On December 28, 2020, the government passed Law No. 1357, called the Tax on Large Fortunes. The tax will be applied from 2020 to the personal wealth of individuals such as real estate, movable property, luxury goods, financial assets, rights, cash and all other tangible or intangible assets with economic value, of which it owns or is in possession of them.
As the law points out, the taxpayers are: a. individuals residing in the Plurinational State of Bolivia, with wealth located or placed in the national territory and / or abroad; b. Individuals not resident in Bolivia, who have fortunes located or placed in the territory of the Plurinational State of Bolivia. Companies are not subject to this tax.
It is important to understand that for the application of this tax, the regulations consider that nationals or foreigners who remain in the Plurinational State of Bolivia for more than one hundred and eighty-three (183) days, continuously or discontinuously, will be considered residents.
The taxable event occurs when the accumulated net fortune as of December 31 of each year, of the taxpayers is greater than Bs. 30,000,000.- (Thirty Million 00/100 of bolivianos) or its equivalent in foreign currency.
The taxable base will be constituted by the net value of the fortune, which will result from the summation of all assets accumulated by the taxpayer less the deductions provided for in this Law and its regulations. In marriages under the joint property or community property regime, the taxable base of the tax for each spouse is made up of the total value of the personal fortune and fifty percent (50%) of the value of the fortune accumulated during the marriage.
In determining the taxable base of the tax, capital balances pending payment for loans will be deducted. Goods that are part of the household goods will not be counted.
The following scale will be applied progressively to the Taxable Base: From Bs. 30,000,001.- to 40,000,000.- 1.4%, from 40,000,001.- to 50,000,000.- 1.9%, from 50,000,001.- henceforth 2.4%. Taxes on property and profits will be considered deductible.
The tax will be determined, declared and paid annually by means of an Affidavit that the taxpayer must present to the Tax Administration, in the terms and conditions determined by the regulations, leaving the Executive Branch with the power to establish through regulations the advance payment of the tax with discounts of up to fifteen percent (15%). It is important to note that the same rule considers that the acts of transfer of property simulated or apparent to the detriment of the treasury will not have legal effect in determining the taxable base of this tax.
Those taxpayers to whom this tax applies, may be subject to fines of 200% of the tax to be paid if they fail to comply with this law. Further provisions to regulate this law are expected through Supreme Decree.
