The Government of Bolivia has enacted the new Bolivian Tax Relief Law No. 1733. The law introduces substantial modifications aimed at restoring legal certainty, promoting economic reactivation and mitigating historical tax contingencies.

Legal certainty and reduction of statute of limitations

One of the most relevant milestones of this law is the modification of the statute of limitations. The period is reduced from 8 to 4 years for the Tax Administration to exercise its powers of control, inspection, determination of tax debts and imposition of penalties.
 
This amendment provides greater predictability and decreases the time of exposure to tax risk for taxpayers.

Tax debt forgiveness and regularization regimes

The regulations establish two differentiated mechanisms according to the period of the debt:
  • Full Tax Amnesty: historical debts accumulated until December 2017 are forgiven, as well as debts accrued during the full 2020 fiscal year (affected by the COVID-19 pandemic). Except for the 2020 fiscal year, this benefit applies exclusively to obligations not exceeding Bs. 10 million.
  • Partial Regularization (Periods 2018 to 2025): allows regularization of debts without application of fines or interest. The taxpayer must pay the updated omitted tax plus 50% of the value maintenance adjustment. A period of 120 days is granted to take advantage of the benefit, with payment plans of up to 36 installments.

VAT operational reform and transparent invoicing

Under this law, the Value Added Tax (VAT) will be calculated in a disaggregated way, that is, outside the net value of the invoice. This change aligns Bolivia with international transparent taxation standards.
 
By calculating VAT on the net value, the mathematical distortion that raised the effective rate to 14.94% is eliminated, consolidating a real and transparent rate of 13%.
 
Immediate operational impacts for businesses:
  • Systems and ERP: Urgent adjustment of invoicing modules and parameterization of tax bases.
  • Prices and Contracts: Review of current commercial clauses and update of price catalogues.
  • Compliance and Standardization: Standardization of new issuance formats with the National Tax Service (SIN).

Commercial deregulation and business promotions

In order to boost commerce, the law excludes business promotions from the scope of Law No. 060 (Gambling Law). Consequently, the Gaming Supervisory Authority (AJ) loses competence over these activities, eliminating restrictive bureaucratic procedures. 
 
Likewise, the Gambling Tax (Impuesto al Juego or “IJ”) that was levied on commercial promotion activities is abolished.

Validity and next steps

The Tax Relief Law will enter into force from the day following its publication, except for the change in the VAT rate, which take effect as of the first day of the month following publication of the law. 
We recommend a timely diagnosis of your tax statements to identify debts eligible for tax amnesty or payment facilities.