Business tax hike begins in April

January 6, 2012

After incessant bickering throughout the year, perhaps the holiday spirit overcame the Legislative Assembly on Dec. 23, the night lawmakers approved a new business tax to help fight crime. The tax measure had been stalled in the assembly since August. 

Beginning in April, national businesses, entrepreneurs and small business owners will be required to pay a $300 annual tax. The measure is expected to generate an additional $70 million annually. Businesses, or sociedades anónimas, have a window from April 1 to April 30 to pay the new tax for 2012. 

“Costa Rica is willing to fight crime to prevent people who have caused severe damage in other countries from coming here,” said President Laura Chinchilla, when she ratified the law on Dec. 27. “If we don’t have a trained police force, yet want to fight the criminal underworld successfully, it is going to be very difficult. It will require organization and investment in training.”

According to the text of the law, all mercantile and trade companies, branches or representatives of foreign companies, and individual limited-liability businesses in the National Registry will be required to pay $300 within the first 30 days of each year after 2012. 

The law says that if a company fails to pay the tax, it will be fined “up to 10 to 15 times the amount” of the tax. If a business fails to pay the tax within 120 days, it will be removed from the National Registry and closed by the Finance Ministry. 

The money collected from the tax will be distributed between the Justice Ministry and the Public Security Ministry. 

“Ninety-five percent of the total collection of this tax will be assigned to the Public Security Ministry to be invested in programs to better citizen security and combat crime,” the law states.

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