El Salvador: Tax Refunds to Exporters

It has been announced that as of November 17th enterprises must carry out a mandatory exporter VAT self-assessment using a web platform.

Friday, November 6, 2015

The union of exporters is not entirely satisfied with this online system, stating that it has some limitations, such as only allowing "... cross matching withholding of exporter VAT with importer VAT to recover the money. That is to say, if the Treasury has withheld $500 from a company for its exports, but the company owes $500 in VAT on imports, the balance is zero. "

Elsalvador.com reports that "... Exporters felt that the process would benefit more companies if they were allowed to cross match the exporter VAT with more taxes, not just import tax. They object to the fact that companies who do not import, or do so with few products, can not keep enough in reserve. "

Coexport´s executive director, Silvia Cuellar added that this measure is a first step towards correcting delays in VAT refunds. Although the online application method is limited, she urged people to take advantage of the tool and for all cases to be reviewed in order to make the self assessment process quicker. Cuellar mentioned that there is willingness on the part of the departments of tax and customs for cross matching of more taxes to eventually be done, but said that there is still no date for the respective mechanisms to be implemented.

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More on this topic

More Problems with VAT Refunds

January 2016

Salvadoran exporters claim that the system used by the Ministry of Finance from November to return VAT has put a strain on companies liquidity.

The new mechanism to refund VAT to exporters (which has been in force since November), has caused new problems between the sector and the tax authority of El Salvador.

Nine Months to Refund VAT to Exporters  

March 2015

In El Salvador the export sector claims that delays of up to nine months are being reported on tax refunds due from the Treasury, which should take no more than 30 days.

Seven months ago the Exporters Corporation of El Salvador (Coexport) submitted to the Ministry of Finance a proposal for self-assessment of Value Added Tax (VAT) with the aim of reducing the time it takes to receive tax refunds.

SAT's Multi Million Dollar Debt to Guatemalan Exporters

October 2013

The Tax Authority (SAT) owes to domestic exporters about $313 million in tax credit refunds.

This was explained by the superintendent Carlos Muñoz, adding that "... this amount represents the backlog in tax credit refunds of Value Added Tax (VAT) to Exporters and there are cases which have been awaiting payment since 2011," noted an article in PrensaLibre.com.

Self Assesment for VAT in El Salvador

March 2013

A proposal has been made for a self-assessment system which aims for the government to quickly provide refunds of the 13% VAT to exporters.

Elsalvador.com reports that "in light of the government's failure to repay on time the 13% Value Added Tax (VAT) to export companies, the same companies, unionized under the Corporation of Exporters of El Salvador (Coexport ), have decided to create their own proposal in order to quickly get back the funds which belong to them. "

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