All employees who earn more than 35,000 pesos per month pay Income Tax (ISR) to the State through the withholding of a percentage of their salary that, by law, corresponds to the employer. This amount can be used in the future to offset other tax commitments, only if you have a clear accounting.
The ISR is the tax levied on all income, income, profit or benefit, obtained by individuals, companies and undivided estates, in a given fiscal period, that is, if you work for a company and earn more than 34,700 pesos per month your employer will be withholding a monthly amount for ISR.
The money withheld from the employee’s salary goes directly to the General Directorate of Internal Taxes (DGII) for ISR, it is a cumulative amount that can be used by the taxpayer once they become unemployed, change jobs or are retired, to settle another tax payment or they can receive the amount in check.
T datasocial security treasury (TSS) indicate that, at the end of March 2022, only 23% of the country’s employees meet the salary range for deduction of income taxes. Of 2,188,285 million workers, 497,551 earn more than 30,000 pesos per month.
For employed people, their salary is their income and, therefore, they are supposed to pay taxes, as long as they exceed the tax exemption, which is monthly equivalent to a salary greater than 37,000 pesos, explains Rosa Pascual, an expert in tax matters.
The tax specialist told Free Journal that companies act as intermediaries to channel the payment of this tax. “That’s why you see that in the monthly payroll there are some tax deductions when the salary is greater than 37,000 pesos,” he said.
He argued that in the case of professionals or independent workers and employees who receive another economic income for an activity in addition to their work, they must register as taxpayers in the DGII and report that extra money in order to comply with what the law establishes.
Failing that, it recommends that employees with additional economic activity inform their company about the extra value they receive so that they can make the withholdings based on the total amount of their income.
It clarifies that the only people exempt from paying this type of tax are those who receive a single salary and this is because their tax is processed by the employer, through the deduction of the percentage that they must pay.
Reimbursement of balance in favor
In the help community section of the DGII There are numerous topics about confusion regarding the refund of balance in favor by ISR and these doubts are due, in part, to the erroneous way of calculating compliance with the payment of the tax.
Free Journal requested the DGII statistics on refund requests and according to the figures, in five years, from 2017 to 2021, the institution received 45,741 credit balance refund requests, of which 30,085 have been approved and the money refunded and 15,656 were denied.
For Cibeles Jiménez, risk management specialist, in the country “there is a lot of ignorance in this regard, especially when (people) have changed employers, when they have exhausted a period of unemployment or, even, in cases where it applies to compensate expenses education through the ISR”.
When discussing the subject with Free Journal, Jiménez clarifies that the reimbursement mechanisms are usually by return check at the request of the taxpayer or by compensation on future balances, the latter being the most used. It should be noted that the taxpayer has a term to claim his refund of three years from the date of payment or the determination of the credit in his favor, that is, from being separated from the company or from when he changes worked.
It highlights that, in the case of direct reimbursement, taxpayers requesting reimbursement must have organized accounting, since the balance is required to be audited by the DGIIotherwise the mechanism will be compensation.
Reports that many withholding agents do not adequately inform their employees of this benefit, thus losing the latter the opportunity to generate significant savings or to use it to offset another tax liability.
Jiménez agrees with the expert on tax issues that, by their nature, companies become agents withholding their employees’ salaries or the services paid to their physical suppliers, the total or partial amount, as applicable, of the ISR and the report and enter the DGII.
It adds that the withholding agents are the only ones required to pay the amount withheld or received and are responsible to the taxpayer for the withholdings made, which indicates that within their responsibilities they must keep the taxpayer informed.
The DGII explains that the process to request the accumulated value must be carried out within three years of leaving the company and both the employee and the employer can make the request, through a form that must be duly stamped and signed by the beneficiary who, in this case, is the unemployed (according to their status outside the company).
After the collaborator is dismissed from the company, he must request a certification of the ISR payment that his employer made to the DGII, then you must fill out the reimbursement request form from the collecting entity, either in person or virtually. Both documents must be deposited accompanied by a copy of the identity card.
Law 227-06 in its article 26 establishes that the collecting institution has a period of two months to respond to the reimbursement request, in case of not responding on time, the request will be processed as positive to analyze it and decide on it.
In the event that the natural person is not satisfied with the calculations of the tax administration, the Tax Code establishes that they have the right to a repetition or reimbursement of what was previously requested so that the values withheld through the company for the which one worked
“The improper payment or in excess of taxes, surcharges, interest or pecuniary sanctions, will give rise to the administrative procedure of reimbursement before the tax administration. In the event that the taxpayer does not feel satisfied with his claims, he may initiate the action of repetition or reimbursement of the same, “says the Code in its article number 68.