The Congress of El Salvador approved a tax amnesty program on 3 September 2024 that allows taxpayers to comply voluntarily with their outstanding tax, customs obligations, and traffic fines. The tax amnesty program only applies to penalties and interest — it does not apply to the tax owed.

According to the Special and Transitory Law that Provides Facilities for the Voluntary Compliance with Tax, Customs Obligations, and Other Fines, taxpayers with outstanding obligations related to taxes administered by the General Directorate of Internal Taxes, the General Directorate of Customs, as well as the payments under the competence of the General Directorate of Treasury, and tax debts determined in accordance with Section 74-A of the Tax Code can apply for the tax amnesty. Outstanding obligations related to municipal taxes are excluded from the amnesty program.

Additionally, individuals with fines related to the Land Transport, Traffic, and Road Safety Law, can participate in the program seeking exemption from surcharges and interests applicable to outstanding fines.

Similarly, the amnesty would allow for the settlement of pending processes before the General Directorate of Internal Taxes, General Directorate of Customs, in the Administrative Litigation Jurisdiction, Constitutional Protection, at the office of the Attorney General of the Republic, or before the Tribunal of Appeals of Internal Taxes and Customs.

Obligations and processes applicable to the tax amnesty program must have had a due date of 31 July 2024 or earlier.

The General Directorate of Treasury will grant a payment plan of up to a maximum of nine monthly installments, considering the amount owed, through the issuance of the Installment Payment Resolution. A first installment of 10% of the debt must be paid on the day the Installment Payment Resolution is issued and notified; the remaining eight installments must be paid monthly and successively.

Additionally, the program allows that taxpayers who benefited from previous amnesty programs, but for various reasons did not pay their debt within the established deadline of that program, may enjoy the benefits established in the new tax amnesty program, unless the fines previously assessed are liquid, firm and enforceable. In this case, the fines are not waived but may be paid in installments.

Penalties that may be subject to the tax amnesty program would be those imposed under Tax Code Sections 238 letters (a) to (d), 246, 247, 252, 253 and 254. Penalties not considered within the mentioned Sections will only benefit from the Installment Payment Resolution for up to nine months, and a first installment of 20% of the fine must be paid on the day the resolution is issued and notified.

Next steps

The Law has yet to be enacted by the President of the Republic and subsequently published in the Official Gazette, at which time it will come into force and begin the count of the 90 calendar days during which the tax amnesty will be in