After in Costa Rica the mayor of Alajuela filed an action of unconstitutionality to revert the authentic interpretation approved by the deputies for the payment of real estate taxes applicable to free zones, the Chamber ruled negatively to the legal recourse filed.
The magistrates determined that the allegations presented on March 16, 2021 by Humberto Soto, mayor of the municipality of Alajuela, were incorrect and the appeal was rejected.
From 12 to 14 November representatives from free zones in Latin America will be gathering together in Panama City to discuss issues such as changes in legislation and the role of free zones in the logistics chain.
The topics to be discussed range from innovation and new business in free zones and industries to changes to key legislation for the creation of logistic nodes.
In Costa Rica, pressure from employers to maintain tax exemptions in free zones is increasing.
According to an article in Elfinancierocr.com at a meeting of a group of businessmen which included the main force behind the increase in taxes in the free zones, the former presidential candidate Otton Solis, there were no positive results, and the same outcome was seen at a meeting held with the full bench of the Citizen Action Party, of which Solis is the leader.
The Foreign Trade Promoter has revealed in a study the benefits that free trade zones contribute to the country, including the 58 thousand jobs that pay 60% above the average private sector salary.
From a press release by PROCOMER:
A study by PROCOMER reveals the benefits of free zones in Costa Rica:
- Companies under this regime have become a source of employment for 58,000 Costa Ricans whose wages are 60% higher (1.6 times) than the average national wage in the private sector.
In Costa Rica, the Association of Free Zones and Investment promoter CINDE are lobbying against the imposition of new taxes on businesses.
The proposed measure, now under a fast track approval system in the Legislature, include a tax on dividends for those companies who establish themselves in in the zone after 2015, plus requirement to pay municipal taxes.
The Executive and Ministry of Commerce are clashing over the collection of taxes from 2015 from companies in free zones or industrial parks, included in the tax reform bill.
The new regulations are included in the proposed fiscal reform presented by the government to the Legislative Assembly.
President Laura Chinchilla, was emphatic on the need to approve the fiscal plan in Congress,” ‘so that the country does not go straight into a highly volatile economic situation’.
Modifications to the Costa Rica Free Zone and Active Improvement Regime include 52 procedures that can be performed online.
Among the steps that can be done online is the facility for businesses to apply for entry into the free zone regime, and changing the level of investment as well as the minimum level of employment.
Procomer General Manager, Jorge Sequeira, said the procedure simplifications are aimed at attracting more foreign investment into the country.
Authorities published which sectors will benefit from the regulation passed on January 2010.
These include companies employing at least 200 people, those who devote at least 0, 5% of its sales on research and development in local operation, those certified ISO 14000, LEED or equivalent at its plant in Costa Rica or connected with cutting-edge industries in various fields.
Different areas of the country are offering benefits such as tax exemptions and assistance in getting patents and permits.
The municipalities of San Carlos, Pococí, Liberia, Grecia and Central de Puntarenas are developing different plans to attract domestic or foreign investors.
“They are offering varied benefits, from tax exemptions when companies invest in development, to less requirements for permits and patents”, reported Nacion.com.
President Oscar Arias signed a law modifying the Free Zone regime in Costa Rica.
The bill was introduced by the Executive on April 2009, and was finally passed on December 17th by the Legislative Assembly.
This law "... intends to attract investment, foster productive chains with local companies and incentive companies to invest outside the Expanded Greater Metropolitan Area, which was specially defined for this law", reported Nacion.com.
The local municipality seeks to attract more international companies, by offering new tax benefits included in the recently modified Free Zone Law.
Turrialba is also betting on more than 11.000 square meters of industrial infrastructure available at its industrial park, and its highways leading to the ports in Limón.
"Currently, the following companies operate in Turrialba under free zone status: Rawlings, who produces sporting uniforms and baseball equipment; Lam Snacks, who sells plantain and yucca snacks, and Firestone Industrial Products, who builds vehicle components since March 2008", reported Nacion.com.
The bill was finally passed by the Costa Rican Legislative Assembly, all that remains is Oscar Arias' signature and its publication in the official government newspaper.
With 44 votes in favor, the law was passed on Thursday 17.
"This bill broadens the existing Free Zone Law, by adding a new category for manufacturing companies. It specifies incentives and clear regulations, but also puts the country in line with a WTO Agreement covering subsidies and compensatory measures", reported El Financiero.
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.
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.
In Costa Rica, multinational companies are worrying for delays in the law that modifies fiscal incentives at free ports.
Two articles in Nacion.com reveal Intel's and Bridgestone's concern for insecurity in investment planning caused by delays in the approval of the law, which is being studied by Congress.
Michael Forrest, general manager at Intel Costa Rica, explained the need to have certainties regarding the fiscal conditions of the new regime for planning long-term investments: "Countries in which we invest must provide confidence, political stability and understanding of the fiscal matter. If there is uncertainty in any of these aspects, doubts arise and we must look elsewhere".