Through Official Register Fifth Supplement No. 81 dated July 15, 2025, the General Regulations to the Law of National Solidarity were published. This regulations establish how to access the income tax reduction for donations made to the National Police and Armed Forces.
Below is a summary of the most relevant provisions:
- On the goods that may be donated
The Ministry of Defense and the Ministry of the Interior will prepare catalogs of goods based on institutional needs. These goods include:
a) Motor vehicles: patrol cars, motorcycles, trucks, ambulances, buses, machinery, armored amphibious vehicles, boats or launches, sweeper trucks, armored vehicles, battle tanks, among others;
b) Technological equipment: radars, cameras, drones, scopes, GPS devices, communication radios, batteries, jammers, wireless tools, systems or software, scanners, computers, preventive or corrective maintenance, among others;
c) Forensic equipment: detectors, chromatographs, laboratory equipment and supplies, polygraph equipment, among others;
d) Weapons: non-lethal weapons, all types of firearms, ammunition, explosives, among others;
e) Protection and security: protective clothing, helmets, vests, masks, survival kits, shields, tactical accessories, among others;
f) Aircraft: helicopters, airplanes, light aircraft; and,
g) Any other items provided by the relevant authorities.
2. On the donation procedure
The donor must issue a letter of intent addressed to the Ministry of the Interior or Ministry of Defense. The corresponding ministry will assess the relevance of the donation based on institutional needs and will issue feasibility reports. Once approved, the donation or remission contract will be signed.
- Application of the Tax Reduction
a) If the donation does not exceed 30% of the income tax incurred, it will be treated as a tax credit. In that case, the regulation establishes that the value should not be recorded as an accounting expense.
b) If the donation exceeds the 30% limit of the income tax incurred, or if no income tax is incurred, such amounts must be recorded as non-deductible expenses.
c) The value of the donation will be determined based on the total amount indicated in the invoice. However, the amount stated must be consistent with market prices.
d) The VAT paid cannot be recorded by the donor as either an expense or a tax credit.
e) Real estate properties may also be donated through the execution of a public deed, using the cadastral appraisal as a reference.
The regulation establishes that the benefit is effective from June 11, 2025, and therefore will be applicable for the settlement of the Income Tax for fiscal year 2025.
Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144
