Costa Rica: Modifications to Free Port Law Project

Suppliers selling at least 40% of their production to free port companies will enjoy the benefits of the tax regime.

Thursday, August 13, 2009

Previously, the benefits were granted to suppliers with "a significant portion", without establishing percentages, a far too wide concept.

"Free port companies currently don't pay any income taxes. Under the law project, companies investing in localities with less relative development will pay 5% for the first 12 years, and 15% the following 6 years", reported website ElFinancierocr.com. "For investments in areas of higher relative development, income tax would be 5% for the first 8 years and 15% for the following 4".

More on this topic

Free Zone Bill Moves Forward in Costa Rica

December 2009

If the act is approved in the Economic Matters Commission, the bill would move on to the Legislative Assembly.

The idea is for the bill to be passed before the end-year recess, which starts December 18th.

"This project extends the existing Free Zone law by adding a new category for manufacturing companies, and puts the country in line with WTO Agreements on subsidies and compensatory measures", reported Elfinancierocr.com.

Free Zone Law Moves Forward in Costa Rica

September 2009

The Economy Commission approved the project, which now moves on to the legislative plenary.

Companies located in the Greater Metropolitan Area (GAM) will have to pay 6% income tax for the first 8 years and 15% for the following 4.

"Representatives included a transitory article, under which the state will have 4 years to foster the installation of industrial parks or modernizing the existing ones in Limón, Puntarenas, the south zone, Liberia and the north of the country", reports Nacion.com.

Guatemala: Free Port Law Stuck

August 2009

Exporters consider the country is losing competitiveness against the rest of Central America.

The decrees modifying Free Port and Maquilas Laws have been waiting in Congress for over 4 years.

"The proposed changes would foster the creation of industrial parks and supply networks, by granting them tax benefits", reports Prensalibre.com.

Problems Ahead for Costa Rica Free Port Law

July 2009

Three points exist that could complicate the approval of the Free Port law in the Costa Rican Congress.

Politicization of the benefited companies, creation of a fiscal paradise and transferring the favorable impact of investment to less developed areas are points doubted by several congressmen.

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