Changes in Obligations to submit Tax Opinion

The Micro and Small Business, are of utmost importance for the country's economy, not only for the contributions to the production and distribution of goods and services, but also for the great potential for job creation that represents an excellent means to promote development economic, social and a better distribution of wealth, positioning itself as one of the main sources of growth, investment and self-employment for our country.

According to data from the National Commission of Micro and Small Enterprises, the MSE segment constitutes more than 90% of the companies in El Salvador, with an approximate contribution to the Gross Domestic Product (GDP) of 35% and a generation of jobs for more than 1 million people.

In view of the foregoing, the Finance and Special Budget Committee considered that the Micro and Small Companies are at a great disadvantage to be able to face the changes in the markets, which result in stagnation or bankruptcy. Therefore, with the intention of encouraging and increasing its promotion and support to increase its competitiveness and face the competition of a globalized world, a reform is decreed to Art. 131 literal b) of the Tax Code which dictates:

"b) Having obtained total income in the previous year in excess of 4,817 minimum wages in the Trade and Services Sector, calculated in United States of America dollars."

This reform that becomes effective, from April 18, 2019, resulting in the requirements to have the obligation to submit a Fiscal Opinion are as follows as of the date of publication of this article:

• Having possessed a total asset on the thirty-first of December of the year immediately preceding the one in which it was issued, in excess of US $ 1,142,857.14.
• Having obtained a total of revenues in the previous year in excess of US $ 1,464,368.
• Legal persons resulting from the merger or transformation of companies must comply with this obligation for the year in which these acts occur and for the following one.
• Companies in liquidation will have this obligation for each of the tax periods or exercises, as the case may be, from the date of inscription of the dissolution until that in which the liquidation procedures are completed and prior to their registration.