Micro and small companies: deadline for paying income tax extended

By means of Decree 612 of June 4, 2021, the deadline for legal entities that qualify as micro and small companies to cancel the balance payable of their income tax return for the taxable year 2020 was extended again.

The first extension was given with Decree 374 of 2021.

On June 4, 2021, the Ministry of Finance issued Decree 612 to extend for the second time the deadlines in which legal entities (of the ordinary or special regime, but not including those of the simple regime) that qualify as micro and small companies, in the terms of articles 2.2.2.1.13.2.2.2. and 2.2.2.1.13.2.3. of DUR 1074 of May 2015 of the Ministry of Commerce, Industry and Tourism, may cancel the balance payable resulting from their income tax return for the taxable year 2020.

The first extension had been given with Decree 374 of April 9, 2021, through which it had been provided that the balance payable of the 2020 taxable year return could be cancelled in up to two equal installments; the first would be due between June 9 and June 23, 2021 and the second between November 9 and November 23, 2021.

“the Government considered it necessary to give a longer term, therefore, it has now been established that the balance payable of the income tax return for the taxable year 2020”

However, due to the economic difficulties generated with the road blockades and other public order disturbances produced with the national strike started on April 28, 2021, the Government considered necessary to give a longer term, therefore, it has now been established that the balance payable of the income tax return for the taxable year 2020 may be paid in a single installment within the following maturities:

Timely payment is important for income tax returns year that aspire to obtain the audit benefit.

In connection with the above, and if any legal entity that qualifies as a micro and small business decides to avail itself of the provisions of Decree 612 of June 4, 2021 by paying its income tax for taxable year 2020 as late as November 2021, it is important to note that those that complied with timely filing their income tax return for taxable year 2020 (between April and May 2021), but did so in compliance with all the requirements established in Article 689-2 of the ET (among them that their net income tax for taxable year 2020 will be at least 20% higher compared to taxable year 2019), may obtain the audit benefit mentioned in said rule only if they also make sure to timely pay the balance payable resulting from their taxable year 2020 return.

In this regard, the version of the first two paragraphs of article 689-2 of the ET, after being amended with article 123 of Law 2010 of 2019, states:

Article 689-2. Benefit of the audit. For the taxable periods 2020 and 2021 the private liquidation of the taxpayers of income tax and complementary taxes that increase their net income tax by at least a minimum percentage of thirty percent (30%), in relation to the net income tax of the immediately preceding year, shall become final if within the six (6) months following the date of its filing, no notice to correct or special requirement or special summons or provisional liquidation has been notified, provided that the return is duly filed in due time and the payment is made within the terms established by the National Government for such purpose.

If the increase of the net income tax is at least a minimum percentage of twenty percent (20%) in relation to the net income tax of the immediately preceding year, the income tax return shall become final if within the twelve (12) months following the date of its filing no notice to correct or special requirement or special summons or provisional liquidation has been served, provided that the return is duly filed in a timely manner and the payment is made within the terms established by the National Government for such purpose.

As can be seen, the 6 or 12 months of the finality period starts to run from the date of timely “filing” of the return. However, one of the many requirements that must be met in order to obtain such finality is to make all payments within the deadlines set by the national Government.

Source: Actualize