Yesterday, by means of a voting of 40 versus 10 in the first debate, a law was approved which contains a tax for commercial corporations and companies registered in the country. The tax had been declared unconstitutional by court in January 2015, due to shortcomings of previous legislature.

As soon as the new law and inherent charge comes into formal and binding effect, for which it will need to pass the second round of voting, all corporations and companies in the country will be subject to this new tax. The charge that will need to be paid will vary and depend on whether or not the companies are registered as contributors to income tax and will be calculated according to the amount of income obtained in the last fiscal period. That being, the amounts to be paid will be the following:

  • Inactive corporations (not registered as Costa Rican tax contributors in front of the authorities) ₡64.000 annually
  • Active corporations with profits under ₡51,000,000: ₡106,000 annually
  • Active corporations with profits between 51,000,000 and 119,000,000: pay ₡127,000 annually
  • Active corporations with incomes superior to ₡119,000,000: ₡212,000 annually.

The initiative of the law establishes that those affected by the tax will include mercantile corporations (anonymous/stock corporations and those companies of limited liability), as well as all subsidiaries or affiliates of foreign corporations registered in the Registry of Judicial Entities during the month of January.

That said, the payment of the first tax installment, which must be carried out once the law comes into effect, proportionally corresponds to the number of days which have passed that year, being that the amount must be paid in full by January 2018.

Of the money raised by the tax, the great majority 95% will be allocated to the ministry of public security, with the purpose of conducting new recruitments of police and increase endowments of equipment to officers. The remaining 5% will be used by the ministry of justice for jail and prison infrastructure improvements.

Some of the disputants have already manifested their opposition to this new tax and notified of their intention to present a complaint concerning the project, before the constitutional chamber.

At Lexincorp Central American Law firm, we will be alert concerning all developments of this law, in order to inform our clients the very moment in which the proposed law is converted into Costa Rican legislature, which would effectively validate the tax.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.