The Foreign Agents Registry of El Salvador (RAEX) has issued a notice to entities benefiting from an exemption from the 30% tax imposed on donations, transfers, goods, or services received from foreign sources, reminding them of the requirements applicable to the validity and renewal of such exemptions.
Keys from the notice
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Tax exemptions are valid for a period of one year, counted from the date of issuance of the corresponding certificate.
- Exemptions granted to specific projects are subject only to the reporting obligations established in the resolution granting the exemption.
- Principals are not required to apply for a tax exemption unless they also qualify as foreign agents.
- Exemptions granted ex officio for activities covered under Article 13 of the Regulations to the Foreign Agents Law must be renewed at least 30 calendar days before their expiration date.
- Projects or foreign agents that do not benefit from a tax exemption are not subject to a new qualification process before the RAEX, except in the case of new projects.
- Foreign agents benefiting from annual exemptions must timely submit their renewal applications before the Registry.
Entities currently benefiting from tax exemptions granted by the RAEX should verify the expiration dates of their exemption certificates and assess, well in advance, whether renewal applications need to be submitted.
Failure to renew an exemption on time could affect the continuity of the applicable tax benefits and may result in administrative or tax contingencies for the organization or project involved.
Recommendations
- Reviewing the validity period of tax exemption certificates issued by the RAEX.
- Confirming whether the exemption granted is annual in nature or linked to a specific project.
- Verifying the reporting obligations established in the applicable resolutions.
- Preparing the documentation required for renewal sufficiently in advance of the applicable deadline.
Our team is available to assist with the review of regulatory obligations before the RAEX, exemption renewal procedures, and compliance assessments under El Salvador's Foreign Agents Law.
