In Nicaragua, the tax exemption that benefited the import of products such as canned sardines, prepared soups, toilet soap, rubber gloves, among others, was eliminated.
With this change, the products concerned will be applied the Import Tariff Rate (DAI), which is a tax contained in the Central American Import Tariff and is applied to products from countries outside the Central American region, on the value of them, the taxes have variable rates that can range between 5% and 15%.
Until 2023 renewable energy projects in Nicaragua may opt for the exemption of import duty on machinery and equipment, VAT, income tax and municipal taxes.
The National Assembly approved a reform proposed by the Ortega administration to extend the term of tax benefits for energy generation projects with renewable sources.The law established that the maximum period to opt for exemptions was January 2018, but now they will remain in place until January 2023.
In Nicaragua, the Ortega administration is proposing to extend tax benefits for energy generation projects using renewable sources for another five years.
Continuing with the strategy of promoting energy generated from renewable sources, the government is proposing extending tax incentives for these types of projects, as it did in June 2015.At that time, the benefits were extended until January 2018.
If free zones -with their tax breaks and other privileges- are good for the economy, why isn't the entire country made into a free zone?
EDITORIAL
Why not provide companies founded with Central America capital the same benefits and privileges enjoyed by foreign firms operating under free zone regimes? The job creation and contribution to the economy that can be made by companies in free zones because they enjoy these privileges should be able to come from business founded with Central American capital as well, which in contrast to foreign firms, have to deal with excessive regulations and bureaucracy in the States of Central America.
Producers are complaining about a lack of agility and excessive paperwork in the process to request tax exemptions for the purchase of equipment and farm machinery.
Agricultural producers argue that they can not easily access the exemptions for the purchase of equipment which is established in the recently passed Tax Act. Although it has been stated that within three months the necessary reforms will be made for the exemptions to given on products and not producers, the current requirements are delaying procedures and access to the incentive on the part of the producers.
The agricultural sector is demanding a law that grants tax benefits and allows the use of leasing of machinery and equipment to improve competitiveness.
Instead of buying equipment and financing it with a bank, the agriculture sector is calling for a law to be approved to regulate and encourage the use of leasing, as a way to improve productivity by renting equipment and not borrowing to acquire it.
The asymmetry of investment flows makes the application of the concept of world income inevitably generates more revenue to the states of powerful economies than those of small ones.
In his opinion piece in Elfinancierocr.com, Manrique Blen points to the difficulties that countries with small economies face when they sign double taxation treaties, as, depending on the characteristics of the signed agreements, they can stop receiving tax revenues that they could have received had they not joined the treaty.
Current law prevents the family businesses -most companies in the country- from making training expenses of their family member employees tax-deductible.
Members of family businesses can not take advantage of tax benefits for college expenses, postgraduate or masters degrees if they take these courses or their relatives do, even if they are an employee of the firm.
The reduction to $25,000 on the minimum amount of investment required to enjoy tax exemptions opens up opportunities in a rising tourism sector.
Previously, small and medium enterprises in Nicaragua had to invest a minimum of $50,000 in order to qualify for tax benefits, but from this year the minimum investment has been lowered to $25,000.
This has been made possible thanks to the entry into force in January of the "Concertación Tributaria" tax law (LTC by its initials in Spanish), which also reforms the tax applied to imports of aircraft and vessels, among other things.