In Honduras, rebates and discounts applied to sales should be detailed on the invoice, a change with which the business sector would disagree if the government decides to collect taxes on the discounted amount.
On March 1, the changes to the invoices, which were imposed by Agreement 817-2018, came into effect. Among them, it is important to note that the fields for discounts and rebates must be included in the format of the document.
On average, companies in the region pay 45.8% tax on profits, while companies in OECD countries pay 41%.
From the study Evolution of the fiscal situation in Central America, by the Federation of Chambers of Commerce of the Central American Isthmus (FECAMCO):
FECAMCO has carried out a study with the objective of showing the fiscal situation in Central American countries and raising awareness in governments about the efficient use of taxes that are collected from the payment of citizens to guarantee solvency of the states.
The Executive Branch has returned to Congress the decree amending the basis for the first tranche of Income Tax considering that it compromises public finances.
From a statement issued by the President of Honduras:
Tegucigalpa, March 8. President Juan Orlando Hernández vetoed the decree amending Article 22 of the Law on Income Tax (ISR), which proposes exempting from the tax workers earning less than 15,087 lempiras ($700).
The Supreme Court has not ruled in favor of the union of private companies, which sought to suspend the collection of income taxes of 1.5%.
Businessmen from different sectors showed their discontent after the Supreme Court rejected the appeal by the Honduran Council of Private Enterprise (COHEP) and announced that the collection of the (ISR) tax will remain in place.
The private sector has denounced that on top of the negative effect of the new tax of 1.5%, are delays in the payment of $19 million in tax refunds.
Added to this is the cost for companies of undergoing tax audits required by the Executive Directorate of Revenue (DEI) to justify their financial position and request an adjustment in the payment of 1.5% of income tax to be paid by those generating sales of over $456 thousand.
The Constitutional Court has rejected the constitutional challenge presented by the business sector and left in place the collection of 1.5% income tax.
The Supreme Court has confirmed the income tax of 1.5%, which applies to companies reporting net sales of over $456 000, leaving exempt from this charge those reporting lesser incomes and those with less than two years of being established.
Congress has passed the elimination of the provision that payments be made by natural and legal persons when they are shareholders in corporate groups.
According to the liberal congresswoman Gabriela Núñez "... The law is properly applied to individuals who receive dividends as when they receive a profit they must pay their taxes; however, when it relates to a company it becomes a double taxation because the company, when it receives dividends, pays the tax and then when it distributes the dividends among its own shareholders, it once again incurs a tax liability of 10%, which is considered prohibited in the Tax Code. "
The union is demanding from the government the same tax breaks that are being prepared for the tourism industry.
The construction sector contributes about 6% to the country's Gross Domestic Product (GDP), and it is for this reason that companies in this guild are asking for a package of tax breaks the same as will be given the tourism sector, whose contribution to the economy amounts to just 3% of GDP.
The private sector has filed a constitutional complaint against Article 22-A of the Tax Act on income tax arguing that it distorts fundamental tax principles.
From a statement issued by the Honduran Council of Private Enterprise:
As entrepreneurs we have supported the planning processes of public finances to improve tax revenues and the controlling of public expenditure, which allow for the signing an agreement with the International Monetary Fund (IMF). Tax burdens should be clear and simple, non-discriminatory, fair and universal, as established by our constitutional system.
The asymmetry of investment flows makes the application of the concept of world income inevitably generates more revenue to the states of powerful economies than those of small ones.
In his opinion piece in Elfinancierocr.com, Manrique Blen points to the difficulties that countries with small economies face when they sign double taxation treaties, as, depending on the characteristics of the signed agreements, they can stop receiving tax revenues that they could have received had they not joined the treaty.
An announcement has been made that greater control will be exerted in verifying payments of income taxes by large taxpayers.
Due to the decline in revenue from income tax and irregularities in the internal collection agency, the Directorate of Revenue has announced it will increase controls on businesses.
In an article on Latribuna.hn Miriam Guzman, head of the institution, "emphasized that the auditing by the DEI, will not decrease, while at the same time business owners are being invited to "avoid having to be objects in criminal prosecutions led by the relevant authorities."
A law has been approved that repeals articles 2 and 3 of Act 120 of 2013 and restores the effect of Article 694 of the Tax Code relating to the principle of taxation of the income.
From a statement by the National Assembly:
With 45 votes in favor, 2 against and 0 abstentions, the plenary of the National Assembly approved on its third reading Bill 694, which repeals Articles 2 and 3 of Act 120 of 2013 and restores the effect of Article 694 of the Tax Code regarding the principle of taxation of income.
Employers indicate that investments are being delayed while they are awaiting response to requests for exemptions made to the Commission of the Executive.
According to representatives from the Honduran Council of Private Enterprise (Cohep), about 700 companies records have been retained pending a special commission to determine whether or not to provide tax breaks to those who request it.
The private sector in Honduras is protesting that the tax amnesty will not benefit small entrepreneurs .
In a letter sent by Mario Bustillo, director of the Chamber of Commerce and Industry of Tegucigalpa (CCIT) to the Finance Secretary, Wilfredo Cerrato, the official explained that persons and corporations whose declared gross income was lower than $1.57 million were excluded from the amnesty.
A law decree under discussion in Congress seeks to grant a tax amnesty on penalties and interest to taxpayers with outstanding accounts with the State.
The draft submitted by the secretary of the CN, Rigoberto Chang Castillo, would grant amnesty to tax charges such as taxes and contributions for improvements, fees, surcharges, fines and surcharges, which must be paid no later than July 31 of the current year .