) The ratio thus obtained shall be applied to the total expenditure verified by the taxpayer in each activity. The result is the amount of deductible expenses of the gross income directly perceived in the country;
3) The difference between the gross income received directly in El Salvador and the deductible expenses in accordance with the numeral prior, it will be the net income that is considered to be perceived in the country, from activities partially performed in the
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itself; and
4) Net income thus determined shall be added, if applicable, to the net income obtained entirely in the country.
Foreign paid income tax credit
Art. 128.-REPEALED (2)
Art. 129.-REPEALED (2) (12)
Art. 130.-REPEALED (12)
Art. 130-A.-REPEAL LEGISLATIVE DECREE NO. 126 DATED SEPTEMBER 5, 1985,
PUBLISHED IN THE OFFICIAL JOURNAL NO. 186, TOOK 289 OF OCTOBER 3 OF THE SAME YEAR. (2)
Derogatorias and Effective
Art. 131.-Legislative Decree No. 472 of 19 December 1963, published in Official Journal No. 241, Volume No. 201 of 1 21 of the same month and year, and its reforms.
Art. 132.-Special exercises initiated after the first day of January 1991 shall be settled in accordance with the provisions of this law.
Goods of use which have been started to be depreciated in accordance with the provisions of the law repealed, shall continue with such a system, until the useful life of the good is exhausted.
THE OPERATIVE EVENTS OCCURRING WITHIN THE VALIDITY OF THE PRECEDING LAW SHALL BE GOVERNED IN ACCORDANCE WITH IT IN ITS SUBSTANTIVE, PROCEDURAL AND FORMAL, UNLESS THE TAXPAYER EXPRESSLY AND VOLUNTARILY ENGAGES THE
MEMBERS OF THE NEW LAW. HOWEVER, THE PROVISIONS OF ARTICLE 11 OF THE LAW ON THE ORGANISATION AND OPERATION OF THE COURT OF APPEAL OF INTERNAL TAXATION SHALL APPLY IN THE CASE OF APPEALS. (2)
Art. 132-A.-FOR THE PURPOSES OF ART. 22 OF THE INCOME TAX LAW REPEALED BY LEGISLATIVE DECREE NO. 134, DATED DECEMBER 18, 1991, PUBLISHED
IN THE OFFICIAL JOURNAL NO. 242, TOOK 313, 21 OF THE SAME MONTH AND YEAR, THE UTILITIES DISTRIBUTABLES CORRESPONDING TO THE TAX YEARS OF THE YEARS 1990 AND 1991 PENDING CAPITALIZATION AT 31 DECEMBER OF THE LAST OF THE YEARS CITED, SE
CONSIDER GENERATED FOR THE SHAREHOLDERS TO THE RESPECTIVE CLOSING DATES OF THE ABOVE TAX YEARS, THE ABOVE LAW WILL THEREFORE APPLY. (2)
Art. 132-B.-EXEMPTIONS AS REGARDS INCOME TAX, AS SET OUT IN ARTICLE 8 OF THE LAW OF THE PRINTING WORKS, OF LEGISLATIVE DECREE NO 12 OF 6 OCTOBER 1950, PUBLISHED IN THE OFFICIAL JOURNAL NO 219, TOOK PLACE N ° 149 OF 9 OCTOBER. OF THE SAME YEAR AND ITS CORRESPONDING REFORMS. THIS REPEAL DOES NOT APPLY TO
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THE EXEMPTIONS SET OUT IN THE BOOK. (22)
Art. 133.-This Decree shall enter into force on the first day of January of one thousand nine hundred and ninety-two, prior to the corresponding publication in the Official Journal.
GIVEN IN THE BLUE HALL OF THE LEGISLATIVE PALACE: San Salvador, at eighteen days of December of a thousand nine hundred and ninety-one.
Luis Roberto Angulo Samayoa, President
Ciro Cruz Zepeda Peña, Ruben Ignacio Zamora Rivas,
Vice President. Vice President Mercedes Gloria Salguero Gross,
Vice President
José Francisco Guerrero Munguía, Rene Flores Aquino, Secretary. Secretary.
Ernesto Taufik Kuri Asprides, Raul Antonio Peña Flores, Secretary. Secretary.
Reynaldo Quintanilla Prado, Secretary.
CASA PRESIDENTIAL: San Salvador, at the twenty-one day of the month of December of a thousand nine hundred and ninety-one.
PUBESLOSE,
ALFREDO FÉLIX CRISTIANI BURKARD, President of the Republic.
Rafael Eduardo Alvarado Cano, Ministry of Finance.
D.O. No. 242
TOO NO 313 DATE: 21 December 1991
REFORMS:
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(1) D.L. Nº 175, FEBRUARY 13, 1992; D.O. NO 35, T. 314, FEBRUARY 21, 1992.
(2) D.L. Nº 250, 21 MAY 1992; D.O. NO. 101, T. 315, 3 JUNE 1992.
(3) D.L. Nº 713, NOVEMBER 18, 1993; D.O. NO. 230, T. 321, DECEMBER 10, 1993.
(4) D.L. Nº 720, NOVEMBER 24, 1993; D.O. NO 1, T. 322, JANUARY 3, 1994. (Deoga Arts. 100 and 101)
(5) D.L. Nº 164, OCTOBER 11, 1994; D.O. NO. 201, T. 325, OCTOBER 31, 1994.
(6) D.L. Nº 516, NOVEMBER 23, 1995; D.O. NO. 7, T. 330, JANUARY 11, 1996. (Deoga Arts. 55, 56, 88, and 89)
(7) D.L. Nº 841, OCTOBER 3, 1996; D.O. NO. 201, T. 333, OCTOBER 25, 1996.
(8) D.L. Nº 712, SEPTEMBER 16, 1999; D.O. NO. 187, T. 345, OCTOBER 8, 1999.
(9) D.L. Nº 765, NOVEMBER 18, 1999; (Declares Unconstitutional Art. 3) D.O. NO. 239, T. 345, DECEMBER 22, 1999.
(10) D.L. Nº 777, NOVEMBER 24, 1999; D.O. NO. 239, T. 345, DECEMBER 22, 1999.
(11) D.L. Nº 780, NOVEMBER 24, 1999; D.O. NO. 239, T. 345, DECEMBER 22, 1999.
(12) D.L. NO 230, DECEMBER 14, 2000; (Partial Repeal) D.O. No. 241, T. 349, DECEMBER 22, 2000.
(13) D.L. Nº 577, OCTOBER 18, 2001; D.O. NO. 198, T. 353, OCTOBER 19, 2001.
(14) D.L. NO 496, OCTOBER 28, 2004; D.O. NO. 231, T. 365, DECEMBER 10, 2004.
(15) D.L. Nº 646, MARCH 17, 2005; D.O. NO 55, T. 366, MARCH 18, 2005.
(16) D.L. No. 182, DECEMBER 14, 2006;
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D.O. No. 4, T. 374, JANUARY 8, 2007.
(17) D.L. No. 504, DECEMBER 7, 2007; D.O. NO. 238, T. 377, DECEMBER 20, 2007.
(18) D.L. No. 236, DECEMBER 17, 2009; D.O. No. 239, T. 385, DECEMBER 21, 2009.
(19) D.L. No. 957, DECEMBER 14, 2011; D.O. No. 235, T. 393, DECEMBER 15, 2011.
(20) D.L. No. 154, OCTOBER 4, 2012; D.O. NO. 202, T. 397, OCTOBER 29, 2012.
(21) D.L. No. 233, DECEMBER 14, 2012; D.O. NO. 238, T. 397, DECEMBER 19, 2012.
(22) D.L. No. 762, JULY 31, 2014; D.O. No. 142, T. 404, JULY 31, 2014.
AUTHENTIC INTERPRETATION:
D.L. Nº 629, AUGUST 25, 1993;
D.O. NO 179, T. 320, SEPTEMBER 27, 1993.
VETOED DECREES:
D.L. NO 505, DECEMBER 9, 1998;
D.O. NO, T., DE.
D.L. Nº 1228, APRIL 23, 2003; (Art. 48)
D.O. NO, T., DE.
UNCONSTITUTIONALITIES:
*THE CONSTITUTIONAL ROOM OF THE SUPREME COURT OF JUSTICE, BY MEANS OF SENTENCE WITH REFERENCE No. 18-2012, PUBLISHED IN THE OFFICIAL JOURNAL No. 216, TOOK 401, ON NOVEMBER 19, 2013, DECLARES UNCONSTITUTIONAL THE ARTS. 76, 77, 78, 79, 80 AND 81, SINCE THESE PROVISIONS FORM PART OF A UNIFORM AND SYSTEMATIC REGULATION OF THE DEFINITIVE MINIMUM PAYMENT OF INCOME TAX AND IN DETERMINING THE TAXABLE AMOUNT OF INCOME TAX IN RESPECT OF GROSS INCOME OBTAINED, WITHOUT THE POSSIBILITY OF DEDUCTION OF THE COSTS AND EXPENSES NECESSARY FOR THEIR PRODUCTION AND THE CONSERVATION OF ITS SOURCE, SUCH PROVISIONS VIOLATE THE TAX EQUITY, IN ITS MANIFESTATION OF THE PRINCIPLE OF ECONOMIC CAPACITY ESTABLISHED IN ART. 131 ORD. 6 ° CN. (JQ/10/12/13)
* (These items were subsequently reformed by D.L. No. 762/2014)
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**THE CONSTITUTIONAL ROOM OF THE SUPREME COURT OF JUSTICE, BY THE STATEMENT No. 98-2014, PUBLISHED IN D. O. No. 71, T. 407, APRIL 22, 2015, DECLARES ART. 77 UNCONSTITUTIONAL, BECAUSE IT VIOLATES THE PRINCIPLE OF TAX EQUITY IN ITS ECONOMIC CAPACITY-ART DEMONSTRATION. 131 ORD. 6 ° CN.-AS SOON AS IT DETERMINES THAT THE NET ASSET IS THE TAXABLE AMOUNT OF THE MINIMUM INCOME TAX PAYMENT, WITHOUT THE POSSIBILITY OF DEDUCTION OF THE COSTS AND EXPENSES NECESSARY FOR THE PRODUCTION OF THE INCOME AND THE PRESERVATION OF ITS SOURCE; AND BY CONNECTION THE ARTS. 76, 78, 79, 80 AND 81, AS SOON AS THEY LIMIT THEMSELVES TO SUPPLEMENT OR TO DEVELOP THE MINIMUM PAYMENT OF INCOME TAX, SO THAT THEY SHARE THE VICE OF CONTRAST. (JQ/21/05/15)
RELATED PROVISIONS:
S TRANSIENT SPECIAL ARRANGEMENT TO EXEMPT INCOME TAX WITHHOLDING FOR THE YEAR 2009, REVENUE THAT IS IN CONCEPT
DE AGUINALDO, RECEIVE THE WORKERS REFERRED TO IN THE LABOR CODE AND THE LAW ON ADDITIONAL CASH COMPENSATION. D. L. No. 215, DECEMBER 3, 2009;
D. O. No. 228, T. 385, DECEMBER 4, 2009.
S INCOME AS UNTAXED INCOME, FOR THE YEAR 2009, ANY CASH COMPENSATION PAID TO THE SALARIED WORKER IN THE GUINALDO CONCEPT,
WHEN NOT EXCEEDING TWO MINIMUM WAGES. D. L. No. 228, 16 DECEMBER 2009; D. O. NO. 241, T. 385, DECEMBER 23, 2009.
S TRANSIENT SPECIAL ARRANGEMENT TO EXEMPT FROM WITHHOLDING
INCOME TAX FOR THE YEAR 2010, THE INCOME THAT IN CONCEPT OF AGUINALDO, RECEIVE THE WORKERS REFERRED TO IN THE LABOR CODE AND THE LAW ON ADDITIONAL CASH COMPENSATION.
D. L. No. 530, DECEMBER 2, 2010; D. O. NO. 228, T. 389, DECEMBER 6, 2010.
S TRANSIENT SPECIAL PROVISION TO EXEMPT INCOME TAX WITHHOLDING FOR THE YEAR 2011, REVENUES THAT ARE IN THE CONCEPT OF AGUINALDO, RECEIVE THE WORKERS REFERRED TO IN THE
WORK AND THE LAW ON ADDITIONAL CASH COMPENSATION. D. L. No. 926, 23 NOVEMBER 2011; D. O. No. 220, T. 393, NOVEMBER 24, 2011.
S TRANSITIONAL PROVISION TO EXEMPT INCOME TAX WITHHOLDING FOR 2012, INCOME THAT IS IN THE CONCEPT OF AGUINALDO,
RECEIVE WORKERS REFERRED TO IN THE LABOR CODE AND THE LAW ON THE ADDITIONAL CASH COMPENSATION. D. L. No. 212, NOVEMBER 28, 2012; D. O. NO. 229, T. 397, DECEMBER 6, 2012.
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S TRANSIENT PROVISION TO EXEMPT TAX WITHHOLDING
ABOUT THE INCOME FOR 2013, THE INCOME THAT IN THE CONCEPT OF AGUINALDO, RECEIVE THE WORKERS TO WHICH THE LABOR CODE REFERS AND THE LAW ON THE ADDITIONAL COMPENSATION IN CASH.
D. L. No. 561, NOVEMBER 28, 2013; D. O. NO. 226, T. 401, DECEMBER 3, 2013.
S TRANSITIONAL PROVISION TO EXEMPT INCOME TAX WITHHOLDING FOR 2014, THE INCOME THAT IS RECEIVED BY THE WORKERS TO THE LABOR CODE AND THE LAW
ON THE ADDITIONAL CASH COMPENSATION. D. L. No. 877, NOVEMBER 27, 2014, D. O. NO. 227, T. 405, DECEMBER 4, 2014.
- TRANSIENT PROVISION TO EXEMPT INCOME TAX WITHHOLDING FOR 2015, INCOME THAT IS IN THE CONCEPT OF AGUINALDO,
RECEIVE WORKERS REFERRED TO IN THE LABOR CODE AND THE LAW ON THE ADDITIONAL CASH COMPENSATION. D. L. No. 177, NOVEMBER 12, 2015, D. O. NO. 216, T. 409, NOVEMBER 24, 2015.
REGULATION:
D.E. NO. 101, DECEMBER 21, 1992; D.O. NO. 235, T. 317, DECEMBER 21, 1992.
REFORMS: D.E. NO. 8, JANUARY 8, 1993; D.O. NO. 14, T. 318, JANUARY 21, 1993.
D.E. Nº 39, 15 APRIL 1993; D.O. Nº 68, T. 319, APRIL 15, 1993.
CGC/jch 22/01/10
JCH 15/12/10
JCH 13/12/11
ROM 06/01/12
SV 22/11/12
RM 15/01/13
___________________________________________________________________ INDEX LEGISLATIVE
LEGISLATIVE ASSEMBLY-REPUBLIC OF EL SALVADOR
____________________________________________________________________
63
JCH 29/01/13
JQ 10/12/13
JQ 16/09/14
JQ 12/01/15
JQ 21/05/15
SP 16/12/15
___________________________________________________________________ LEGISLATIVE INDEX
