- November 8, 2019
- Posted by: saenicsa
- Category: Tax
As of the 1st of March of 2019, important tax reforms were put into effect. The legislative bill that contained these changes was Ley No. 987 Ley de Reformas y Adiciones a la Ley N°. 822, Ley de Concertación Tributaria, or Law of Reforms and Additions to Law 822, Tax Concertation Law, in English.
These tax reforms and additions changed significantly various aspects of tax law and procedure.
One of the more significant changes that were implemented was in relation to the significant reduction in time to declare the year-end tax declaration for the year 2020.
How were annual year-end taxes declared in years 2018 and previous?
Prior to the reforms and additions to current tax law and procedure the year-end tax declaration had to be declared and any tax liabilities wherein paid by the 31st of March of every calendar year. This in effect left a period of a full 3 months so as to finalize, reconcile, review and close a company’s accounting. This additional period of time was important, because even though the deadline was for the 31st of March for the year-end taxes, regular monthly taxes still have to be prepared and declared which had to be done by the 5th and 15th of each month, respectively.
So the initial quarter of year usually was a fairly stressful time wherein the deadline for the most important tax declaration would be looming and at the same time monthly responsibilities still needed to be met.
Nonetheless, this meant that after the 15th of each month until the end of each month, focus would be quickly shifted to finalizing details for the year-end close and liquidation of annual taxes.
How did tax reforms and additions affected 2019 year-end taxes?
When Ley No. 987 Ley de Reformas y Adiciones a la Ley N°. 822, Ley de Concertación Tributaria, or Law of Reforms and Additions to Law 822, Tax Concertation Law, in English, was approved on the 28th of February of 2019 and entered into effect as of the 1st of March of 2019 an important change will greatly affect this and future year-end annual tax declarations.
In the reformed article 69 of law 987, we find the following statement:Obligation to declare and pay. Submit to the Tax Administration, at the latest on the last calendar day of the second month following the end of the fiscal period, the declaration of income earned or received during the fiscal period and to simultaneously pay the self-assessed tax debt, in the place and form that is established in the Regulations of this Law. This obligation is enforceable even if you are exempt from paying this tax or there is no tax to pay, as a result of negative income, with the exception of taxpayers who are subject to simplified regimes”, so beginning with year 2019, year-end taxes will need to be declared by the 28th of February of 2020, no exceptions.
What can taxpayers do in light of such a considerable reduction in time to declare year-end taxes?
Unfortunately, there isn’t much that can be done other than adapting to the reduced time limit. Therefore, as an accounting and tax firm in Nicaragua, we at SAENICSA would like to encourage you to keep in mind this reduction in time and if possible even before this year ends make sure that all pending information, documents, transaction or what may have you gets taken care of promptly.
This way all pertinent and necessary deductions and credits can be maximized and used to your benefit.
We hope that this article has helped you and if it has please share, comment and rate it, we love hearing from you.
If you are a business owner feel free to contact us HERE with any questions that you may have with relation to year-end taxes and any other changes that Ley No. 987 Ley de Reformas y Adiciones a la Ley N°. 822, Ley de Concertación Tributaria may have also brought and may affect you or your business with.