The bill amending the General Tax Law for the implementation of several European directives related to taxation and tax cooperation was finally approved by Congress. Among the amendments, it includes a novel procedure that will allow taxpayers to correct their tax returns in a faster and more efficient way compared to the system previously in force. Here are some of the most important points of this new law.
(i) Amendments regarding limited verifications
The new regulation establishes that companies must provide their accounting on a mandatory basis, in limited verifications. This reinforces the role of the tax administration in limited verifications. This measure complements other provisions foreseen in the law, with the objective of strengthening control and transparency.
The article 136 of the General Tax Law, which addresses limited verifications, has been amended to include significant changes. Until now, this article specifically excluded commercial accounting as part of the documentation that the Tax Administration could request, while recognizing the possibility for the taxpayer to provide it voluntarily without a prior request. However, with a new amendment, this exclusion is eliminated, and it is expressly established that companies must provide their commercial accounting when requested by the Tax Administration, thus reinforcing the Tax Administration`s capacity to carry out the pertinent verifications.
(ii) Transposition of the European Union Directive on Tax Cooperation DAC 7
In the transposition of the EU directive DAC 7 (on cooperation in the exchange of tax information), several relevant aspects are introduced. These aspects include joint inspections at European level and the implementation of a new framework for the exchange of information on digital platforms, as well as rules for the exchange of information between OECD member countries.
Under these provisions, digital platforms will be required to register in a specific census and collect relevant information from their sellers. This information will include the identification of sellers, prices charged and taxes withheld. Subsequently, said information will have to be provided to the Tax Agency in January of the following year. In addition, the data collected will be exchanged with the States where the sellers or lessors of real estate have their residence.
(iii) Additional information
The law also addresses the Administration`s access to information on real beneficial ownership, which allows for greater control and transparency in the identification of the beneficial owners of entities and assets. In addition, a modification is established in relation to the professional secrecy of tax advisors. These advisors will no longer be protected by professional secrecy of tax advisors. These advisors will no longer be protected by professional secret when informing other intermediaries involved in cross-border tax planning mechanisms.