The Bolivian Government’s Supreme Decree No. 5503 introduces extraordinary tax measures aimed at economic reactivation, cleanup of tax receivables, capital regularization and investment promotion, structured around four main pillars from a tax perspective.

Tax regime for economic reactivation

1.1. Reinstatement of pandemic-era tax measures (FY 2020)

The Decree reinstates a set of tax incentives that had been applied in 2020 under Supreme Decree No. 4298, reintroducing them to support economic recovery.

1.1.1. Tax incentives for companies

  1. Incentive for domestic production (RC-IVA): RC-IVA taxpayers may credit, in addition to the VAT included in invoices for purchases of products made in Bolivia, an additional 20% of such VAT as an advance payment of the tax. This benefit will be available until December 31, 2027.
  2. Accelerated depreciation (IUE): taxpayers may voluntarily apply an accelerated depreciation method by using half of the useful life established in the applicable rules for assets acquired between January 1 and December 31, 2026. Mining and hydrocarbons companies are expressly excluded. The choice must be communicated to the tax authority (SIN) and disclosed in the notes to the financial statements.
  3. Bad debt provisions: for FY 2025: the Decree allows deduction for IUE purposes of provisions for uncollectible receivables, under parameters equivalent to those used in 2020, allowing taxpayers to opt for the higher of (i) actual uncollectible credits in 2025, or (ii) 60% of those corresponding to 2026.
  4. Exceptional recognition of employer contributions as VAT credits: for hires made until March 31, 2026, taxpayers may credit as an advance payment of VAT 50% of employer contributions paid on salaries not exceeding four national minimum wages. This is an exceptional benefit available until December 31, 2026.

1.1.2. Reinstatement of SIETE–RG regime (entrepreneurs’ simplified regime)

The Integrated Special Transition System for Entrepreneurs to the General Regime (SIETE–RG) is reinstated, replicating the 2020 framework. Key features include: (i) a 5% turnover tax consolidating VAT, IT and IUE; (ii) availability for sole proprietorships and independent professionals with annual income up to BOB 250,000; (iii) mandatory invoicing, without generating VAT output or input credit; (iv) accumulation of VAT credit for later use when migrating to the General Regime; (v) automatic migration upon exceeding the threshold or completing three years in the system; and (vi) exclusions for extractive activities, commission agents, ICE taxpayers, rights exploiters and lessors.


1.2. New incentives for independent professionals: VAT input credit compensation

Independent professionals may fully offset VAT input credits included on invoices for personal expenses and/or expenses linked to their activity, without requiring a direct or exclusive link to income generation.
Such VAT credits may be used: (i) against VAT output tax; (ii) against withheld or self-assessed RC-IVA; and (iii) as a carryforward credit balance without quantitative limit. The Decree provides for ex post controls and prohibits the introduction of additional prior requirements. The tax authority must issue implementing rules within 10 days.

1.3. Customs incentives

1.3.1. Payment facilities for customs duties: the National Customs Authority may grant payment plans of up to 36 months for duties derived from imports, under the Bolivian Tax Code.

1.3.2. Temporary deferral of the tariff (GA): the tariff is reduced to 0% until December 31, 2026 for imports of machinery, equipment and functional units intended for strategic sectors (food, agro-food, textile, metallurgy, among others), as detailed in the Decree’s annexes.

1.4. Elimination of prior import authorizations issued by SENAVEX
The Decree eliminates the requirement for Prior Import Authorization issued by SENAVEX, abrogating procedures in place since 2016. Covered imports will be subject only to the general customs regime and applicable technical regulations, with the aim of reducing administrative barriers and streamlining foreign trade.

Extraordinary statute of limitations relief and cleanup of tax receivables

On a one-time basis, the Decree empowers the tax authority to declare ex officio the statute of limitations for interest and administrative penalties related to tax obligations whose taxable events were perfected up to October 31, 2025. Key features include: (i) automatic extinguishment without a taxpayer request; (ii) mandatory system write-offs and bulk resolutions; (iii) no refunds or reimbursements for prior payments; (iv) exclusions for obligations with final judgments, withheld taxes not remitted, and tax crimes; and (v) a prohibition on initiating or continuing proceedings regarding extinguished obligations.
The Decree also refers to an Extraordinary Regime for Capital Regularization and Repatriation, and to an Extraordinary Regime for the Promotion and Protection of Investments, including legal and tax stability commitments for up to fifteen (15) years.

Conclusion

Overall, DS 5503 introduces a coherent set of measures aimed at economic reactivation, tax relief and improving investment conditions. The practical effectiveness of these measures will depend on timely, clear and technically consistent implementing regulations and on predictable execution by the competent authorities.