Bolivia has introduced a tax reform allowing businesses operating under the “zero rate” VAT regime to deduct previously non-creditable 13% VAT on purchases, reducing their Corporate Income Tax (IUE) burden and improving cash flow from 7 April 2026.
Bolivia’s National Tax Service (SIN) has introduced a regulatory update yesterday, 7 April 2026, aimed at easing the tax burden on businesses operating under the “zero rate” VAT regime. Through Regulatory Board Resolution (RND) 102600000010, companies can now deduct previously non-creditable VAT from purchases when calculating corporate income tax (IUE).
The reform aligns with Supreme Decree No. 5563, which amended IUE Regulations (DS No. 24051). It also repeals Article 6 of RND No. 10-0038-13. Previously, the 13% VAT paid on inputs could not be deducted, effectively increasing the taxable base for IUE. Under the new rule, this VAT is now treated as a deductible expense, reducing overall tax liability.
The government enacted Supreme Decree 5563 on 6 March 2026.
The measure provides immediate relief to industries that sell goods or services at a “zero rate” but incur VAT on local purchases, including:
- International transport (cargo and passenger services)
- Publishing sector (books produced with VAT-taxed inputs)
- Capital goods importers and distributors
Before this update, the 13% VAT on inputs was a non-recoverable cost, inflating profits on paper and increasing IUE obligations. Now, businesses can deduct these costs fully, improving cash flow and ensuring fairer taxation.
The SIN also confirmed that existing invoicing systems already support the identification of such transactions. While zero-rated invoices do not generate VAT credits for buyers, the issuing companies now benefit through reduced corporate tax burdens.
