Jul 4, 2025
An accounting expense is any expense recorded in the books that reduces the accounting profit for the period. It can include salaries, purchases, depreciation, travel expenses, rent, among others. Its recognition is based on the accrual principle and standards such as IAS 1 and IAS 2.
A tax-deductible expense, on the other hand, is one that meets the requirements established in the Income Tax Law (Law 7092) and its regulations. For the Treasury to accept it as deductible, it must be:
a). Useful, necessary and relevant to produce taxable income (article 7).
b) Verified with valid documentation (electronic invoice with correct CABYS, contract, etc.).
c). Directly linked to the taxpayer's economic activity.
Classic example: If a company records an expense in its accounting for professional fees, but doesn't have a valid electronic invoice, that expense will be counted... but not deductible.
Common risks in companies at the half-year closing
As the Treasury refines its control systems, these are some of the most common errors we have detected in companies:
a) Travel expenses without formal requirements
b) According to Article 8 of the Income Tax Law Regulations, travel expenses must be documented with the reason for the trip, dates, location, authorized person, and reasonable limits. If this is not done, the Treasury will reject it as an expense.
c) Rentals without a contract and without D-151
d) Many rentals are recorded as expenses without a signed contract or the corresponding information statement. This may lead to objections from the DGT.
e) Incorrectly calculated or unsupported depreciations
f) The DGT may reject depreciation if the assets are not inventoried or supported by invoices. Furthermore, if a percentage other than the one stipulated in the Regulation is used, it must be technically justified.
g) Personal expenses of the partner charged as operating expenses
h) Some business owners charge personal payments (such as club memberships, fuel, or travel) as business expenses. If they cannot be proven to be related to the income-generating activity, the Treasury may treat them as dividend distributions or non-deductible expenses.
Recent changes that aggravate the risk
CABYS 2025: Since June, the Treasury has been validating that the codes used in electronic invoices match the taxpayer's activity. An expense with an incorrect code can raise red flags during an audit.
Version 4.4 and REP: The new version of the electronic invoice includes the Electronic Payment Receipt (REP), which will be mandatory for many transactions involving partial payments or credits. The absence of the REP may result in the Treasury being unaware of the expense or attributing it to unrecorded income.
TRIBU-CR: Starting in August, the Treasury will automatically cross-reference information between income tax returns, VAT, purchase returns, and banks. If an expense is recorded in the accounting records but not on the D-151, or if it doesn't have an electronic backup, the inconsistency will be detected immediately.
Recommendations from EAS LATAM
a) To avoid costly adjustments, we recommend applying a double accounting and tax control before the end of July:
b) Check whether each recorded expense has valid support: correct electronic invoice, contract, evidence of the service received.
c) Verify whether it meets the criteria of usefulness, necessity and relevance to produce taxable income.
d) Validate that each invoice has the correct CABYS and is registered in the electronic system.
e) Reconcile the accounting records with the declarations in VAT, D-151 and Income.
f) Separate personal or non-deductible expenses from the accounting record.
Conclusion
At a time when the Treasury is automating its audits and demanding electronic traceability, companies cannot afford to improvise. The close of the first half of the year is the ideal time to review the quality of records and ensure that accounting data is also deductible.
Source: Income Tax Law, Law 7092, Article 7 and its Regulations.
Facturele Bulletin No. 19, June 3, 2025 – CABYS Update and Electronic Invoicing.
Resolution MH-DGT-R-33-2023 – Version 4.4 of electronic invoice and REP.
Official announcement on TRIBU-CR – Ministry of Finance, CP-41-2025.