Nicaragua: Protests Over Self Transfer of VAT

Employers indicate that for some companies, the inadequate implementation of an administrative ruling of the Department of Revenue increases costs by 15%.

Thursday, March 14, 2013

"Where the provision of services in general and the use or enjoyment of goods is provided by natural or legal persons or an entity, either resident or nonresident, which are not responsible for collecting VAT (IVA in Spanish), the payer of the service shall make a self transfer of the VAT incurred, which constitutes a tax credit under accreditation rules. " reports that "... the economist Rene Vallecillo explained that there has been a distortion in the implementation of the Law on Tax Coalition. 'The law states that the entity that should do the self transfer is the company that is registered as responsible for VAT collections, who is going to charge the VAT to themselves, who is also the entity that charges VAT on the provision of services or sale of goods .And what (the company) pays (in taxes) in one month is credited in the next, so there is a neutral effect. That's what the law says and the regulation ', but it is not being applied in this way. "

"... The view of the DGI consists in the fact that self transfer must also be done by those who sell exempt goods and services, "which they can not credit in the next month, turning the VAT into a cost or expense, increasing the total sales costs by a 15% .

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