Honduras: New tax service replaces prior tax department

Honduras: New tax service replaces prior tax department

Honduras has replaced its tax department with a new decentralized tax service agency.

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Executive Decree PCM-083-2015 (published in the official gazette (10 February 2016)) replaced the Dirección Ejecutiva de Ingresos (DEI) with the Servicio de Administración de Rentas (SAR)—a decentralized entity attached to the Honduran presidency. Accordingly, those functions relating to tax obligations or filing requirements previously submitted to and processed by the DEI will now be the responsibility of a commissioner of the SAR, who will be appointed by the president of Honduras. The commissioner will oversee tax-related requests and functions, and the processing and execution of tax files until a final determination is reached.

Concerning customs matters, the Honduran government also removed the Dirección Adjunta de Rentas Aduaneras (DARA)—the Honduran customs agency that was formerly part of the DEI—and ascribed its authority to the Secretary of State within the Ministry of Finance.

Overview of SAR’s authority

As part of an initiative designed to provide for the effective collection of income required to meet the government’s financial obligations (in particular, those related to social investment in health, education, security, housing and infrastructure as well as for the modernization of the state), the Honduran government created the SAR as a decentralized entity attached to the presidency of Honduras and having administrative and national security autonomy, and charged with responsibility for tax administration. The mandate of the SAR requires it to:

  • Comply with and enforce the provisions of the Honduran constitution, international agreements on tax matters, the tax laws and other rules relating to fiscal matters
  • Supervise the fulfillment of tax obligations, and to combat tax evasion and avoidance
  • Develop plans and programs of administrative management in accordance with guidelines set by economic policy and the annual revenue collection targets
  • Promote a positive “tax culture” through assistance, guidance, and fiscal education programs for taxpayers
  • Establish and maintain relationships with institutions, national and international organizations, and cooperation agencies related to tax administration, and enter into contracts and agreements related to the development of its functions
  • Manage the tax system, exercising all authority as established in the tax code and other related laws and regulations
  • Manage the tax and liens collection as established in the tax laws
  • Collect tax debts
  • Require public or private third parties to maintain and provide accounting and financial information, stock registration and any information necessary for compliance with its investigative, control and oversight functions as set forth in the tax code and other related laws and regulations
  • Appoint collection or withholding agents
  • Impose sanctions as provided in the tax code or laws, including the temporary closure of sites when the taxpayer fails to comply with certain tax and reporting obligations
  • Approve agreements of particular and general nature for the efficient application of tax legislation
  • Resolve the procedures initiated ex officio or at the request of a party
  • Exercise of any other authority to be established as well as those that were in the laws and regulations attributed to the now-replaced DEI

 

For more information, contact a tax professional with KPMG’s Latin America Markets Tax practice or with the KPMG member firm in Honduras:

Devon M. Bodoh | +1 (202) 533-5681 | dbodoh@kpmg.com

Alfonso A-Pallete | +1 (305) 913 2789 | apallette@kpmg.com

Ruben Alonzo | +1 504 223 85 605 | realonzo@kpmg.com

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