There still is time to duck the tax on corporations

Expats who own corporations in Costa Rica have until Dec. 13 to duck the 2013 tax on companies.

The exact amount this year is not known because the tax is supposed to be half of the base salary of a judicial auxiliar administrativo 1. If the judiciary gives raises as of Jan. 1, the corporation tax goes up, too,  Right now the amount for an active corporation is 180,000 colons or about $360.

When the law was written legislators exempted companies that were registered as small or medium enterprises with the Ministerio de Economía, Industria y Comercio. Luis Álvarez, a vice minister, said Wednesday that about 2,000 owners of corporations took advantage of this exemption last year. At the same time the judicial employees got a 14 percent raise that affected the amount of the tax.

The ministry announced Wednesday that it would expedite any applications that are filed before Dec. 13. Under the law, the ministry has to give a response within five working days, so any application filed after Dec. 13 will collide with the Christmas holiday and will not be handled until next year, said the ministry.

The exemption is not for everyone. Expats who own a vehicle or a home via a corporation such as a sociedad anónima or limited partnership are out of luck. In order to take advantage of the exemption the corporation must be engaged in business. However, those who own an inactive corporation as many expats do only have to pay half the tax for an active corporation.

Álvarez noted that the company must meet certain requirements. The company must be up to date with its financial obligations with the Caja Costarricense de Seguros Social. It also must have filed a tax return and have riesgo de trabajo coverage for employees. Of course if there are no employes, the requirements are less.

The ministry had a Web page designed to enroll companies in the program. Applications must be made on line and the requirement documents must be scanned, the Web site says.

The ministry was promoting the registration in an event held with Microsoft Corp. Wednesday. The program  PYME Accede allows small and medium size companies to obtain training for employees, credit and half-priced software from Microsoft. The program also involved the Instituto Nacional de Aprendizaje, which provides the training.

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