The Tax Policy Committee of the Internal Revenue Service has established the process for applying the 3% cut to the income tax rate for micro and small enterprise or regular exporters of goods.[1] The Resolution establishes the following main points:
- For micro and small enterprise: Companies categorized as micro and small enterprises can apply the 3% income tax cut.
- Microenterprises are those with 1 to 9 employees and annual sales or gross annual revenue of US$300,000 or less. Small enterprises are those with 10 to 49 employees and annual sales or gross annual revenue of between US$300,000 to US$ 1 million.
- Microenterprises are those with 1 to 9 employees and annual sales or gross annual revenue of US$300,000 or less. Small enterprises are those with 10 to 49 employees and annual sales or gross annual revenue of between US$300,000 to US$ 1 million.
When filing the income tax return, the IRS will validate the category of the company whereby the system will allow the beneficiary to directly apply the reduced rate.
- For regular exporters: Regular exporters that meet the requirements for this category and are listed in the register of regular exporters of goods can apply the 3% income tax cut.
To apply the 3% income tax cut, the IRS will ask the taxpayer to confirm:
- Compliance with the requirement to have increased net employment.
- Compliance with the requirement to have maintained the jobs it created.
[1] Tax Policy Committee Resolution No. CPT-RES-2019-005, published in Official Register No. 88 on November 26, 2019.
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