To exonerate is to exempt a natural or legal person from a burden or obligation that they had contracted through a contract or by mandate of a norm.
That is, by exonerating a subject, he will no longer have to pay the debt or fulfill the duty that had been assigned to him.
The word exonerate is usually used more commonly in bankruptcy law to deal with the release of debts that the bankrupt has contracted.
Although its use is more widespread in the relief of debts in the world of bankruptcy, or the exemption from paying taxes, the exemption affects all jurisdictions. For example, a guardian can be exempted from some of his obligations, which would affect civil law. In criminal law, the expression pardon is often used and not so much exonerate.
Unsatisfied liability exemption benefit
Within bankruptcy law, there is a figure known as BEPI (Benefit for Exemption of Unsatisfied Liabilities). This means that once the end of the bankruptcy proceedings has been reached and there is no more equity that can settle the outstanding debts, it is approved to release the bankrupt from the remaining debts.
This BEPI only applies to certain cases and with several requirements to meet:
- It only works in insolvency proceedings for natural persons. Companies will not see their debts exonerated by this figure.
- It must not be a guilty contest, it must have been classified as a fortuitous contest.
- The debtor must demonstrate his good faith.
- There must have been an attempt to agree prior to exempting the bankrupt from wanting to pay their debts. For example, offer an installment payment.
- Not have a criminal record consisting of having committed a property or labor crime in the 10 years prior to the declaration of insolvency proceedings.
- The bankrupt must have settled all his credits against the estate and the privileged bankruptcy credits, in addition to 25% of the ordinary ones.
Tax exemption and Social Security for workers
It is common to find exemptions in tax or labor laws that exempt the payment of certain taxes or Social Security contributions in order to encourage some business or labor behavior.
This exemption from tax payments to some companies or self-employed workers must be included in a law, with a specific definition, requirements and a record of the duration that this tax exemption will have. It tends to encourage business growth. This is so since, by exempting the State from payment of a tax, a company can dedicate that amount (originally intended for the tax) to the investment of its business.
Is this tax exemption a tax amnesty? The answer is negative, amnesty and exoneration are not the same, although they may have similar consequences. Amnesty forgives, that is, it forgets that there was ever an obligation and, therefore, it no longer has to be faced. On the other hand, when speaking of exoneration, it is not forgotten that there was a responsibility, but only the obligation to respond to it is relieved.