EXEMPTION FROM IT PAYMENT – COOPERATIVES

Decree No. 4.015 of October 23, 2019, issued by the President of the Republic, was published in Official Gazette No. 41.745 of October 24, 2019 (the “Decree”). According to the Decree, the taxable net income of territorial source obtained by Cooperatives organized under the Decree with the Force of Special Law of Cooperatives will be exempt from payment of Income Tax (“IT”).

For purposes of enjoying said exemption, the Cooperatives must file the valid Certificate of Compliance, issued by the National Superintendence of Cooperatives, in order to update the Fiscal Information Registry (“RIF”).

In the cases in which the beneficiary of the exemption carries out activities that are taxed with the IT and exempt under the Decree, the common costs and deductions applicable to the earnings generated by said income will be proportionately distributed.

For 2 years following the date of entry into force of the Decree, which is the period of duration of the exemption, the losses resulting from the exempt activity may not be attributed to the income resulting from the activity taxed with the IT, in any fiscal year.

The beneficiaries of the exemption must file the annual declaration of taxed and exempt aggregate net income, as appropriate, in the terms and conditions established in the Regulations to the IT Law.

The exemption will be applied to the ongoing fiscal years at the time when the Decree enters into force.

 

The Decree entered into force upon publication in the Official Gazette.

In order to access the Decree, please click here.

Should you have any question or comment or require further information, please contact the partner in charge of your account via email.