- Extension of VAT and Income Tax: The reform extends income tax and 18% VAT to services provided from abroad, including digital subscriptions and online services, which were previously untaxed.
- Removal of VAT Exemptions: VAT exemptions on online rental services, such as short-term property rentals, are removed, subjecting these services to the standard VAT rate.
- Tax on Low-Value Imports: VAT will now apply to low-value imports that were previously exempt, aiming to capture more revenue from small goods and online purchases.
- Increased Excise Taxes: Excise taxes on sugary drinks and alcoholic beverages are increased to promote healthier lifestyles and boost public revenue.
- Social and Infrastructure Initiatives: The government plans to expand the “Aliméntate” food assistance program, raise the public sector minimum wage, hire 20,000 new security personnel, and launch infrastructure projects, including a new train system and 116 police stations. Most tax changes will take effect immediately, with LVG tax regulations implemented within 120 days.
Source Taxbackinternational
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