{"id":45441,"date":"2026-05-27T06:04:02","date_gmt":"2026-05-27T12:04:02","guid":{"rendered":"https:\/\/garciabodan.com\/?p=45441"},"modified":"2026-05-27T08:24:06","modified_gmt":"2026-05-27T14:24:06","slug":"new-authentic-interpretation-article-28-el-salvadors-income-tax-law","status":"publish","type":"post","link":"https:\/\/garciabodan.com\/en\/new-authentic-interpretation-article-28-el-salvadors-income-tax-law\/","title":{"rendered":"New authentic interpretation of article 28 of El Salvador\u2019s income tax law"},"content":{"rendered":"<p>The new authentic interpretation of Article 28 of <strong>El Salvador\u2019s Income Tax Law (ISR)<\/strong> was published in the Official Gazette on May 11, 2026, clarifying the scope of the deductibility of costs and expenses within the Salvadoran tax system. This measure aims to eliminate previous interpretative gaps and unify the application criteria for both taxpayers and the Ministry of Finance.<\/p>\r\n<p>With this provision, Legislative Decree No. 345 of 2019 is repealed, incorporating the new criteria directly into the body of the law.<\/p>\r\n<p>&nbsp;<\/p>\r\n<h2><span style=\"color: #2263aa;\">Definition of deductible costs and expenses<\/span><\/h2>\r\n<p>Under the new legal framework, costs and expenses necessary for the generation of income and the preservation of its source are <strong>defined as all purchase costs and expenditures inherent to the ordinary course of business. <\/strong><\/p>\r\n<p>The regulation establishes the following deductibility conditions:<\/p>\r\n<ul>\r\n\t<li><strong>Scope:<\/strong> Includes shrinkage, losses, or expenses incurred to preserve the income-generating source, regardless of the industry sector (manufacturing, commerce, or services).<\/li>\r\n\t<li><strong>Specific sectors:<\/strong> The regulation expressly confirms its applicability to sectors involving perishable goods, consumer products, textiles, the electricity industry, and hydrocarbons at all stages of operation.<\/li>\r\n\t<li><strong>Tax independence:<\/strong> The admissibility of a cost or expense does not depend on whether the fiscal year results in a Calculated Tax when determining Taxable Income.<\/li>\r\n<\/ul>\r\n<p>&nbsp;<\/p>\r\n<h2><span style=\"color: #2263aa;\">Compliance requirements and criteria<\/span><\/h2>\r\n<p>For claimed amounts to be recognized as deductible by the competent authorities, taxpayers must ensure compliance with strict technical requirements:<\/p>\r\n<ul>\r\n\t<li><strong>Accounting support:<\/strong> Amounts must be properly documented and recorded in the accounting books or corresponding special <strong>records.<\/strong><\/li>\r\n\t<li><strong>Nature of the expense:<\/strong> The expenditure must be real, reasonable, and directly inherent to the economic activity carried out.<\/li>\r\n\t<li><strong>Exclusivity:<\/strong> The funds must have been used exclusively for business purposes and income generation.<\/li>\r\n<\/ul>\r\n<p>&nbsp;<\/p>\r\n<h2><span style=\"color: #2263aa;\">Powers of the tax administration<\/span><\/h2>\r\n<p>The decree authorizes the <strong>General Directorate of Internal Taxes<\/strong> to issue the necessary administrative instruments, such as instructions, circulars, or guidelines, to facilitate responses to consultations and ensure the proper application of this interpretation.<\/p>","protected":false},"excerpt":{"rendered":"<p>The new authentic interpretation of Article 28 of El Salvador\u2019s&#8230;<\/p>\n","protected":false},"author":3,"featured_media":45456,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[229],"tags":[190,142,283],"class_list":["post-45441","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-el-salvador-en","tag-law","tag-tax"],"acf":[],"_links":{"self":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/45441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/comments?post=45441"}],"version-history":[{"count":4,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/45441\/revisions"}],"predecessor-version":[{"id":45462,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/45441\/revisions\/45462"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/media\/45456"}],"wp:attachment":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/media?parent=45441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/categories?post=45441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/tags?post=45441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}