Bolivia Payroll & Tax Overview A GUIDE TO DOING BUSINESS IN BOLIVIA 2016

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Lester Walsh
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1 Bolivia Payroll & Tax Overview A GUIDE TO DOING BUSINESS IN BOLIVIA 2016

2 Contents 1.0 Key Country Facts and Public Holidays Business and Culture in Bolivia Visas and Work Permits Tax and Social Security Compliance Statutory Absence/Payments In-country Payroll Providers About This Payroll and Tax Overview The Global Payroll Association, Inc.; All Right Reserved -2-

3 1.0 Key Country Facts and Public Holidays 1.1 Official Language The official Language is Spanish, Quechuan, Aymara, Guarani, Leco, Puguina 1.2 Currency The official Currency is Bolivian Boliviano. 1.3 Country Dial code The country dial code is Country abbreviation The country abbreviation is BO. 1.5 Statutory Filing Payment Methods Electronic method 1.6 National Minimum wage 1440 Bolivian Bolivianos per month plus an obligatory Christmas bonus equal to one month s pay, prorated for the amount of time the worker has worked in their present position. 1.7 Filing Deadlines 120 days after the fiscal year-end. 1.8 Fiscal year Calendar year 1.9 Time Zone Bolivia Time Zone UTC-04: Holiday Holiday Type 01 January 01 January New Year s Day National Holiday 22 January 22 January Plurinational State Foundation Day National Holiday 08 February 27 February Carnival National Holiday 09 February 28 February Carnival National Holiday 25 March 14 April Good Friday National Holiday 01 May 01 May Labor Day National Holiday 26 May 15 June Corpus Christi National Holiday 21 June 21 June Andean New Year National Holiday 06 August 06 August Independence Day National Holiday 02 November 02 November All saints Day National Holiday 25 December 25 December Christmas Day National Holiday 2016 The Global Payroll Association, Inc.; All Right Reserved -3-

4 2.0 Business and Culture in Bolivia 2.1 Establishing as an Employer 1. Make sure your business name is available at the Registry of Commerce: You can verify a company name via the internet or over the phone at no cost. To obtain a name reservation certificate, the fee is BOB Contact an attorney to do all paperwork and notarize them: The attorney will draw the articles of incorporation, bylaws and constitution act. 3. Set up the company deed in a national newspaper: According to Administration Resolution SNRC-DN No. 254/2003, the published announcement of a public deed of incorporation must contain a summary of the following information: Name, age, profession, nationality, and marital status of shareholders Company bylaws, power of attorney, Tax ID number, etc. 4. Have an accountant complete all opening paperwork 5. Register with the National Tax Service and receive a tax identification number 6. Acquire a business license and registration 7. Inspection of store front if needed 8. Open bank account and deposit needed capital 9. Register company with FUNDEMPRESA and at the Chamber of Commerce 10. Register for health insurance, at the Ministry of Labor and with the pensions systems 2.2 Employment In Bolivia, the average workweek is 40 hours, and typical workday is eight hours. In the past, employees would traditionally to a 2-hour siesta and lunch hour around midday. Many businesses are operating under horario continuo or continuous schedule, so businesses don t close during these breaks. With a few exceptions including grocery stores, restaurants, and some open air markets, most business are closed Sundays The Global Payroll Association, Inc.; All Right Reserved -4-

5 3.0 Visas and Work Permits 3.1 Visas Immigration requirements fall within the jurisdiction of Direccion Nacional de Migracion. According to Bolivian law, there are three forms of immigration: spontaneous, planned and selective immigration. Spontaneous immigration refers to the entrance of foreigners by their own initiative and their own expense. Planned immigration is oriented by the state, and selective immigration involves investors, professionals, industrial or farming technicians, and qualified labor. 3.2 Tourist Visas Nationals exempt from a Tourist Visa (GROUP I) are only required to have a current valid passport with a minimum validity of 6 months. Upon arrival tourists will be issued a temporary visa. Dutch citizens do not need a tourist visa, but: 1. Need to present your valid passport for almost 6 months 2. Flight tickets with return within 90 days 3. The Yellow Fever Shot. (if you have a contraindication, you can provide to the Bolivian Migration Office a Medical Certificate) Please note that, for any purpose other than genuine tourism (i.e. tours, sightseeing, etc.) nationals from countries included in (GROUP I) must apply for a Specific Purpose Visa 3.3 Specific Purpose Visas Business visa A Special purpose visa is granted for a stay in Bolivia of 30 days, and may only be renewed once for an additional 30 days. Requirements: 1. Visa Form in legible print, attaching a recent photo, without glasses. 2. It is required the international yellow fever shot. 3. This visa is required by anyone travelling to Bolivia to attend meetings for work (whether paid or unpaid), as representatives of N.G.O s, for adoptions, or for any purpose other than genuine tourism (i.e. tours, sightseeing, etc.). 4. A letter of intent from the company or organization outlining the nature of business and length of stay must be included with the application, except for tourists. 5. Letter requesting visa signed by applicant 6. Itinerary or copy of the airline ticket All foreigners must present financial proof (last bank statement). 3.4 Indefinite Visas A permanent visa is granted for one to two years and can be renewed. This visa can be extended to the family of the beneficiary of the visa. A Foreign ID card is issued to the beneficiary Requirements: 1. Valid passport with proof of a minimum two-year temporary residence 2. Notarized document addressed to the Undersecretary of Migration requesting residence (Must be signed by a lawyer) 3. Medical Certificate issued by the Instituto Nacional de Salud Ocupacional (Instituto del Torax Miraflores, La Paz) 4. Criminal Record Certificate issued by the Police Station at calle Sucre and Junin, La Paz 5. Proof of address, issued by the Police Station at calle Sucre and Junin, La Paz 6. Birth Certificate duly legalized in the country of origin by the Bolivian Consulate 7. Good Conduct Certificate issued by the nearest Police of the last place of residence, legalized by the Bolivian Consulate 8. Application form for Request for Permanent Residence 9. Completed application form 2016 The Global Payroll Association, Inc.; All Right Reserved -5-

6 4.0 Tax and Social Security 4.1 Tax Bolivia taxes individuals only on their Bolivian-source income, regardless of their nationality/residence. In this regard, income arising from goods/assets located or utilised economically within Bolivian territory and performance of any activity carried out within the country is considered Bolivian-source income. No Bolivian taxes are imposed on foreign-source income earned by individuals. The personal income tax (Regimen Complementario del Impuesto al Valor Agregado or RC-IVA) rate is 13%. Employers have the obligation to withhold and pay to the tax authorities the RC-IVA on gross income after deduction of social contributions and other concepts established by tax law. There are no local taxes on personal income in Bolivia. 4.2 Tax Registration Approval office of investment promotion grant to the applicants of incorporation; Print in the newspaper legal document of the enterprise; Ensure institution Name, a place what shall be used correspondence, MOA, Papers those are attested by the person of government endorsed, license for starting, and others those required permissions including VAT to doing foreign trading; Personal detail of the promoters, overseas, cannot skip to disclose the government authority of Bolivia; Lowest share is twenty five (25) of whole resources that shall not less than fifty (50) per cent, as directly investment policy; Listing with Chamber of commerce of Bolivia, as fdi course of action; Insurance for the organization cannot avoid to formation a new organization; It s need to submit application for a clearance from employment ministry; Corporate tax 25 (twenty five) per cent that applicable for corporate and liaison office where as VAT 13 (thirteen) per cent; Dividend of the enterprise is 12.5 (twelve point five) percent for trading corporation in Bolivia Foreign company Registration; Royalties 12.5 (twelve point five) per cent facilities for the overseas enterprise; Liaison remittance 12.5 (twelve point five) per cent after setup business; Banks of this state are friendly to non residence investors to cooperate them opening account or apply for credit; 4.3 Social Security In Bolivia, the Social Security Rate is a tax related with labor income charged to both companies and employees. Revenues from the Social Security Rate are an important source of income for the government of Bolivia because they help to pay for many social programs including welfare, health care and many other benefits. The Social Security Rate For Employees in Bolivia stands at percent. Social Security Rate For Employees in Bolivia averaged percent from 2004 until 2015, reaching an all time high of percent in 2011 and a record low of percent in The Global Payroll Association, Inc.; All Right Reserved -6-

7 5.0 Compliance 5.1 Employer Registration The main sources of Employment law in Bolivia are, codified laws supreme decrees, resolutions, and collective agreements and individual contracts (the Labour Law ). Bolivian law applies to people who work for foreign companies within Bolivian territory. For an employment contract to be enforceable under the Labour Law it does not have to be in writing. The following, however, are essential elements that an employment contract must have: capacity of the parties to contract; acceptance; object; and consideration. 5.2 Starters/Registration A written employment contract should contain the following: employer s contact details, (name, domicile, legal representative, identification number, legal representative s identification number), name of employee; identification number, age, nationality and domicile of employee; nature of service or task and place where service or task will be performed; amount of salary; duration; place and date of employment contract; name of children, age of children, and wife. The Labour Law also recognises collective agreements. Associated employers must enter into collective agreements with the employees, which are considered part of an individual employment contract. 5.3 Leavers/De-registration Termination of an employment contract is the result of a dismissal or a voluntary withdrawal. In either of the mentioned cases, the employee is generally entitled to severance and other benefits. According to the Labour Law dismissal of an employee only proceeds if the following occurs: intentional material damage caused to work instruments; disclosure of industrial secrets; negligent acts that may affect industrial security and hygiene; unjustified absence for more than six days; failure to comply with work agreement; and theft or robbery by Employee. If dismissal is for a reason not contemplated by the Labour Law, the employee may request the labour authorities to be reinstated in the work place or payment of corresponding social benefits may be requested Upon dismissal or resignation, the employer and employee must file a form (finiquito) before the Bolivian labour authorities The Global Payroll Association, Inc.; All Right Reserved -7-

8 6.0 Statutory Absence/Payments 6.1 Annual Leave There are different scales of annual leave depending on the seniority of the worker. To this respect; workers having performed from 1 to 5 years of service are entitled to enjoy 15 working days, from 5 to 10 years, 20 working days, and from 10 years onwards, 30 working days. Every worker is also entitled to 11 paid public holidays. 6.2 Parental leave Mothers in Bolivia are entitled to a total of 90 paid days of leave which is to be paid by the employer and the government. Fathers are entitled to only 3 days of paid leave, paid at 100% of their wage from their employer only 6.3 Sickness Employees in Bolivia are entitled to 5 full paid days of sick leave a year. 6.4 Disability Benefit The Caja Nacional de Salud must provide the covered employee with all the necessary medical assistance for any illness work related or not. Disability benefits are provided as part of a long term insurance by the pension funds that cover disability, old age and death. The benefits are monthly annuities that depend on the years of contribution to such fund by the employee. The employees must contribute to the mentioned fund up to 12.21% of their monthly remuneration. Disability benefits are paid based on the level of employee s disability as a result of the sickness The Global Payroll Association, Inc.; All Right Reserved -8-

7.0 In-country Payroll Providers ITOS is an international service provider offering fully integrated HR and payroll solutions in the Latin American region that promote collaboration, Connectivity and

9 7.0 In-country Payroll Providers ITOS is an international service provider offering fully integrated HR and payroll solutions in the Latin American region that promote collaboration, Connectivity and communication Since 2002, Expaticore has specialised in Local National and Expatriate payroll, Assignment Management Services and International HR Consulting Services The Global Payroll Association, Inc.; All Right Reserved -9-

10 8.0 About This Payroll and Tax Overview 8.1 Copyright All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher. 8.2 Disclaimer Every effort has been made to ensure that all information in this booklet is correct at the time of publication. This information should be used as reference only and not as a sole source of decision making. 8.3 The Global Payroll Association Global Payroll Association is the first international payroll association of its kind. We are a central hub for all-things payroll. A one-stop-shop supplying comprehensive directories, interactive training and in-depth country resources. We are here to help you with your global payroll needs, no matter how complex, connecting you with the world s leading experts and offering a forum to network with other like-minded global professionals. Global Payroll Association welcomes international payroll, HR and financial professionals of all levels The Global Payroll Association, Inc.; All Right Reserved -10-

The United Kingdom Worlds Oyster Ltd/Global Payroll Association 49 Greek Street London W1D 4EG 0203 871 8870 info@gpa-global.

11 The United Kingdom Worlds Oyster Ltd/Global Payroll Association 49 Greek Street London W1D 4EG The USA Worlds Oyster Ltd/Global Payroll Association 440 Louisiana Suite 900 Houston TX The Netherlands Worlds Oyster Ltd/Global Payroll Association Keizersgracht CS Amsterdam Netherlands 0031 (0)

Vietnam Payroll & Tax Overview A GUIDE TO DOING BUSINESS IN VIETNAM 2017

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