Tax agency plans to skim 2 percent from credit card transactions

The finance ministry has come up with a new way to collect more taxes.

Via what amounts to a hidden resolution, the Dirección General de Tributación has told banks and processors to skim 2 percent for nearly every credit card transaction starting Oct. 1. The money is supposed to be held for eventual payment of income taxes.

The resolution was tucked away in a nearly inaccessible part of the Web page of the Ministerio de Hacienda, purportedly for public comment. There was no general announcement, although the tax agency contends the proposal was available for public comment since June.

Two resolutions published in the La Gaceta official newspaper Monday described the procedure. The money that is retained is supposed to be applied to future income tax payments. If the amount is in excess of what the taxpayer owes at the end of the year, the balance is supposed to be returned. There is no indication in either resolution about interest being paid, although that is a possibility.

The measure is expected to affect directly expats in the restaurant and tourism business who accept payments by credit cards. Credit payments that are handled outside the country and outside the local banking system would not be affected.

The measure almost certainly will generate litigation, although there is precedence because some sales taxes are collected the same way.

Businesses that are on the so-called simplified system, as are many bars, have been excluded from the requirement, according to the resolution. They pay sales taxes ahead of time when products are delivered.

The resolutions also include professionals, such as physicians and lawyers who are notorious for ducking taxes. The tax agency has been pushing for more use of credit cards so the investigators there can keep track of payments to professionals. This resolution would seem to favor cash payments.

Some merchants might be inclined to impose a 2 percent surcharge on credit card payments.

There does not seem to be any adjustments outlined for cases where a major credit card payment is canceled. This might take place, for example, when a tourist cancels reservations for whatever reason.

News of the policy was published first Thursday by La Nación.  There have been no formal responses from merchants who might be affected and their trade organizations.  The resolutions were signed by Carlos Vargas Durán, director general of Tributación. They are  DGT-R-035-2014 and  DGT-R-036-2014.

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