Economic and Tax Measures in Latin America in response to COVID-19

Not only is this pandemic affecting  the health of people around the world, the consequences for most countries’ economies may be even more devastating. It is for this reason that, in addition to health-related control measures, many countries are also taking steps aimed at mitigating the effects on their post-pandemic economies. Based on a document shared by the Inter-American Center of Tax Administrations (CIAT), we have prepared a summary of the main measures being adopted around Latin America.

  • Most countries are providing exemptions of customs duties and charges for imports of medical supplies, vaccinations and any other product used in fighting the virus. They have also taken steps to expedite procedures for allowing the goods to enter the country.
  • They have provided for several options in the case of financial and mortgage loans:
    • Granting lines of credit at preferential rates for certain sectors of the economy.
    • Guaranteeing access to loans for small and medium-sized businesses.
    • Flexible terms for debt.
    • Rescheduling of loans.
    • Reducing the interest rate for monetary policy.
  • In the case of the filing of income-tax and VAT returns, most have chosen to extend the deadlines for filing, defer payments and eliminate penalty interest or other penalties for late payment until December 31, 2020.
  • Measures have also been taken in the case of social security in an effort to protect jobs, such as extending the deadline for payment of social security tax and providing exemptions from this tax for certain types of businesses. 

In the specific case of Venezuela, the economic measures adopted under Decrees No. 4,166, published in Official Gazette No. 41,841 dated March 17, 2020;  No. 4,167,  published in Official Gazette Special  Issue No. 6,520; and No. 4,168, published in Official Gazette Special Issue No. 6,521, are as follows:

  • Exemption of VAT, import duties and charges, as well as any other applicable tax or duty, for imports of tangible personal property by agencies or entities of the National Public Administration for use in preventing the spread of the COVID-19, as well as a VAT exemption for sales of these same products within the national territory. 
  • Ratification of the freeze on dismissals.
  • Special provisions for payment of outstanding loans, extending the deadline for payments of principal and interest.

Please feel free to contact us if you have any questions or need legal assistance in connection with any situation that may arise during this pandemic.

Ysabel Figueira