Sala IV rejects yet another appeal of corporate tax

Another challenge to the tax on corporations has been rejected by the Sala IV constitutional court.

The appeal was technical in that it questioned the way in which the tax money was being collected.  It cited sections 185 and 186 of the Costa Rican Constitution that says the national treasury is the  only agency empowered to receive revenue.

The law, which was published at the end of 2011 says that the tax money collected would go to the Ministerio de Gobernación, Policía y Seguridad Pública for programs to fight crime and ensure citizen security.

Just 5 percent of the money collected goes to the Registro Nacional for administering the tax program.

The court did not explain why it rejected the appeal but previous appeals against the tax have met with a similar fate.

This is the law that this year provides for a 190,000 tax on active corporations. That’s about $385. The tax will keep getting bigger because it is indexed to a judicial salary.

A summary of the court’s decision was released by the Poder Judicial, but the summary did not include any of the written decision.

The tax, which is in its second year, took many expats by surprise because many have cars and homes in personal corporations. There has been a wave of legal efforts to eliminate corporations to avoid the tax.

This is permitted by the law but costs lawyers fees.

Corporations that have not paid the tax will be eliminated by the Registro in three years.

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