By submitting to the Costa Rican Legislative Assembly a new text of the dual global income bill, the Alvarado administration intends to guarantee the tax exemptions that companies operating in the free trade zone regime already benefit from.
The dual global income bill that was sent last January 22 to the Assembly created confusion among the deputies.
As of January 1, 2021, owners of homes whose construction value exceeds the equivalent of $217,000 will have to pay the tax known as the "luxury home" tax.
The modification of the minimum amount was communicated through the executive decree that was published on December 22 in the newspaper La Gaceta.
The Legislative Assembly is preparing to consider, in the first debate, a bill aimed at exempting inactive companies from the obligation to file an income tax return.
The file of this legislative proposal is number 22,307 and was presented by Deputy Pablo Heriberto Abarca. The initiative will be discussed in the Assembly, despite the opposition of the Ministry of Finance.
For the first time, the country's Courts of Justice sentenced six people to 10 years in prison for tax fraud against the Public Treasury, a sentence that corresponds to the case of a clothing importing company that defrauded over $575,000.
Carlos Vargas, general director of Taxation, indicated that during 16 years the taxpayer who was condemned used all the procedural guarantees until the last instance. This implied the follow-up of the case by the different actors of the State: General Attorney's Office, Courts of Justice, Public Ministry and the Ministry of Finance.
In this scenario of economic crisis, falling tax revenues and the need to finance recovery programs, in Guatemala and Costa Rica it is already proposed to increase current taxes and create new ones.
Guatemalan authorities are already beginning to discuss the fiscal policy they will apply in 2021, when the economy will have to face the effects of the economic crisis generated by the covid-19 outbreak.
In order to access the $1.75 billion credit requested from the IMF, the Costa Rican government proposes to tax financial transactions, increase the tax on the profits of companies and individuals, and increase the tax on real estate.
On the afternoon of September 17, and in the context of a severe economic crisis that had been going on since before the beginning of the pandemic, the Alvarado administration presented the plan with which it intends to mitigate the fiscal impact of the Covid-19 crisis, a proposal to negotiate an agreement with the International Monetary Fund (IMF) to obtain a credit of $1.75 billion.
In Costa Rica, the Alvarado administration would be considering the creation of a tax on each transaction that a person or company makes through a financial entity, a tax that will discourage savings and motivate people to use cash.
In order to discuss a medium and long term credit with the International Monetary Fund, the Costa Rican authorities would be planning to design and create a new tax, which consists of each person paying a tax of ¢3 for every ¢1.000 in the transactions they make through a bank, finance company, mutual fund, stock exchange or any other financial entity.
In order to tax the total amount of profits of individuals or corporations based in Costa Rica, regardless of where their profits are generated, a bill was submitted to the Assembly that seeks to amend the Income Tax Law.
Currently in Costa Rica a territorial income system is applied, which consists of taxing profits produced exclusively at the local level.
In order to update the Intergovernmental Agreement for the Effectiveness of the Tax Compliance Law on Foreign Accounts, signed by both parties in 2013, the governments of both countries signed a complementary agreement to FATCA.
According to the Ministry of Finance of Costa Rica, with the subscription of the complementary agreement, the legal basis of the FATCA (Foreign Account Tax Compliance Act) will be updated with the provisions of the Agreement with the Government of the United States of America for the exchange of information on tax matters, which will enter into force next September.
Despite a severe economic crisis, Costa Rican authorities have approved the imposition of a 1% VAT on several foodstuffs in the basic food basket, and 4% on certain tourist activities and construction services.
Before the emergence of the pandemic, the Costa Rican economy was already in a difficult state, and the impact of the covid-19 outbreak ended up hitting it in the worst way, which is evident in the performance of productive activity.
Companies that owe taxes to the Costa Rica Tourism Institute will be granted a moratorium during April, May, June and July.
Regarding the taxes to which the moratorium will apply, the Costa Rican Tourism Institute (ICT) reported they are 5% for the sale of each air ticket originating in Costa Rica for international travel, in addition to the 5% that applies to the purchase of tickets whose destination is our country. Also included is the $15 fee for the entry of each tourist by air.
A three-month moratorium on the payment of value added taxes, business income and customs duties is the proposal of the Executive in view of the emergency caused by the spread of covid-19 in the country.
The initiative "COVID-19 Tax Relief Project", which was presented to the Legislative Assembly on March 16, proposes that taxpayers can postpone the payment of taxes for at least three months. During this period no fines or interest will be applied to those who take advantage of this moratorium.
The Legislative Assembly approved in second debate a bill that aims to tax in the country the sale and self-consumption of imported or locally produced cement.
The initiative, which was approved in the first debate in the Assembly in mid-February and is still pending approval by the Executive Branch, establishes that the tax will be on imported cement produced nationally, in bags or in bulk, for sale or self-consumption, of any kind, whose destination is the consumption and marketing of the product nationally.
Local authorities announced that as of March 7, cargo vehicles traveling through the country from Costa Rica will no longer pay $50 at Nicaraguan customs.
The Assembly approved in first debate a bill that seeks to tax the sale and self-consumption of cement that is imported or locally produced.
The initiative establishes that the tax will be on cement imported and produced nationally, in bags or in bulk, for sale or self-consumption, of any kind, whose destination is the consumption and marketing of the product at the national level, reported the Legislative Assembly.
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