El Salvador issued new tax reforms

The Government of El Salvador, through its Treasury Ministry, recently presented a series of new tax reforms which were approved by Congress by the end of 2004. These reforms comprise the following legal bodies: Tributary Code, Income Tax Law, Transfer Property Tax and Rendering of Services Tax Law (VAT), Law of the Organization and Function of the Court of Appeals for Internal Tax, Customs Laws (Organization Law of Customs, Customs Reduction Law and Law for Customs Sanctions), Criminal Law, Criminal Procedural Law, Banking Law and Law for Finance Intermediaries.

According to government officials, each of the reforms was created with the intention of reducing the existing legal gap within the fiscal norms, which will enable them to reach its primary objective, the increase in revenue from taxes and the reduction of the existing high rate of tax evasion. It is important to note that the Tributary Code was the body of law which had major changes, as the general norm to which other imposing laws must refer. In general, these reforms include a series of formal duties for the taxpayers, attaining to obtain useful information for the Fiscal Administration in the supervision and control in the application and enforcement of each fiscal norm.

F. A. Arias & Muñoz, El Salvador, aware and at the same time prepared for these upcoming changes, offers to its clients an updated legal advice. An extensive analysis of these reforms has been made in order to counsel clients correctly and more efficiently in the application of laws in the different areas of business and commerce.