January 10, 2023, 9:00 AM
January 10, 2023, 9:00 AM
On December 28, 2022, Supreme Decree No. 4850 was promulgated, which corresponds to the regulation of Law No. 1448 published in July of last year, which incorporated subsections g) and h) into Article 19. of Law No. 843 by which it was provided that the exercise of the profession or trades freely or independently will be within the scope of the RC-VAT.
In this regard, it should be considered that this modification to Law No. 843 puts taxpayers who exercise their profession or trade freely or independently on equal terms, so that they are covered by the RC-VAT as any person dependent on a labor source and not by the Corporate Income Tax (IUE) as was the case before the modification.
In this context, in order to clearly identify the modifications, the following is a summary of the main changes:
|
Old application of the aforementioned taxpayers |
Application from Law No. 1448 and Supreme Decree No. 4850 |
|
Types of taxpayers: taxpayers who exercise their profession or trade independently |
Types of taxpayers: taxpayers who exercise their profession or trade independently |
|
IUE tax |
RC-VAT tax |
|
25% rate |
Rate 13% |
|
Settlement annually |
Settlement on a quarterly basis |
|
Valid until December 31, 2022 |
Valid from January 1, 2023 |
The new form of declaration as of January 2023, of these taxpayers is the following:
|
Income from the exercise of the profession or trades freely or independently. |
|
|
less |
VAT Tax Debit |
|
less |
Social security contributions actually paid |
|
Total income subject to RC-VAT for the quarterly period |
|
|
RC-VAT corresponding to the rate of 13% |
On the other hand, it is important to state that the aforementioned Supreme Decree extends the right to withhold VAT RC to Sole Proprietorships when they pay natural persons and undivided successions for the concepts of rent, fees of directors and trustees, regular income not subject to the IUE, income from the exercise of the profession or trades freely or independently and the fees, remuneration or income from payments, whatever their denomination, of persons not domiciled in the Plurinational State Bolivia, from the work carried out in national territory. Determining that the income of athletes and artists, not domiciled, for work in contest activities, competition or international tournaments are not reached by this tax.
Finally, it should be considered that the Sole Transitory Provision of the aforementioned decree in its first paragraph provides that natural persons who exercise professions or trades freely or independently reached by the Tax on the Profits of the Companies, will carry out the closing of the fiscal management 2022 to December 31, 2022, having to declare and pay this tax until January 31, 2023, an aspect that must be considered by the aforementioned subjects in order for them to comply with their tax obligations in accordance with the Law.
