I. HIGH IMPACT TAX UPDATES
1. Amendments to the 2026 General State Budget (PGE). Law No. 1755 (July 29, 2026).
Law amends the 2026 General State Budget and introduces a five-year exemption from Customs Duty (GA) and Value Added Tax (VAT) on the importation and domestic sale of inputs, seeds, drones and related accessories, genetic material, tools, equipment, capital goods and industrial plants intended for the agricultural, industrial, construction, transport and mining sectors. It also provides for the termination of certain trusts funded by the General Treasury of the Nation (TGN) that have fulfilled their purpose, are inactive or have low execution rates.
2. Specific Consumption Tax (ICE) Rates for Electric and Hybrid Vehicles. Supreme Decree No. 5653 (July 9, 2026).
Supreme Decree No. 5653 establishes the Specific Consumption Tax (ICE) rates applicable to imports of electric and hybrid vehicles through the end of 2026 of electric and hybrid vehicles. The applicable treatment varies depending on the propulsion technology and whether the vehicle is new or used.
Key provisions include:
- Electric vehicles: subject to a 0% ICE rate, including passenger cars, motorcycles, road tractors and goods transport vehicles, including new vehicles and used vehicles up to five years old.
- Hybrid vehicles: gasoline hybrids are subject to preferential rates, while diesel hybrids remain subject to a higher tax burden.
- Mild hybrid vehicles: gasoline passenger vehicles are subject to a five percent (5%) rate when new and a 15% rate when used.
We recommend that companies planning to acquire or renew their fleets in fiscal year 2026 should assess the relevant propulsion technology and customs tariff classification in advance to determine the applicable ICE rate and identify any available tax benefits.
II. TAX INITIATIVES TO FOLLOW UP AND CONTROL
1. Bill on Investments. Bill No. 684/25.
Bill No. 684/25, which proposes to replace Law 516 and establishing a new framework for domestic, foreign, and mixed investment, was submitted to the Chamber of Deputies on August 11, 2026. Following its referral to the competent committee, the bill was returned to the Executive Branch to address formal observations and is currently pending resubmission to the Plurinational Legislative Assembly.
Among its main tax incentives, the Bill provides for an exemption from customs duties (GA) and VAT on the importation of certain capital goods, machinery, and new production equipment intended for eligible investments, for a period of three years, extendable for up to an additional two years.
Projects qualifying as promoted projects may, based on their score under a performance matrix, claim a tax credit against Corporate Income Tax (IUE) ranging from 25% to 80% or, alternatively, apply accelerated depreciation to certain assets.
2. Bill to Repeal Law No. 2434 on Value Adjustment and Maintenance. Bill No. 204/2025-2026.
The Bill proposes eliminating the UFV as the statutory unit for value adjustment and maintenance. Obligations and other legal relationships currently denominated in UFV would remain valid but would be converted into bolivianos on a one-time basis and would no longer be adjusted based on changes in the UFV. From a tax perspective, the proposal would affect both the adjustment of tax liabilities under the Bolivian Tax Code (CTB) and the constant-currency restatement used to determine Corporate Income Tax (IUE). Its implementation would therefore require amendments to the CTB, the IUE regulations and other provisions that currently use the UFV as an adjustment parameter.
III. OTHER TAX NEWS
1. Autonomous Municipal Government of Cochabamba. Extension of the Exceptional Regime for the Waiver of Penalties and Interest on Municipal Tax Liabilities. Municipal Law No. 1880/2026.
The Municipal Law extends the exceptional regime through October 5, 2026, waiving penalties and interest on Cochabamba municipal taxes provided for under Municipal Law No. 1838/2026 and provides for communication measures and the allocation of resources for its implementation.
2. Autonomous Municipal Government of Santa Cruz de la Sierra. Law on Regularization of Municipal Tax Payments. Municipal Law No. 1880.
The Municipal Law provides for a 100% waiver of penalties and interest on unpaid IPBI, IMPBI, IPVA, IMPVA and Municipal Business Operating License Fee liabilities for taxable events occurring through December 31, 2024, as well as on IMTO for taxable events occurring between January 1, 1995 and July 6, 2026.
