Costa Rica: Tax Incentives to Encourage Investment
The Directorate of Taxation issued a resolution which widens accelerated depreciation and is applicable to goods purchased and investments made this year.
Thursday, March 5, 2009
María Siu wrote in the Prensa Libre website: "Now all taxpayers or declarers, without any resolution from the tax administration, may use the accelerated depreciation method on new tangible goods. Accelerated depreciation is part of the Government’s actions under the Shield Plan to face the economic crisis. Depreciation is an expense that companies can include in calculating the profits on which to pay their taxes. This mechanism applies only to the depreciation of new assets acquired or realized from January 1 to December 31, 2009."
Cars between 0-6 years old will incur a 30% selective excise tax with a tax burden of 53%, and those over 6 years old will incur a tax of 48% and have a tax burden of 73%.
The selective consumption tax charged on hybrid cars has dropped from 15% to 10%.
It has been noted that the Costa Rican Colon could depreciate 20% more against the dollar in the U.S. and with that correction the exchange rate will reach 650 colones per dollar during 2014.
Legislators from several Costa Rican parties favor abolition of the sales tax on diesel, but only so long as there is no increase in gasoline prices.
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