Sole tax on the outstanding balance of retained profits
- The taxpayers subject to the Corporate Tax that as of the end of the 2019 business year maintain a balance of retained taxable profits generated before January 1st, 2017, can choose to pay a sole and substitute tax at a fixed rate of 30%, which will replace the corresponding final taxes (“Substitute Tax”).
- With the declaration and payment of the Substitute Tax, the taxation with income tax of the aforementioned profits is understood as fully complied with.
- The Substitute Tax has a preference for purposes of imputation with respect to the imputation rules established by the ITL. Thus, the profits subject to such special tax may be withdrawn at any time without triggering any further tax payments, regardless of the profits retained in the company.
- The Corporate Tax paid over the relevant retained taxable profits is fully creditable against the Substitute Tax.
Total remission of interest and fines after withdrawal of pending legal proceedings
It is established that, for a single time within a period of 2 years from the publication of Law No. 21,210, taxpayers who have legal proceedings pending could opt to terminate those proceedings by recognizing the existing tax debt. In such cases, a total forgiveness of interest and fines is granted by the IRS.
This option may be exercised until 24 February 2022.