On 28 December 2020, the Government Officially published the Budget Law for 2021 and Law No. 1355, which effects from 1 January 2021. Under Law No. 1355, a 5% VAT refund is introduced on sales prices for low-income individuals with monthly income below BOB 9,000. The Budget Law includes the following measures:
- The corporate tax exemption is repealed in case of capital gains derived from the sale or purchase of stock through the stock market and for capital gains derived from the securitization processes.
- New exemption is introduced in corporate income tax for interest paid in favor of creditors of public debt through the issuance of securities in foreign capital markets and for payments for the provision of legal and financial advisory services, and other specialized services linked to the issuance of public debt in foreign capital markets.
- Additional 25% tax applies for certain financial institutions with a return on equity index higher than 6%, so that that the tax also applies for financial leasing entities, general deposit warehouses, investment fund management companies, stockbrokers and securitization companies, and insurance and reinsurance entities.
