Exoneration of Cooperative Associations from Income Tax Payment

EXONERATION OF COOPERATIVE ASSOCIATIONS FROM INCOME TAX PAYMENT

On August 12, 2024, the National Executive Branch issued Decree No. 4,976 (Official Gazette No. 42,939 of August 12, 2024).

Through the Decree, the National Executive Power exonerated Cooperative Associations from paying income tax on the net taxable income they obtained from territorial sources (Article 1).

Determination of exonerated income. The current Income Tax regulations will be used to determine the income subject to exoneration according to the Decree (Article 3).

Enjoyment of the benefit. Those interested in using this tax benefit must update their Tax Registration Certificate by providing their Certificate of Compliance from the National Cooperatives Superintendence (Article 3).

Likewise, Cooperative Associations must also submit their annual net income return in compliance with the Income Tax Law (Article 5).

Failure to comply with any of these requirements, the Income Tax Law, its accompanying Rules and Regulations, or any other applicable norms will result in the loss of the benefit (Article 7).

Duration of the benefit and entry into force. The exoneration will be in effect for one (1) year, starting on August 12, 2024, upon publication in the Official Gazette (Article 8).