Dec. 16 is deadline to duck corporate tax

Jan. 1 will be the date to begin paying the 2014 corporate tax by owners of several different types of entities. The most common ones are sociedades anónimas and sociedades de responsabilidad limitada, as well as foreign companies that are registered to do business in Costa Rica.

Corporations have 30 days to pay the tax without penalty.

The amount for next year is still unknown because, like many other financial assessments, including some fines, the payment is based on half the salary of a judicial office worker. That is how Ley 7337 specified a financial base so that it is sensitive to inflation. That salary for next year has not been established. Usually the judiciary does that every year sometime in November.

Next year, 2014, will be the third year that the tax is being collected. This year the amount was 189,700 colons (about $380)  for an active corporation and half that for an inactive one.

The Ministerio de Economía, Industria y Comercio issued a reminder Monday that there is a way around the tax. Companies that are registered with the ministry as apequeña y mediana empresa do not have to pay the tax. But the deadline this year to register is Dec. 16, the ministry said.

The tax law, Ley 9024, specifically includes these entities that are known in English as small and medium firms.

This is the legislature’s way of giving small business a break, but not every small corporation is eligible. For example, many expats hold their vehicle or home in a corporation. These would not be eligible because to be free of the tax, the corporation has to be a real business engaged in commerce.

Registering with the ministry gives a firm the edge when seeking contracts with the government. There also are special financing programs for small businesses and a host of ministry services, including a television station. Periodically the ministry runs expos in which registered companies may exhibit.

Some advisers suggest not registering because the firms that do so must reveal the names of their shareholders and make public company data, including income.

The ministry has an entire section on a Web page about the program.

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