More Problems with VAT Refunds

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

Friday, January 15, 2016

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.

According to a statement by the Corporation of Exporters of El Salvador (Coexport) published by, "... the implementation of a new mechanism to return overcharged VAT to exporters has complicated the liquidity of companies, as they no longer give out Public Treasury Credit Notes (NCTP by their initials in Spanish), but an automatic VAT accreditation is done, but that can only be applied to imports rather than domestic purchases."

The Ministry of Finance, in response to this, said in a statement that "... they are assessing measures to address problems with VAT refunds to exporters, which were reported by employers on Tuesday."

The statement continues: "... since the mechanism was implemented in November 2015, we have received 233 applications for a total of $53.3 million; of these, the Directorate General of Internal Revenue has authorized refunds to exporters for a total of $30.1 million, of which $28 million were for accreditations for payment of VAT Importation, Retention and Perception of VAT, the remaining $2.1 million was returned to them in Treasury Credit Notes.

More on this topic

El Salvador: Government Debt with Exporters Grows

February 2017

The debt that the state has owed to export companies for four years, from unrefunded VAT, has now reached $50 million.

Silvia Cuéllar, executive director of Coexport, told that "... every year, the Ministry of Finance should have reimbursed exporters about $200 million, and the amount now overdue is $50 million."

El Salvador: Tax Refunds to Exporters

November 2015

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

The union of exporters is not entirely satisfied with this online system, stating that it has some limitations, such as only allowing "...

El Salvador: State Owes $50 million in VAT

July 2015

The export sector is pushing for the Ministry of Finance to accelerate the delivery of credit notes for tax refunds.

The Corporation of Exporters of El Salvador (Coexport) estimates that the amount owed exceeds $50 million, and is insisting that the government remove the obstacles that prevent accelerating tax refunds to exporters.

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.

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