BUSINESS ASSETS TAX

The Business Assets Tax (IAE for its initials in Spanish) was abolished through a law published on the Official Gazette 38.002 on August 17, 2004 , which took effect on September 1 st , 2004 .

Upon the abolition of the law, there where some doubts with respect to the timing for filing the tax returns for the taxable period in which the law was in force finishing August 31 st , 2004. These doubts were solved by the National Integrated Service of Tax Administration (SENIAT, for its initials in Spanish), which issued an opinion on September 14, 2004, stating that “…the Business Assets Tax is in its essence a tax integrated to the Income Tax, and, therefore, the determination of the tax obligation of the Business Assets Tax is linked to and conditioned by the application of the Income Tax (…) In consequence, the tax payers will only be obliged to file their Business Assets Tax returns and pay the corresponding taxes during the three months following the closing of the respective taxable year for Income Tax purposes.”

VAT

Beginning September 1 st , 2004 , the VAT rate was diminished from 16% to 15%. The amendment to the Value Added Tax Law was published in the Official Gazette Nº 37.999 on August 11 th , 2004 .

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