Last Monday, September 20, the Government submitted to the Chamber of Representatives a bill that contemplates a series of amendments to the social security regulations, with the purpose of expanding and strengthening the Solidarity Pillar. Likewise, and with the purpose of financing such reform, the bill contemplates the reduction and elimination of certain benefits and tax exemptions, among them:
1. Single withholding tax, to be declared annually, and at a 5% rate on the higher value obtained in the sale in the stock exchange of certain instruments with stock exchange presence, which are carried out as from the sixth month after the publication of the law in the Official Gazette. Notwithstanding the above, the tax treatment of income not constituting income is maintained for the higher value obtained in the disposals that comply with such characteristics, but which are carried out by institutional investors.
2. The elimination of the special VAT credit for construction companies with respect to construction and sales contracts entered into as of January 1, 2024, and the transitory reduction of the amount to be deducted from PPM by such companies with respect to such contracts entered into as of January 1, 2022.
3. Introduces requirements for accessing the tax benefits provided for affordable housing under DFL2, among them, that, as of January 1, 2022, the benefited owners must be individuals, who may take advantage of such benefits for a maximum of 2 homes per person, regardless of their date of acquisition.
4. VAT will be levied on services rendered in general, except for express exemptions, establishing the general rule whereby all services rendered as from January 1, 2022 will be subject to VAT, except for those services that are expressly exempted..
5. To impose the Inheritance and Donations Tax on the amounts obtained under life insurance contracts entered into as from the publication of the law in the Official Gazette, which will cease to be considered as income not constituting income, and will be taxed with the referred tax.
6. Taxpayers’ duty to inform the SII (tax revenue) of their income not constituting income, through the incorporation of an express rule that empowers the SII (tax revenue) to request such information from taxpayers.
7. Exclusion from payment of property tax surcharge to the Treasury and Municipalities.