2021 Tax Amnesty (DL 173): A Chance to Settle Your Tax Debts in El Salvador
What Legislative Decree No. 173 Does
El Salvador's Legislative Decree No. 173 (DL 173) establishes a tax amnesty program that lets taxpayers settle overdue tax debts under significantly better terms. If you owe back taxes and have been hit with penalties and late-payment interest, this decree allows you to pay just the original tax amount -- without the extra charges that have been piling up.
The amnesty covers debts managed by both the DGII (Direccion General de Impuestos Internos, El Salvador's internal revenue authority) and the DGA (Direccion General de Aduanas, the customs authority). That means it applies whether you owe income tax, IVA (the value-added tax), Pago a Cuenta (advance income tax payments), or import duties.
This isn't a blanket forgiveness of what you owe. You still need to pay the underlying tax. But the waiver of fines and interest -- which can add up to a substantial portion of the total debt -- makes it much more realistic to get current.
Context for those abroad: If you own property, a business, or have investments in El Salvador, your tax obligations don't pause just because you live in the US. Overdue taxes on Salvadoran income, property, or business activity are covered by this amnesty. This could be a good time to clean up any outstanding obligations you've been putting off.
How This Benefits You in Practice
The most obvious benefit is financial. Penalties and interest on overdue taxes in El Salvador can grow quickly, sometimes rivaling the original debt itself. By wiping those away, the DL 173 amnesty can cut your total obligation down to a fraction of what it was. For many small businesses, that's the difference between being able to pay and being stuck.
But there's a practical benefit beyond the money: getting your tax record clean. In El Salvador, you need a document called a solvencia fiscal (a tax clearance certificate issued by the Ministerio de Hacienda, the Ministry of Finance) to do things like bid on government contracts, sign certain agreements, and even complete some banking transactions. If you have outstanding tax debts, you can't get one.
The alternative to settling voluntarily isn't just "keep owing." The DGII can initiate cobro coactivo (forced collection proceedings), which can result in frozen bank accounts, seized assets, and serious disruptions to your business operations. The amnesty is a way to avoid all of that.
Steps to Apply
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Request an updated account statement from the DGII. Before anything else, you need to know exactly what you owe. Ask for a detailed breakdown that separates the base tax from penalties and interest, so you can clearly see how much the amnesty would save you.
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Review the numbers with your accountant. Sit down with a tax professional and compare your options. Is the amnesty a better deal than your current payment plan, if you have one? In most cases the answer is yes, but every situation is different and it's worth running the numbers.
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Submit your application before the deadline. Once you decide to apply, you'll need to file the formal request along with any tax returns you haven't submitted yet. Don't wait until the last day -- gathering the right documentation takes time, and any mistakes can delay the process.
Key Dates
The amnesty period under DL 173 opened in October 2021. I recommend checking the full text of the decree or contacting the DGII directly to confirm the exact deadline for applications, since once that window closes, all penalties and interest go back into effect with no exceptions.
Here's the thing about tax amnesties: they don't come around every year. There's no extension, no second chance. If you have outstanding debts, now is the time to act.
An Opportunity Worth Taking
DL 173 is one of those rare chances to start fresh with your tax record. Beyond the savings on penalties and interest, it means operating your business without the weight of unresolved debts, without the risk of forced collection, and with the ability to get your tax clearance whenever you need it.
If you have questions about how to apply, how much you could save, or what documentation you need, the team at Contabilidad Hidalgo is here to help. We can review your situation, run the numbers, and walk you through the entire process so you get the most out of this amnesty.
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