Legal tax engineering is a mandatory business practice for anyone who wants to be competitive in today's globalized world, and only those who are not entrepreneurs can afford to refuse to acknowledge this fact.
With the same firmness that we criticize businesspeople who evade taxes or bribe officials to get a contract, we must defend every business practice which is framed within the law to pursue the best use of available resources to generate wealth through the production of goods and services, which is what businesses do.
The deadline for dissolution of corporations so as not to be taxed this year has passed; those who have not done so can start the process now in order to be exempt from future taxes.
Any legal entities that are dissolved from now on will have to pay the tax for the year when they begin the process of dissolution.
According to an article in Nacion.com, "The LIP [Ley de Impuesto a las Personas Jurídicas or Law on Taxes for Legal Entities] also amended Article 129 of the Notarial Code, allowing notaries to handle the liquidation of commercial companies when the solution is unanimously agreed by its partners.
Lack of clarity in the text of Costa Rica’s law imposing a tax on corporations, is creating ambiguities and difficulties in collection.
The National Registry is experiencing many difficulties in implementing the collection of tax on corporations, because it lacks allocated funds to proceed, and the registry of MSMEs at the Ministry of Economy, Industry and Commerce (MEIC) is not very helpful because of its own shortcomings.
The country will charge a single fee of $300 annually to corporations, limited liability companies and other legal persons.
The Ministry of Economy and Finance (MEF) has introduced in the National Assembly a bill that will increase the preferential interest rate on mortgages valued from $80,000 to $120,000, and has also modified the payment of the flat rate tax for corporations and legal individuals, the website PanamaAmerica.com reported.
A new annual tax applied to existing and new legally registered companies will become effective on April 1st.
Law 9024, the Company Tax Law, imposes a tax on all corporations, as well as branches of foreign companies or their representatives and individual limited liability companies that are registered or hereafter entered in the National Registry.
The government has reiterated that the new tax on corporate bodies, approved in first debate in Congress, does not apply to Micro and Small Enterprises.
The new statements come in the face of recent criticism of the bill, by some opposition representatives.
The proposal, which intends to charge a tax of $300 for corporate bodies registered as active and a $150 for those who are non active, and was approved in first reading in the Legislative Assembly and is currently being debated in the Constitutional Court.
Limited Liability Companies have a new, more flexible legal framework that is in line with international patterns.
Rubén Bustamante, a specialist in tax law, explained the new regulations to La Prensa of Panama, highlighting the differences with the previous version: "These companies can now use a different name than that of the partners, engage in civil and commercial activities, be formed by more than 20 partners and a minimum of two, and they may have both individuals and legal entities as members. The amount of social capital which was previously limited to $500 thousand has no limits now."
Chicas Vilchez & Ruiz is a professional finance and accounting firm providing Auditing, Consulting, Outsourcing, and Tax services in El Salvador, Central America and the United States.
Operates in El Salvador, Costa Rica, Guatemala, Panama, Honduras and Nicaragua
Phone: (503) 2264 8069
Magnalex Abogados is a Costa Rican Law Firm with extensive experience in a broad spectrum of legal services. For over 28 years, our Law Firm has been committed to providing top-quality legal advice.
Operates in Panama, Nicaragua, Honduras, Guatemala, El Salvador and Costa Rica
Phone: (506) 2224 8000 - (506) 2283 3373
KC Public Accounting is a full service public accounting firm. We are a member firm of RSM International which expands our reach and capacity to help you with your specific business needs.
Operates in El Salvador
Phone: (503) 25349944